One of the more high-profile electric vehicle (EV) stocks on the scene, pickup and SUV manufacturer Rivian Automotive (RIVN 3.59%), had a fine Thursday on the stock exchange. Investors traded the company’s shares up by almost 4% on news that it had secured billions of dollars in financing from a very reliable source. That rise was in contrast to the slump of the S&P 500 (^GSPC -0.21%) across the trading session; it dipped by 0.2%.
The most secure lender possible
Rivian divulged in a press release that it has closed a loan agreement with a division of the U.S. Department of Energy (DoE). The EV maker will be able to borrow up to $6.6 billion to help fund the construction of a factory near the city of Social Circle, Georgia. The company will produce its R2 SUV and R3 crossover (essentially a combination of sedan and SUV) at the facility.
With the borrowed funds, Rivian said, construction of the factory should begin in 2026. The first vehicles produced there should roll out in 2028. The company estimates that this project will create 7,500 jobs.
Success with auto manufacturing depends to no small extent on the number of units a manufacturer can produce. In the press release, Rivian fittingly quoted its founder and CEO R.J. Scaringe as saying that “this additional capacity for our mass-market products is key to U.S. leadership in the electric vehicle industry.”
A notable victory
It’s something of a stretch to describe Rivian as a “leader;” that tag almost indisputably belongs to pace-setting EV powerhouse Tesla. But there’s nothing wrong with a bit of marketing hype. Meanwhile, obtaining several billions of dollars in financing from a rock-solid lender is clearly a win for the company.
Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tesla. The Motley Fool has a disclosure policy.
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