Elon Musk in Rivian: get your factory running before expanding to a second factory

Elon Musk commented on Rivian’s efforts to build a second electric vehicle plant in the United States. Tesla CEO wisely suggested that they run their first factory first.

Rivian confirmed last month that it was looking for a location for a second electric vehicle plant in the United States. It would add to the automaker’s current plant in Normal, Illinois.

However, Rivian recently delayed the start of production of its R1T electric pickup truck at the plant.

This has led some people to believe that Rivian may have spread himself too thin by already seeking to build a second factory before increasing production at the current factory.

Musk has now added his voice to that sentiment by recommending that Rivian run his first factory:

I would recommend that they run their first factory. It is incredibly difficult to achieve volume production at an affordable unit cost.

He made this comment after Reuters revealed that Rivian had submitted plans for the new plant to be located in Fort Worth, Texas:

The plant, described in the document as “Project Tera,” would create at least 7,500 jobs by 2027 and produce around 200,000 vehicles per year. The plant would be located on a 2,000-acre site west of Fort Worth, the city’s economic development department showed.

Rivian confirmed he was behind the Tera project, but added that there were still other locations vying for the new plant.

As is often the case with such projects, the company keeps its options open while it negotiates incentive packages. Fort Worth is said to be ready to offer Rivian $ 440 million.

The automaker is said to have planned to invest up to $ 5 billion in the project.

Taking Electek

While EV startups often want to differentiate themselves from Tesla, they can’t say that the automaker is not a good example to follow if you want to build a successful EV business.

They can learn from both their successes and their failures.

In this case, Musk is probably right, but there are a few nuances to the situation.

Rivian wants to make sure he can deploy profitable EV production on a large scale before he wants to replicate it at other sites. Otherwise, it will make the same inevitable mistakes.

However, the company is only looking to strike a deal at this time.

By the time it starts rolling out any new production capacity to a new factory, they are probably hoping to already be deep into ramping up production in Normal next year.

While the delays have been daunting, Rivian still appears to be in an excellent position to deliver the R1T electric pickup by the end of the year.

I am still cautiously bullish on Rivian. I wouldn’t mind if they strike a deal for a second factory as long as the focus is still on increasing Normal mode production and delivering the vehicles they promised customers years ago. at this stage.

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