The automaker's new planned factory has suffered a setback.
Rivian has been dealt a nasty blow after a Georgia judge rejected a proposal that would grant the automaker substantial property tax breaks, reports the Associated Press. Superior Court Judge Brenda Trammell declined to validate a bond request brought forward by the local government.
The ruling notes the development authority had not proved the automaker's planned production plant was "sound, reasonable and feasible," as required by Georgia state law. The all-electric brand has plans to build a new facility in the Peach State, with the $5 billion project expected to create 7,500 jobs by 2028.
In return for selecting Georgia, Rivian expects to receive $1.5 billion in funding and tax credits.
Additionally, Trammell ruled that, as per state law, Rivian should pay property taxes due to the control it will have over the property it will lease from the development authority. Trammell deduced that this undermines the reason behind the legal action brought to the court.
The joint development authority and Georgia's Department of Economic Development told AP they were "disappointed and respectfully disagree" with Judge Trammell's verdict but won't consider abandoning their proposed plans. The duo is also thinking of appealing the decision.
"We remain undeterred in our efforts to bring high-paying, American manufacturing jobs to Georgia and are currently assessing all legal options," they added.
Rivian is yet to comment on the matter.
Not everyone is disappointed with the outcome; the president of Morgan Land, Sky & Water Preservation, JoEllen Artz, is an opponent of the project. "It is very fulfilling that we local citizens were able to band together to do so much research in order to bring a great legal team on board and deliver us fantastic results like these," said Artz.
But it's not just environmental reasoning that swayed Judge Trammell. The Georgia Superior Court Judge also questioned whether Rivian had enough capital to see the project through. "Rivian's cash reserves are quickly drying up, thus casting serious doubt on whether it will be able to commence, let alone complete, the project."
The property tax exemption was part of the incentives package; the local government owns the property and leases it to Rivian, which, in turn, doesn't have to pay $700 million in taxes. The company agreed to make payments totaling $300 million instead.
The proposed facility, situated around 45 miles outside of Atlanta, was poised to build up to 400,000 vehicles per annum. Rivian is hoping to commence development of its Georgia factory by 2024, and it will likely use the facility to produce the existing R1T pickup truck, the R1S SUV, and an upcoming third model. At present, Rivian only has one plant in Normal, Illinois.
Not much is known about the next Rivian vehicle, save for the fact that it will be based on a new platform called R2. Whatever it may be, we hope the automaker manages to kick production into high gear and deliver vehicles on time.