Rivian later announced plans to build its R2 crossover, a lower-priced vehicle targeting mainstream consumers, at the Georgia plant. Production of the R2 is slated for 2026.
Inflation, supply chain issues and fears of an economic slowdown have weighed on all automakers, but upstart EV companies in particular.
Rivian said Monday that it plans to sell convertible notes, which can be paid back to investors with cash, stock or a mix of both. Investors who purchase the notes will also have the option to buy an addition $200 million in bonds if they choose.
“The capital from this offering will strengthen our balance sheet to facilitate the launch of R2,” a Rivian spokesperson told The Atlanta Journal-Constitution.
Rivian ended 2022 with $12.1 billion in cash reserves, but that number is down from $18.4 billion at the beginning of 2022. The company also initiated two rounds of layoffs since last summer.
Rivian CEO R.J. Scaringe told the AJC last week that the company’s long-term success is staked on its planned Georgia factory.
“We’re committed to this state and this project,” he said. “The future of our company in terms of scaling and growing really relies on the future of this project. There’s not another option. We’re not planning an alternative. This must work.”
Grading work is currently taking place on the 2,000-acre site in southern Morgan and Walton counties. Cox Enterprises, owner of the AJC, owns about a 4% stake in Rivian.
A legal challenge from residents near the proposed factory prompted a local judge to strike down some $700 million in property tax cuts — nearly half of the $1.5 billion incentive package state and local leaders used to woo Rivian to Georgia. The ruling has been appealed.
But Rivian will have the option to terminate its agreement with the state in May if the lawsuit isn’t concluded in the state’s favor.
The bonds Rivian announced this week, which will mature in March 2029.
During a February call with investors, Rivian officials did not disclose the number of preordered vehicles on backlog, sparking criticism from analysts. Rivian had said Nov. 7 that it had 114,000 vehicles on order in addition to 100,000 vans it is providing Amazon.