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Rivian Automotive Inc.<\/a>\u00a0is halting plans to build a new multibillion-dollar factory in Georgia, an abrupt reversal aimed at cutting costs while the company prepares to launch a cheaper electric vehicle.<\/p>\n The decision will save the automaker more than $2.25 billion in capital expenditures, the company\u00a0said<\/a>\u00a0in a filing Thursday. Shifting planned production of the forthcoming R2 model to an existing facility in Illinois will allow Rivian to begin deliveries in the first half of 2026, earlier than expected. The surprise announcement plunges the high-profile factory project into uncertainty, but Chief Executive Officer\u00a0RJ Scaringe\u00a0said it remains important to the company.<\/p>\n Shares of the automaker jumped as much as 16% after the announcement, their biggest gain since July. The stock was already down\u00a0more than 50%\u00a0this year through Wednesday on concerns over Rivian\u2019s cash and consumer demand for its products.<\/p>\n Rivian in 2022 secured a\u00a0$1.5 billion package<\/a>\u00a0of state and local incentives \u2014 the biggest in Georgia\u2019s history \u2014 to build the massive plant outside Atlanta. The company pledged at the time to create 7,500 jobs by the end of 2028, winning praise from local lawmakers.<\/p>\n The retreat comes two weeks after Rivian announced\u00a0job cuts<\/a>\u00a0and said it would keep production flat this year, falling well short of expectations and triggering\u00a0a heavy selloff\u00a0in the shares. The company has struggled to transition to mass production since going public in 2021, and the high prices of its models have been a hard sell as overall demand for EVs fades. Rivian has never made a profit and it lost more than $40,000 on every vehicle it delivered in last three months of 2023.<\/p>\n Also on Thursday, Scaringe unveiled the long-anticipated R2, a mid-sized electric sport utility vehicle that will start at around $45,000. That\u2019s about $30,000 less than Rivian\u2019s existing SUV and just under the US average new car sticker price of more than\u00a0$48,000<\/a>.<\/p>\n The two-row SUV will be available in two battery pack sizes, with the larger option offering a range of more than 300 miles on a single charge. Customers can chose from one, two or three motor variants of the SUV. Rivian\u2019s also giving the vehicle more advanced autonomous technology with a sensor suite made up of 11 cameras and five radars.<\/p>\n Read More: Elon Musk says Rivian needs to \u2018cut costs massively\u2019 and its execs should \u2018live in the factory\u2019 for the struggling Tesla rival to survive<\/a><\/p>\n Rivian, one of the few pure-play EV makers manufacturing in America, is trying to grab market share from\u00a0Tesla Inc.<\/a>\u00a0with the new model, its first aimed at the mass market. The effort highlights a push by automakers to bring down costs in an environment of slowing demand for EVs, with manufacturers from Tesla<\/a> to\u00a0Ford Motor Co.<\/a>\u00a0to China\u2019s\u00a0BYD Co.<\/a>\u00a0cutting prices.<\/p>\n Scaringe also surprised investors with a prototype of a future crossover EV called R3. Rivian said this model would be priced lower than the R2, without giving a dollar amount or timeline for when it might be built.<\/p>\n Rivian currently makes two consumer plug-in EVs, the\u00a0R1T pickup<\/a>\u00a0and\u00a0R1S SUV<\/a>, and a\u00a0commercial van<\/a>\u00a0primarily for\u00a0Amazon.com Inc.<\/a>, its\u00a0biggest shareholder. All are built at the plant in Normal, Illinois.<\/p>\n<\/div>\n\nSubscribe to the Eye on AI newsletter to stay abreast of how AI is shaping the future of business. Sign up<\/a> for free.<\/div>\n