American electric vehicle startup Rivian announced Thursday the $827 million incentive package for its planned Normal factory expansion in Illinois.
The expansion initiative will support the upcoming production of the new Rivian R2 electric midsize SUV in Illinois.
Rivian benefits from Illinois state funding for factory expansion
According to the press release, Rivian secured $827 million in an incentive package from the State of Illinois Department of Commerce & Economic Opportunity.
The funds from the incentive will aid Rivian’s proposed expansion of its existing production plant in Normal to accommodate the impending production of the R2.
Rivian also plans to use the incentive package to improve public infrastructure and implement job training programs for its workforce.
“We are grateful for this investment from the State of Illinois and for the leadership of Governor Pritzker, President Harmon, and Speaker Welch. The support from the state will allow us to quickly bring our midsize SUV, R2, to market and provide even greater consumer choice for EVs…”
Rivian Founder/CEO RJ Scaringe
Upcoming R2 production in Illinois
The existing Normal factory currently produces electric delivery vans, which Rivian supplies to Amazon. It also houses the production of the R1S electric SUV and the R1T electric pickup.
It has an annual production capacity of 150,000 units before the expansion.
In March, Rivian declared plans to bring the production of the new R2 midsize electric SUV to the Normal factory in Illinois.
The addition of the R2 will raise the annual capacity to 215,000 electric vehicles, according to Rivian’s estimates.
“Illinois is positioned to be a powerhouse in this market for years to come, bringing quality jobs and revitalizing communities across the state. I want to thank our partners at Rivian, who have doubled down on their investment in Illinois. Together, we’re taking a tremendous step forward – for our electric vehicle ecosystem, for our economy, and for our state. Each and every dollar invested in this market is a win for the working people of Illinois and brings us a step closer to meeting our ambitious climate goals.”
Governor JB Pritzker
Plan changes
In hindsight, Rivian initially planned to produce the R2 in its new factory in Georgia. However, it decided to ditch the original plan to speed up the timeline of the R2 production.
The pivot also enabled the American electric automaker to save $2.25 billion in the short term as it now leverages an already existing factory instead of building a new one.
Rivian’s shares surged 10% in afternoon trade after losing over 60% in valuation this year as of Wednesday’s close, Reuters reported.
Excitingly, Rivian aims to officially release the new R2 model in the first half of 2026. The highly anticipated midsize electric SUV may enable Rivian to achieve financial sustainability if it succeeds in accelerating production and getting customers on board. The price is expected to start at $45,000, making the R2 the most affordable and high-volume model of the brand yet.
