Rivian and Capacity Utilization

By Gary S. Vasilash

Last year Rivian produced 57,232 vehicles in its assembly plant in Normal, Illinois.

Which made it somewhat curious when it announced last year that it was planning to break ground for a new factory this year for a plant in Georgia that would have the capacity to build 400,000 units.

The Rivian plant in Illinois began its production existence in 1988 when it was the Diamond-Star Motors factory.

Diamond-Star? It was a joint venture between Chrysler and Mitsubishi.

Chrysler had had a bit of a financial fix in 1991, so it sold its half of what was the Diamond-Star plant to Mitsubishi.

Being the sole owner, it changed the name of the plant to “Mitsubishi Motor Manufacturing of America” (MMMA). Things didn’t work out so well, so Mitsubishi stopped making cars there in 2015, when 38,186 vehicles were built.

Here’s the thing: As originally configured the plant had a production capacity of 240,000 vehicles.

The highest number of vehicles produced at MMMA was 222,414. Nearly full production.

Rivian bought the then-2.6-million square-foot plant in January 2017. And set about on an expansion.

But according to Rivian, the annual capacity at the factory is 150,000 vehicles. Presumably making R1Ts, R1Ss and EDVs is somewhat more complicated than iMEVs (which are arguably much smaller than any of those Rivians).

Rivian R2 is supposed to go into production in Illinois in 2026. (Image: Rivian)

When it announced the R2 and R3 models yesterday it was announced that rather than waiting for the factory to be built in Georgia for the production of the new models, it is putting the R2 into the Normal plant which will have, by R2 launch time in 2026, an expansion of capacity to 215,000 vehicles.

Here’s the thing. Whether the capacity is 150,000 units or 215,000, that’s an awfully big delta between either and ~60,000 vehicles.

It is a rule of thumb in automotive manufacturing facilities capacity utilization has to be at from 70% to 80% to be cost effective.

Seventy percent of 215,000 is 150,500.

Rivian has a long way to go to get there and not a whole lot of time.

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