Amazon.com Inc AMZN and Ford Motor Co F-backed electric vehicle maker Rivian is in advanced talks to invest at least $5 billion to build an electric vehicle factory near Fort Worth, Texas, Bloomberg reported on Wednesday.
What Happened: The plant, codenamed “Project Terra”, will have an annual capacity of 200,000 electric vehicles and is expected to create at least 7,500 jobs by 2027. Rivian is reportedly being offered a number of incentives including grants and county tax abatement of up to $440 million.
Rivian plans to complete the initial investments, which will see infusion of $2 billion in real property improvements and $1.6 billion in hard construction costs by the end of 2024.
The report, citing Robert Sturns — the director of economic development for Fort Worth — noted the city is a finalist for this project, though a final decision is still pending and could take weeks before a deal is agreed.
Why Texas? Texas is being seen as the Detroit of the South thanks to its access to ports and proximity to suppliers in Mexico and the growing tech economy, Bloomberg noted. Tesla Inc TSLA is currently building an electric vehicle factory in Austin with a target to begin production by the end of the year.
Rivian CEO R.J. Scaringe was rtedly eporkeen to have a plant in Arizona but concerns were raised around the available infrastructure. The electric automaker currently has a manufacturing facility in Normal, Illinois and a second plant will help the EV startup expand capacity and compete with Elon Musk-led Tesla, which already has relatively larger scale and is further expanding.
Rivian recently secured a fresh $2.5 billion funding from exisiting investors such as Amazon, Ford and T. Rowe Price. The electric vehicle start-up said it has raised about $10.5 billion since 2019.
The California-based startup is valued at $27.6 billion and is reportedly planning to get a U.S. listing in September. The IPO timing is not certain and the listing could occur in late 2021 or even 2022, as per a Bloomberg report.
Price Action: Amazon shares closed 0.63% lower at $3,320.68 on Tuesday.
Click here to check out Benzinga's EV Hub for the latest electric vehicles news.
See also: How to Buy Ford Stock
Photo: Courtesy of Rivian
© 2022 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.