Rivian secures $827m in public funding from Illinois Department of Commerce & Economic Opportunity despite announcing 10% workforce cuts earlier this year. Javier Varela appoitned new COO ahead of R2 production

The Rivian R2

The $827 million incentive package from the state of Illinois will enable Rivian to quickly bring the R2 to market according to Rivian CEO RJ Scaringe

North American pure EV player Rivian has received a critical $827 million incentive package from the State of Illinois, enabling it to expand operations at its factory, located in the state town of Normal. The incentive comes from Illinois Department of Commerce & Economic Opportunity (DCEO), part of whose mission is “to usher in the new clean energy economy.”

Along with plant expansion, funding will be used for “improvements in public infrastructure and job training programs for Rivian’s workforce,” as the carmaker prepares for the production of its mid-sized SUV, the model R2, originally expected to begin in 2026.

Rivian Founder and Chief Executive Officer RJ Scaringe, offered comment, saying: “We are grateful for this investment from the State of Illinois and for the leadership of Governor Pritzker, President Harmon, and Speaker Welch. The support from the state will allow us to quickly bring our midsize SUV, R2, to market and provide even greater consumer choice for EVs.


”Our business is not immune to existing economic and geopolitical uncertainties, most notably the impact of historically high interest rates”, RJ Scaringe has said in the past 

“Governor Pritzker has always been a strong advocate for providing economic opportunities for Illinois residents and business owners alike. We look forward to continuing our close partnership and building upon the success we have enjoyed.”

Governor Pritzker replied: “Illinois is positioned to be a powerhouse in this market for years to come, bringing quality jobs and revitalising communities across the state. I want to thank our partners at Rivian, who have doubled down on their investment in Illinois.

“Together, we’re taking a tremendous step forward – for our electric vehicle ecosystem, for our economy, and for our state. Each and every dollar invested in this market is a win for the working people of Illinois and brings us a step closer to meeting our ambitious climate goals.”

Alongside the R2, Rivian’s plant in Normal will continue to produce the R1S and R1T models, as well as commercial electric delivery vehicles, with facility expansions and  upgrades expected to begin in the coming months.


The success of the model R2 seems to be critical, garnering new hires as well as departmental reorganisations 

The Normal plant has already seen more than $2 billion in investments, and manufactured over 100,000 electric vehicles since production began in 2021, but the DCEO funding is welcome news for Rivian, which announced a disappointing quarter back in February of this year, and shared that it would cut its salaried workforce by roughly 10%.

Elon Musk predicts Rivian’s unravelling, but $827 million could change everything

At the time of the announcement, Elon Musk took to X, tweeting: “They need to cut costs massively and the exec team needs to live in the factory or they will die.” Musk predicts that Rivian is set to see bankruptcy in approximately six quarters, on its current trajectory.

The Tesla CEO had already shared back in June 2022, that Rivian should “cut costs immediately across the board dramatically or they’re doomed.” Rivian CEO, Scaringe replied on an earnings call: “Our business is not immune to existing economic and geopolitical uncertainties, most notably the impact of historically high interest rates, which has negatively impacted demand.”

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With Javier Varela appointed to COO, is the R2 SUV the make or break for Rivian?

A lot hinges on the production success of the R2. With the newly-secured fortuitous funding and resulting plant expansions to the model’s runup, Rivian also recently announced that Javier Varela will be joining its ranks as Chief Operations Officer (COO) as the EV maker reorganises for optimal operational efficiencies, specifically mentioning the hire as relating to the R2’s production.

Varela will oversee operations across production, procurement, logistics and quality, integrating aspects across automotive which were once seen as unrelated, distinct and siloed, following an emerging automotive trend towards assimilation of departments and functions. He joins Rivian from Volvo Cars, where he served as COO and Deputy CEO, and will begin his new role at Rivian this August, reporting directly to CEO, Scaringe.