Should Rivian Build A £1bn Vehicle Factory in the UK? Benefits & Factors To Consider
Rivian, an American electric vehicle manufacturer, is in talks with the UK government to build a £1bn vehicle-production facility in Somerset. The perks include a new exit off the M5 motorway for easy access to the plant, the recommissioning of a railway link in the area and numerous training facilities. This 635-acre site could be used for battery production, car assembly or both if the plans are to go ahead. The deal would likely include financial support from the UK taxpayer, with the investment expected to be worth more than £1 billion.
Rivian has been making waves in the EV industry since its founding in 2009 by R.J. Scaringe. With their all-electric pickup truck and SUV set to hit showrooms soon, they have recently announced that they are looking into building a factory in the UK. While this may seem like too much too soon for some, it could be just what Rivian needs to keep investors happy as well as expand their reach into Europe.
The potential benefits of having a factory in the UK are clear - not only would it make exporting vehicles to Europe easier due to proximity, but Amazon could also use plenty of electric vans there as well. Additionally, many urban centers in Europe only allow electric vehicles to enter, so having a presence there could be beneficial for Rivian’s growth.
However, before committing to such a large undertaking, Rivian should take into consideration whether or not it would be wise to dial in their manufacturing process here in the US first. After all, learning from mistakes before outfitting a UK plant can save them time and money down the road. Not only that but now that Brexit has happened, exports from the UK to other EU countries still need to go through customs and regulations that apply to vehicles are now different and diverging.
Ultimately, while setting up a factory in the UK may be tempting due to incentives offered by the government, Rivian should carefully consider all factors before taking on such an endeavor. If done correctly however, it could prove very beneficial for their growth and success in Europe.
What are the perks of Rivian's proposed £1bn vehicle-production facility in Somerset?
The perks include a new exit off the M5 motorway for easy access to the plant, the recommissioning of a railway link in the area and numerous training facilities.
How much is the investment expected to be worth?
The investment is expected to be worth more than £1 billion.
Could the 635-acre site be used for battery production, car assembly or both?
The 635-acre site could be used for battery production, car assembly or both if the plans are to go ahead.
Is it too soon for Rivian to build a UK factory?
It might be. If it wasn't for them being a public company I doubt we'd see news like this so soon. The stock finally broke a resistance level it that the price was hanging around the last few weeks. Gotta keep those investors happy.
Why should Rivian open a UK plant?
Rivian has access to huge amounts of cash and the order book will take off once they can supply vehicles, so setting up factories to create future supply while they can is a good idea.
What advantages does the UK have over other locations for Rivian's factory?
Proximity to Europe is an advantage as vehicles can be driven over without needing shipping containers. The UK is also a large consumer of cars, so having a factory there could be useful.
Will Brexit affect Rivian's plans for a UK factory?
Exports from the UK to the EU still need to go through customs etc., and the regulations that apply to vehicles are now different and diverging, so the UK is no longer a foothold on the continent, as it used to be. Ireland may be better suited for getting into the EU market.
Does Tesla have an advantage over Rivian when it comes to building factories?
Yes, Tesla has an advantage with their 100% drive by wire steering, etc.... easy to hang the wheel on either side of the car along with (already electronic) accelerator pedal. The hydraulic brake pedal shouldn't be difficult to relocate either. Rivian will have to do some extra work to make sure the cars are built correctly.