Electric vehicle manufacturer Rivian's investment in a proposed Texas manufacturing plant is already proving to be a win-win proposition for the Amazon, Inc. AMZN-backed company.
What Happened: The Fort Worth city administration has agreed to award a $440-million tax incentive package to Rivian, as the EV maker is reportedly planning to build a $5-billion manufacturing plant near the city.
The development, codenamed "Project Terra," is expected to create 7,500 jobs by 2027, potentially making Rivian one of the largest employers in the Dallas-Fort Worth region.
The proposed plant would have an annual production capacity of 200,000 vehicles per year and the minimum average annual salaries of factory workers would be around $56,000.
The city council unanimously approved the $440-million tax break, which is about 85% of projected maintenance and operations property taxes over 15 years.
Related Link: How to Buy Rivian IPO Stock
Why It's Important: California-based Rivian now has a factory in Normal, Illinois. The company is developing the R1T, an EV truck that would compete with Tesla, Inc. TSLA's Cybertruck and Lordstown Motors Corp. RIDE's Endurance.
Its product portfolio also includes the R1S, an electric SUV under development.
Startups such as Rivian operate in a cash-constrained environment given the huge capital needs associated with the production process. Tax breaks such as these will free up cash resources for Rivian.
Related Link: Tesla Rival Rivian Selects Underwriters For IPO, Could Seek $70B Valuation
Photo: the Rivian R1T concept.
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