Rivian Automotive Inc., the electric-vehicle startup backed by Amazon.com Inc., is in talks to invest at least $5 billion to build a factory near Fort Worth, Texas, according to a document obtained by Bloomberg News.
The factory — codenamed “Project Tera” according to the document — would be able to produce 200,000 vehicles a year and would create at least 7,500 jobs by 2027. The presentation, made by the City of Fort Worth’s Economic Development Department to the City Council and dated Aug. 10, also proposes a number of incentives including grants and city tax abatement of as much as $440 million.
The proposed welcome basket shows the extent to which economic development officials are eager to court companies in the fast-growing electric-vehicle market — even those like Rivian that have yet to produce a single vehicle for sale. The Irvine, California-based automaker is among the most promising of a large pool of EV startups trying to catch up with Tesla Inc., which is also building a factory in Texas.
The city also proposes to nominate Rivian’s plans for the Texas Enterprise Zone Project, making it eligible for further state tax incentives, as well as seek other incentives from Tarrant County. The $5 billion capital investment commitment from Rivian includes a minimum $2 billion in real property improvements and $1.6 billion in hard construction costs, the document shows. The company has committed to completing its initial investments by the end of 2024.
While a number of states and cities are still under consideration, the Texas site has become the front-runner for Rivian, according to people familiar with the matter. Rivian, and in particular Chief Executive Officer R.J. Scaringe, had previously been keen on a location in Arizona but concerns were raised around the available infrastructure, the people said, asking not to be identified discussing private information.
No final decision has been made and it could be some weeks before a deal is agreed with one of the cities or states, the people said.
“Rivian is in discussions with multiple locations as part of a competitive process for siting a second manufacturing facility,” Jim Chen, the automaker’s vice president of public policy, said in an emailed statement Wednesday. “This may include Rivian being involved in certain public-facing processes at potential locations. Involvement in these processes does not indicate a final decision.”
Robert Sturns, the director of economic development for Fort Worth, said in an email that the city is “very excited to be a finalist for this project and looks forward to continuing the process.”
Sturns told members of the city council during a presentation Tuesday that several states were still under consideration. Fort Worth believes it offers a number of competitive advantages, including strong access to talent and the “ability to stand up production fast,” it said in the document.Play Video
Texas, with its growing tech economy, access to ports and proximity to suppliers in Mexico has led some to call it the Detroit of the south. Toyota Motor Corp.’s North American headquarters are in Plano, and Elon Musk’s Tesla is building a new vehicle factory in Austin that’s slated to be completed later this year.
Rivian has caught attention with its planned battery-electric pickup and SUV and a deal to build 100,000 electric delivery vans for Amazon by the end of the decade. It has raised more than $10.5 billion from investors including Ford Motor Co. and T. Rowe Price. The company already operates a factory in Normal, Illinois, but recently delayed the start of production on its debut EV due to supply-chain disruptions.
The proposed 2,000-acre Walsh Ranch site in Texas is located 12 miles southwest of downtown Fort Worth. Upon completion, the plant would include 12 million square feet of vertical construction. Rivian will ensure minimum average annual salaries of $56,000, according to the document.(Adds with comment from Rivian in seventh paragraph. An earlier version of this story corrected the spelling of Fort Worth in second paragraph.)
–With assistance from Dana Hull.
© 2021 Bloomberg L.P.