Abdul Lateef Jameel-backed EV maker Rivian is investing USD 120 mn to build a supplier park expansion near its facility in the US state of Illinois, according to a press release issued on Monday. The expansion aims to support the company ramping up its production of the smaller and cheaper R2 SUV models next year. Construction is set to be completed in 2026.

There’s a lot to gain: The supplier park is expected to reduce shipping, logistics, and warehousing costs as suppliers move into the park. It will also support increased production of its R1 SUVs and commercial vans and create hundreds of jobs over the next two years.

There’s more in the works: The company signed a USD 6.6 bn federal loan agreement with the former Biden Administration for its stalled Georgia plant. Rivian had paused the construction of a plant in Georgia that it was planning to use to manufacture R2 to cut costs and speed up production before moving over to Illinois, according to Reuters.

BACKGROUND- Rivian reported a 36% decline in 1Q deliveries in April after it expected to deliver between 46k-51k EVs this year, falling short of Wall Street analysts’ estimates of around 54.8K, it said in a shareholders’ letter earlier this year. The company also lowered its annual production forecast in October by over 14% due to parts shortage and demand slowdown after closing its Illinois facility for three weeks in 2024 to streamline its manufacturing processes and reassess the costs of building its vehicles.

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