Electric vehicle manufacturer Rivian is going underground — literally and strategically — as it prepares for a major expansion in 2026. The company announced a $120 million investment in a new 1.2 million-square-foot supplier park adjacent to its existing plant in Normal, Illinois, aimed at supporting production of its upcoming R2 SUV, a more affordable EV that’s central to Rivian’s next phase of growth.
Building an Ecosystem, Not Just Cars
“This will be a key enabler to increasing production at the plant in 2026,” said CEO RJ Scaringe, as the company plans to build the R2 alongside its flagship R1S SUV, R1T pickup, and commercial vans.
Governor JB Pritzker joined the announcement and highlighted the broader vision: “In Illinois, we aren’t just making electric vehicles: we are creating an entire ecosystem.”
The new facility is backed by a $16 million incentive package from the state, including a $5 million REV Illinois tax credit, and will initially create around 100 direct jobs, with hundreds more expected from suppliers within the next two years.
Lower Costs, Tighter Supply Chains
The supplier park is expected to cut shipping, warehousing, and logistics costs, as suppliers will now have on-site facilities to assemble and manufacture parts. Once completed, components will be transported via an underground tunnel to the main production plant—a first-of-its-kind move for Rivian.
Parts will be “kitted and sequenced” by Rivian employees before making the underground trip, a move meant to streamline just-in-time assembly and boost production efficiency.
R2 is Critical—and So is Cash Flow
Rivian’s smaller and more affordable R2 SUV, starting around $45,000, is seen as the company’s most important launch yet. As the EV market cools and price sensitivity rises, Rivian is positioning the R2 as its volume-seller.
To speed up its arrival, the company paused construction of a new plant in Georgia last year, shifting initial R2 production to the Normal facility. That plant will eventually produce the R2 and the future R3 crossover models when construction resumes, likely by 2028.
“We’re moving fast—but strategically,” said CFO Claire McDonough, who also acknowledged that deliveries would dip this year as Rivian retools operations. In Q1 2025, the company reported a 36% drop in deliveries, citing soft demand and even fire-related disruptions in Los Angeles.
Tariffs and Headwinds Ahead
Rivian’s investment also comes as U.S. automakers navigate a shifting global trade landscape. Recent tariffs imposed by former President Donald Trump on vehicle and parts imports are putting pressure on supply chains and potentially increasing prices.
To mitigate backlash, Trump signed two orders last week offering credits and partial relief on some levies, but automakers like Rivian still face rising costs and unpredictability—factors that further validate the company’s push for domestic vertical integration.
A Tunnel to the Future
Between the massive supplier park, a tunnel-connected facility, and its production shift toward the R2, Rivian is carving out a distinct path—one that’s both grounded in strategy and literally rooted in the Illinois soil.
As the EV race continues to evolve, Rivian’s approach suggests the company is not just trying to compete—but to rewire how electric vehicles are built in America.
