The electric automaker Rivian plans to add a second shift at its Normal manufacturing plant by the end of next month, creating a need for even more hiring, the company said Thursday.
In a quarterly financial update, founder and CEO RJ Scaringe said Rivian’s supply chain — despite its constraints — can support the second shift.
“It’s not a binary step. There’s a process of ramping the second shift, much like we did with the first shift. But in terms of equipment readiness — robotics and automation controls — those items have of course already been worked out. So we expect the bringing on and ramp-up of the second shift to be very rapid, and we’ve begun hiring for that,” Scaringe said.
The Rivian plant already has around 6,000 employees, making it McLean County's second-largest employer. Adding a second shift essentially increases the hours each day when vehicles are being produced – a key step if the plant is to ever reach its 150,000-vehicle annual capacity. (Rivian is only aiming for 25,000 this year.)
Rivian said last month that another 1,500 hires in Normal were expected by the end of 2022.
Thursday’s update is further confirmation that Normal was largely spared in Rivian’s recent 6% workforce cost-cutting. Rivian says about 50 non-manufacturing positions in Normal will be cut. Most Rivian employees work elsewhere, such as California, Michigan, Arizona and overseas.
Climate bill's impact
Meanwhile, Scaringe said the federal climate bill – known as the Inflation Reduction Act – could create more demand for its commercial (or fleet) vehicles. Amazon was Rivian’s first commercial customer, placing an order for 100,000 delivery vans that recently began hitting the roads. But Rivian hopes to sell fleet vehicles to other buyers too.
The climate bill would create new tax credits for medium- and heavy-duty EVs. Scaringe said that would apparently apply to the largest, heaviest electric van that Rivian plans to make (the EDV 900), with “quite strong” incentives at $40,000.
“We see this as really helping drive a rapid transition to electric vehicles in the commercial space,” Scaringe said.
The climate bill’s impact on other part of Rivian’s business – consumer vehicles – is further down the road.
The bill would provide up to $7,500 in tax credits for a new EV purchase. But most of Rivian’s R1S (SUV) and R1T (pickup truck) configurations won’t meet the bill’s price limit of $80,000, Scaringe said. (Rivian is giving its current pre-order customers the chance to lock in a “written binding contract” now that would apparently qualify them for the credit before the new law kicks in.)
Rivian’s R2 vehicle line is expected to qualify for the credits, Scaringe said. R2 vehicles, which will be made at Rivian’s new plant in Georgia starting in 2025, will be a “more accessibly priced” (lower price point) “mid-sized SUV targeting global markets,” the company said previously.
“Our R2 product line and associated cell roadmap are being developed to allow our customers to capture the value of these incentives,” Scaringe said.
Rivian unsuccessfully lobbied for changes to the climate bill. Despite that, Scaringe praised its passage through the Senate. It's awaiting a final vote in the House.
“We’re incredibly happy to see policy that helps more rapid adoption of electric vehicles, as well as the important investments in building domestic battery-cell production,” he said Thursday. “For the world to quickly shift toward a carbon-free economy, this type of legislation creates the needed tailwinds for both consumers and industry. The commercial segment, in particular, will benefit from the strong incentives for fleet operators to electrify. And (Rivian's commercial vehicle) platform has been developed for a wide range of applications.”
Rivian began production in Normal in September 2022. It’s off to a slower-than-expected start, in part due to global supply-chain problems that have disrupted many automakers.
Rivian currently has a R1T and R1S preorder backlog of around 98,000 vehicles. The company said its “average daily preorder rate accelerated in the second quarter (April, May and June 2022) compared to the first quarter of 2022.”
The company lost $1.7 billion in the quarter ending June 30. Rivian doesn’t expect to be profitable in the near-term, and that’s not uncommon in the EV world. It took 18 years for Tesla to turn a full-year profit, which it finally did in 2020. That year it made 500,000 vehicles.
