Rivian's Factory In Georgia May Face Setback Due To Court Ruling

A judge ruled against Rivian's property tax incentives, which were a major part of the potential incentive package.

By: Steven Loveday

Oct 3, 2022 at 12:53pm ET

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As we watch automotive startups attempt to navigate their way to success, it seems every time things are potentially looking up, there are setbacks. Rivian is successfully delivering electric pickup trucks and SUVs, and its vehicles have arrived to positive reviews. However, it's struggling to ramp up production, the financial situation appears difficult, and now a judge's ruling may cost Rivian a pretty penny.

Rivian revealed its factory plans to the public and moved forward with the beginning of work rather quickly. The new EV factory in Georgia could cost Rivian upwards of $5 billion. However, thankfully, incentive packages provide some help for startups in such situations. One of the reasons Rivian likely decided on Georgia was the attractive $1.5 billion in incentives, which could pay for about a third of the factory project.

Sadly, according to Drive Tesla Canada, a judge's ruling related to the incentives could prove trying for the automaker. One major part of the incentive package was property tax incentives. The publication explains that if the property tax incentives remained in place, Rivian would have only had to pay $300 million in local and school taxes over 25 years. Now, it may have to pay much more.

People who were opposed to the initial incentive package filed a lawsuit so that Rivian would have to pay its fair share. Ocmulgee Superior Courts Chief Judge Brenda Holbert Trammel sided with those against the property tax incentives, ruling that Rivian didn't establish that the credits “are sound, feasible and reasonable.”

Meanwhile, the Georgia Department of Economic Development, along with a joint authority from surrounding counties, restated their commitment to making the plans work for Rivian. The groups are looking at all legal angles going forward and they added that they'll “work with Rivian to move this project forward and see it through to completion.”

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Drive Tesla Canada asked Rivian whether it had plans to appeal, but the company hadn't responded at the time of writing. We've also reached out to Rivian to request additional details.

What do you think? Should companies like Rivian get property tax incentives as part of these packages? Share your opinions in our comment section below.

Source: Drive Tesla Canada