Michigan-Based EV Startup Rivian Automotive Purchases Enormous Former Mitsubishi Factory

8 months ago by Steven Loveday 73

New home of Rivian Automotive; Formerly Mitsubishi Motors North America, Normal, IL - Image Credit: <a href="http://www.mmsonline.com/blog/post/manufacturing-news-of-note(2)">MMS</a>

New home of Rivian Automotive; Formerly Mitsubishi Motors North America, Normal, IL – Image Credit: MMS

Rivian Automotive essentially appeared from nowhere, and now as Teslarati reminds, the company has bought a massive car factory. This is huge news for EV enthusiasts.

To put it into perspective, the former Mitsubishi Factory in Normal, IL is more than half the size of the current Tesla Gigafactory, and is located on a substantial piece of property that is over 60 percent of the size of the Gigafactory’s land.

Normal’s mayor, Chris Koos told Teslarati:

“As a community, we are thrilled that Rivian has chosen us. It is incredibly rare that a major manufacturing facility in Midwest shutters and then finds new life.”

City manager, Mark Peterson added:

“We had all but given up hope on a buyer for the Mitsubishi Plant.”

The city was so elated about the prospect of a buyer, that an incentive package was offered to Rivian. It includes a five-year tax abatement and a $1 million grant. Rivian Automotive has promised to hire about 1,000 employees and invest $175 million into the site by 2024, in order to retain the incentives. For now, Rivian will invest $40.5 million throughout the next five years, with an initial production goal set for 2019.

Inside the Rivian Automotive Production Facility

Inside the Rivian Automotive Production Facility

The Michigan-based electric vehicle startup has been working since 2009 (not long after Tesla released the Roadster), originally based in Florida under the names Mainstream Motors and Avera Automotive. In 2011, the name Rivian Automotive was chosen, and in 2015 the startup relocated to the Motor City (Detroit). Rivian Automotive also has a San Francisco location. Like Tesla, Rivian’s CEO, RJ Scaringe, is a high-caliber engineer and a visionary. He actually has a PhD in Mechanical Engineering. Scaringe shared:

“To create a vehicle portfolio and ecosystem to accelerate the shift to sustainable mobility, we have to bring together very different and unique sets of personalities, skill sets and backgrounds. Our team includes fine artists, comedians, cultural anthropologists and world-class athletes — and we’ve developed an organizational culture that allows these individuals to thrive.”

Let’s consider a few important points here. The company has been hard at work for about seven years. You would think that, by now, if this wasn’t going to come to fruition, Rivian would have long since given up. The company is also purchasing a mammoth factory which includes manufacturing and office space, stamping machines, injection molding equipment, tools, robots, CNC machine tools, welders, cranes, etc. The property also includes farmland, testing areas, a test track, and individual properties with buildings.

It seems like this is a substantially aggressive move, that shows much promise. Hypothetically, if Rivian has done its homework – and it seems that they have – they could walk in the door and build vehicles here nearly immediately. Many startups are talking about building electric or autonomous cars. However, how many have acquired a production-ready automotive plant? It’s not something that you do just in case everything works out.

The Rivian Automotive website provides background information and a myriad of quotes and vision statements from the company

The Rivian Automotive website provides background information and a myriad of quotes and vision statements from the company

Having an electric car startup, outside of the Silicon Valley area, and Detroit/Midwest-based, and 100 percent American, is a pretty big deal. With this acquisition, Rivian is way ahead of the game, when compared to all of the companies that are using or sharing small spaces out west, or are just trying to successfully build a new factory.

Faraday Future is struggling to maintain construction in the Las Vegas area. While Faraday unveiled a working prototype, the company has nowhere to mass-produce it. Many other emerging startups are in the same boat. While Rivian hasn’t shown a prototype, they now have a space and the necessary equipment to quickly move forward, and obviously Rivian has spent seven years working on something. Perhaps keeping the plan a secret was in Rivian’s best interest. Had the company revealed its work years ago, and then didn’t bring something to production, it would have been riddled with doubt and skepticism.

Rivian’s website keeps the specifics a secret, but provides background information and a myriad of quotes and vision statements from the company concerning its new concepts and ideas. The company hopes to change the face of transportation as we know it, but also make our cars more meaningful and integrated into our lives:

“Rivian is developing a flexible electric platform that will underpin our launch portfolio. Our vehicles are being optimized around the electric architecture to deliver outstanding performance, efficiency, packaging, durability and safety.”

Check out Rivian’s website below and let’s keep our fingers crossed that Rivian Automotive finds a place in the electric car race.

Source: RivianTeslarati

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73 responses to "Michigan-Based EV Startup Rivian Automotive Purchases Enormous Former Mitsubishi Factory"

  1. Someone out there says:

    I wish them good luck! There is still plenty of market to grab in the EV space. For example all electric pickup trucks or vans are up for grabs.

    1. jimijonjack&jill says:

      I hope they stick to “SIMPLICITY” Or the opposite of what Tesla is doing with Some KEY Safety Options & Long Range Batteries Because there are Many people out here that still want to drive their Own Cars..

      1. Joshua Burstyn says:

        You can’t drive a Tesla on your own? Just because the safety features are there doesn’t mean you can’t drive your car the old-fashioned way…

      2. floydboy says:

        Guess what, they STILL CAN!

        1. JIMJFOX says:

          Yes- and you’re paying for something you don’t want. That’s the point.

          1. floydboy says:

            No, you’re not! Don’t want to pay to turn it on, then don’t!

            1. pjwood1 says:

              Where do I turn on all the normal things that keep my eyes on the road?

      3. Ocean Railroader says:

        I really think Tesla making things over complex could be their biggest flaw that could be used to bring them down.

        A example is if there are two EV’s a 300 mile range EV from Tesla that is like a driving smart phone for $46,000

        And a 350 mile range EV from a car company were the Car is a simple turn key start car and drive for $27,000.

        The simpler car in theory could sell a lot more then Tesla.

        1. Anon says:

          No. Biggest single cost in an BEV is the “B”attery.

          No one else has lowest cost, highest energy density over Tesla, ATM or near future.

          1. ClarksonCote says:

            “No one else has lowest cost, highest energy density over Tesla, ATM or near future.”

            That’s a bold claim. Please cite sources, and include thermal management of assembled pack.

        2. jelloslug says:

          The money in a Tesla is not in the cameras or the AP software.

    2. BretJ says:

      VIA Motors…electric vans and trucks

      1. Someone out there says:

        But where are they?

        1. Neromanceres says:

          They are currently building and delivering them. Fleet orders are keeping them busy and using up their capacity.

          1. Pushmi-Pullyu says:

            That sounds much, much more optimistic about Via Motors than other comments I’ve read. Others suggest that Via is a walking corpse, and that their sales haven’t been sufficient to justify keeping the business going.

            Via Motors’ Wikipedia article has not been updated since 2012. Not a good sign!

    3. SJC says:

      The van idea is good, bring back the days of the VW van with EV flair.

  2. zzzzzzzzzz says:

    I may hope they will come with something unique and great, and succeed. But really, how many copy-cat Tesla startups the market can bear?
    “Our team includes fine artists, comedians, cultural anthropologists and world-class athletes” – yes, comedians is a must for these kind of startups 😉 They should be promoted to CEO position for full blown performance in front of shareholders, this works really well 😉

    1. Alonso Perez says:

      Copycat? We haven’t seen their car yet. Let’s hold off on calling them a copy cat till they do, OK?

    2. Pushmi-Pullyu says:

      If zzzzzzzzzz is already bashing this company, that’s a good sign. It means he sees Rivan as another threat to his Big Oil masters!

      🙂 🙂 🙂

      1. zzzzzzzzzz says:

        Pu-pu, how many battery worshiper cults do you need? I’m not jealous, you may join few of them at the same time, but would look silly.

        You typically trash everything that has no Tesla/Musk badge, did your faith into holly Elon shattered and you are secretly planning jumping the ship?

  3. mhpr262 says:

    A team of comedians, anthropologists and athletes … Oooookayyyy …..

    1. Yogurt says:

      Listing that under their culture is comical as I grosly prefer the culture of engineering companies to be real engineers…
      But America is the home of the careful and the land of the politicaly correct…

      1. Joshua Burstyn says:

        Everyone has hobbies. Just because the team doesn’t take themselves as seriously as some others doesn’t mean they are incapable. Maybe they just have a great company culture.

    2. JIMJFOX says:

      Ballerinas- they NEED ballerinas!!

  4. Alan says:

    Apple i-car ?

    1. Jake Brake says:

      That would actually make sense. Ive never heard of Rivan and im OCD on the EV landscape.

  5. Spin says:

    I was wondering how long that plant has been closed? If anyone knows…..

    1. ffbj says:

      …mm, since Mitsubishi stopped making cars there, would be my guess.

    2. Alonso Perez says:

      The last car rolled off the assembly line on November 30, 2015. The plant was running at a rate of some 70,000 cars a year. It had a peak production rate of 220,000 cars.

      Given the history of the plant, investments made till fairly late (thanks to state incentives attempting to keep it open), it is likely to be in pretty good shape, comparable to NUMI. It is not a facility abandoned 10 or 20 years ago.

      Obviously it will take money to restart it. Lighter equipment may have been removed. Still, it looks like a pretty good find.

      1. Would this have been a good find for Tesla, or too far from home base in Freemont, CA?

        In might have been good from the point of them proving more jobs in the Mid-West or Eastern part of the States, and given them more leverage for pitching the jobs they provide, to Trump, but it also would have needed more back and forth travel of Elon and Senior Management, getting it set up!

        I also know thete are lots of shuttered car dealerships in the USA, at least some could be acquired by Tesla in their growth of Service Centers!

        1. rick says:

          Tesla looked at it..

  6. ffbj says:

    The compare and contrast between FF and this start-up, Rivian are quite evident. One is full of smoke and mirror and lots of hoopla the other quietly goes about it’s business and buys a factory.

    If I were a betting man I would go with the later company.
    Of course if we could look into the future then it would not be the future or the future that really would be, if we did not look into it.

  7. jimijonjack&jill says:

    Actions speak “LOUDER” than words!

  8. Alonso Perez says:

    Actually having a large automotive factory is far more significant that showing a prototype. Anybody can build a prototype. There are companies that build one-off cars on demand.

    Building a factory is nice, what FF is supposed to be doing, but hugely expensive once you start to fit it out with the kind of heavy tooling you need for automotive.

    Buying an actual, equipped factory for what is probably a ridiculously low amount of money (or perhaps just equity) is a very strong move. It’s hard to imagine Tesla today without the former NUMI plant, which cost them basically nothing.

    Prototypes count more than renderings but an actual factory beats them both by miles.

    Of course this is no guarantee of anything, but it’s a very good sign. The promised investment amounts are kind of low, but this makes sense because they are minimums set to get the tax abatement. These are probably not business targets.

    1. Yogurt says:

      I dont think this plant is anywhere near as vaulable as NUMI but I could be wrong…
      They orginaly could not find any buyers for the plant and it was sold to a liquidation company for 2.5 million (land and building) and they planed to buldoze it and auction the equipment…

      1. Alonso Perez says:

        Nobody expected NUMI to do better than that either. The only difference was location. Real estate in the bay area is insanely expensive, even in Fremont, compared to Illinois (outside the Chicago metro area).

        The plant is definitely smaller than NUMI. Peak output was “only” 220,000 cars. Still that’s quite a plant for a startup: Tesla is has still only achieved 1/3 of that rate.

      2. Pushmi-Pullyu says:

        I dont think this plant is anywhere near as vaulable as NUMI but I could be wrong…

        The article says that it’s half the size of Tesla’s former NUMMI plant, so it’s to be expected it’s not as valuable. However, if the heavy equipment is still in place, as (if my understanding is correct) it mostly wasn’t at the NUMMI plant when Tesla bought it, and if that equipment has only been out of service for a couple of years as stated in a comment above, then that would give Rivian an enormous advantage.

        Again, the contrast with Faraday Future is quite stark. This is the kind of startup that deserves being given a chance, and perhaps is worth a look from investors. Potential investors should run, not walk, away from a company like Faraday Future.

        1. Alonso Perez says:

          The equipment has been out of service for a bit over 14 months. Mitsubishi had the plant till June last year and probably did enough maintenance to keep the machinery valuable enough to sell. Then a liquidator took it over.

          So the liquidator has had the plant for six months. It does not appear that they stripped the plant in that time; they seem to have searched for a buyer. May have even offered it to Tesla for all we know. These deals take some time so I’m guessing that Rivian has been looking at it for a couple of months at least.

          Google images from the summer show the plant in reasonable shape, about 15 cars parked. More or less what you would expect for light maintenance.

          Somebody used red crates or pallets to write “THE END” on a north side parking lot. The plant is quite large, about 3,500 feet by 700 feet on average. It has railroad terminals. There is plenty of space around the plant available for expansion.

          Hard to be sure without word from Rivian, but it looks like the plant is more or less intact, unless they stripped it in the fall, but I doubt they would do that while negotiating with Rivian.

      3. rick says:

        Fully blown stamping shop.

  9. Blandman says:

    They appear to have significant financial backing and goodwill. I hope they are successful. Compared to the Tesla factory in Fremont, the Michigan plant will have lower overhead, thus easier to turn a profit on entry level EVs, if the choose to manufacture them. As others say, if the can keep it simple …

  10. MTN Ranger says:

    Reading between the lines, it appears that they will produce a price competitive non-luxury EV. This is unique compared to the other startups on the west coast.

    1. Yogurt says:

      While many round here question start ups following Teslas plan of selling to rich and then going down market I think it is far riskier to start by selling to everday joes…
      In the 2019 time frame esentialy every legacy automaker will be selling EVs that are cheaper and longer range than they are today…
      A start up simply does not have volume purchasing power to compete on a price point for normal vehicles…
      That said maybe they have something simpler easier and cheaper to produce…

      I do wish them well though but start up auto manufacturing is as hard as it gets…
      Apple and Google chickened out for a reason…

      1. Pushmi-Pullyu says:

        “While many round here question start ups following Teslas plan of selling to rich and then going down market I think it is far riskier to start by selling to everday joes…”

        Exactly.

        Down-market is a far, far harder EV market segment to penetrate, especially for a startup. For example, the Th!nk City car was bounced around between, as I recall, three different owners, who tried three different times to produce and sell the car. The economics of scale just don’t work for a low-end car made in small numbers.

        Yeah, the high-end EV market is getting crowded, with Tesla, Lucid, and Karma, not to mention the BMW i8 and probably others, but still that’s the market segment that Rivian should be aiming for with its first car. At least there they have a chance of selling at a profit, even if their “slice of the pie” will be small.

        Trying to follow Th!nk and CODA, aiming down-market but winding up with a car much too expensive to compete in its price segment, would just guarantee failure.

        There is a good reason Tesla started with a very expensive car, and has only gradually reduced the average selling price of newer models. That has enabled Tesla to succeed where other attempted EV startups outside China have failed.

      2. pjwood1 says:

        Gotta agree. There’s been no greater competition than jamming value in 20-50k price tags. Just hopping into Tesla’s sand box, and doing what they’re not, has got to count for something.

  11. Normal Grad says:

    As someone who grew up in Normal, Illinois this is absolutely wonderful to hear. The city of Normal has installed free charging outlets in their downtown area in the hopes that it will encourage EV adoption (remember the commercials for the Mitsubishi I in 2012?). The city has also made a huge effort to make the town bike friendly. This is honestly one of the best small towns in the Midwest for an EV company to operate out of.

    This is a highly educated town that I truly think will support whatever EV is produced here.

  12. floydboy says:

    Hmmm…they appear to be putting the horse BEFORE the cart, unlike Faraday. Good move!

  13. Ahldor says:

    Seems like the US automotive industry is heading towards a renaissance.

  14. Mister G says:

    I wish Rivian much success.

  15. Pushmi-Pullyu says:

    Now this looks much, much closer to how an automotive startup should be run! Working quietly at developing an automobile, and years later buying an existing auto assembly plant, rather than promising to build one when they don’t have the money to do it. The very antithesis of Faraday Future. Also, bonus points for not imitating Tesla’s name by choosing another electrical engineering pioneer, as Faraday Future did.

    Good luck to Rivian! Here’s hoping they offer Tesla Motors some real competition, because currently Tesla doesn’t have any.

    However, the repeated name changes and the relatively small amounts of investment money mentioned ($40.5 million, $175 million) are troubling indicators. The capital investment needed for an automotive startup is measured in the low billions, not merely hundreds of millions.

    But with the figure of 1000 employees mentioned, it seems Rivian intends to start fairly small. That’s probably a wise plan, and I wish them much success!

    1. Alonso Perez says:

      Bear in mind those figures are minimums promised to the city. I wouldn’t be surprised if their goals are much higher. At any rate we don’t know what they are.

      1. Pushmi-Pullyu says:

        Yes, and I could also be wrong about Rivian needing billions of dollars in startup money. If that auto assembly plant has most of its heavy equipment intact and still in operating condition, then they might be able to get away with a far smaller investment at start of production.

        At any rate, I’d far rather see more articles here at InsideEVs about Rivian than more about all-hat-and-no-cattle companies like Faraday Future.

        1. Alonso Perez says:

          Several hundred million can be enough, given the right suppliers and partners, and if they make few mistakes, and if the plant is in decent shape.
          The questions are how do they ramp, what will their car look like, how much funding do they have, and can get, what their sales model is, their service model, and so on.
          If they can start with a low volume, compelling car, and they have this factory, it won’t be hard for them to get a couple of hundred million in capital. A credible EV story can go to IPO pretty quickly, so investors have a possible exit.
          The odds are against them (like any car startup) but this is a pretty impressive move.

  16. James says:

    Comedians? World-class athletes? Will the comedians heckle the athletes who will push the cars around?

    Joking aside, they are light years ahead of Faraday, who has a big dirt lot and a joke car that costs $150k and was designed for crooked Chinese bureaucrats.

  17. Independatnt Observer says:

    Not to be a Debbie Downer, but there is additional information about this company.

    http://thecapitolist.com/questions-about-shady-car-company-plague-mayfield-in-sd17-race/

    There is some back & forth between the author and someone else in the comment section, so take everything with a grain of salt.

    1. Alonso Perez says:

      Well, two million isn’t a lot of money for actual hardware and they did build a prototype (though it was not an EV).

      They did change their name but because of a lawsuit by Hyundai: “Hyundai thinks Avera, a blend of “America,” and “verde,” as in green, and “terra,” meaning earth, “is too close to Azera,’ said Hyundai’s California-based director of public relations, Chris Hosford.”

      The road to startupdom is not straight, so these things are pretty normal. Even the article does not claim that they ever announced, sold, or took reservations for vaporware. It mostly seems focused on taking down a state senator who later married the company’s CEO. The article was written right during last year’s Republican primary for that seat.

      I’m not sure why they would have wanted to do the company in Florida. The state has no history as a manufacturing base for cars or anything else, nor is it a technology hub.

      The biggest discovery is that the prototype was not an EV. The company may have changed tack recently, or perhaps they are intent on mere hybrids.

      1. Pushmi-Pullyu says:

        I’m glad to learn that one of the two name changes was forced on them by outside forces, but what about the other?

        Repeated name changes are often a red flag. Sometimes a name change indicates a company is changing its name in an attempt to shed a bad reputation. But other times there is a much more positive reason. I hope the latter is true here!

  18. Yogurt says:

    Speaking of start up auto companies that took gov helpings…
    100k in the bank and 123 million in bills…
    But there should be a ex GM factory in Shreveport available soon…

    http://jalopnik.com/elio-motors-future-looks-doubtful-with-100-000-in-the-1790947889

    1. pjwood1 says:

      And to think some anti-competitive major probably used the tax-bennis to fund a negative branding campaign with the 3-wheeled, orange EV.

      It could have gone down as the greatest achievement in slowing EV adoption, if Toyota’s I-Rodeo hadn’t come along.

      Pushing Elio’s on Fox News was about a brilliant as exhibiting the I-Rodeo in urban, congested..Texas.
      http://corporatenews.pressroom.toyota.com/releases/texas+irodeo+2015.htm

  19. Kdawg says:

    Maybe FF should partner with Rivian and share the factory to make cars?

    I wonder if Rivian will have any info/ppl at the Detroit Auto Show next week.

    1. Anon says:

      I don’t think they have time for Fetid Fish’s foolishness, general lack of money or executive leadership…

    2. Pushmi-Pullyu says:

      Good grief, why would Rivian want to partner with an all-hat-and-no-cattle company like Faraday Future? What would FF bring to the partnership, other than debt, galactically clueless mismanagement, and a name which has become a laughingstock?

      Kdawg, please tell us you were joking! 😯

      1. Kdawg says:

        I was half-joking, though I don’t see FF as bad as you/others. I want them & LeEco to succeed, or at least succeed enough to push the needle for the established automakers.

        I don’t know the cash situation at Rivian, but maybe that’s one way they could help. Just seems like FF needs a factory and Rivian has one bigger than they need at this point.

        Two heads are better than one.

  20. Anon says:

    Eventually, one of these new startups is gonna survive, and thrive. 🙂

    Eat it, Lazy Legacy Automakers. 🙂

    1. Kdawg says:

      Lazy? I’m sure there’s a bunch of engineers/designers/etc that would take issue w/that statement.

  21. wavelet says:

    “You would think that, by now, if this wasn’t going to come to fruition, Rivian would have long since given up. ”
    Actually, that’s not how it works.

    A startup’s only advantage vs. a large company is the potential for being able to move quickly and be very focused, with less distractions than a large company. In any other sense, startups are disadvantaged — they don’t have the deep pockets, market clout with customers/suppliers, name recognition, experience etc. that larger ones do.

    The only time where a startup justifies working nearly a decade without coming up with products is when they have something revolutionary that takes a lot of time to develop and will be hard to copy, and an investor with lots of money & patience.

    Sorry, but that’s extremely unlikely in the EV space. The major challenges in EVs are integration, not innovation in any specific component/tech (EVs are conceptually much simpler than ICE vehicles), and scaling the entire operation.

    The website has zero content — even worse than FF.

    It’s much more likely that they have gullible or overoptimistic investors.

    1. Pushmi-Pullyu says:

      FF is an “all hat and no cattle” company. The FF website is a very nice hat.

      Contrariwise, Rivian has actual cattle; that is, an actual auto assembly plant. The hat can come later, when they’re actually ready to start selling cars.

      A fancy new hat on a self-proclaimed “rancher” with only a couple of calves does not impress me. I’m much more impressed by a rancher with a lot of cattle, and wearing an old beat-up hat.

  22. G2 says:

    “The more, the merrier” as a wise man once said….

  23. Hmmm says:

    The normal city manager drove a prototype car. Look up articles on the local pantograph website.

    http://www.pantagraph.com/business/local/normal-oks-rivian-car-plant-deal/article_80694f71-dfe5-5d04-b622-26271b3ec73e.html

  24. JIMJFOX says:

    Electric buses? Or, converting existing diesel buses to full electric [using hub motors] is apparently economically viable. I wonder what the market might be? Buses don’t need the ‘bling’ that cars seem to.

  25. HVACman says:

    Buying automotive mass-production factories is easy. Engineering, building, marketing, selling and servicing mass-production automobiles and surviving long enough to eventually make a profit is HARD. Go as Tesla.

  26. JeffD says:

    I wish them well. As someone who lives in Illinois not terribly far from Bloomington, the area will benefit from the jobs this company will bring if everything works out.

  27. Daytongarmin says:

    Looks like Elon’s plan is working.
    Tesla is not a car company. It is a “change” organization. Their current cars are a relatively minor part of the plan. Important but temporal.