Rivian (RIVN) is charging ahead with another major project. The EV maker is building a new 1.2 million-square-foot supplier park near its Normal, Illinois, manufacturing plant as part of a nearly $120 million investment. With a $16 million incentive package from the state, Rivian expects it to be “a key enabler” as it ramps up EV production.

Rivian to get $16 million for a new supplier park

Rivian and Illinois Governor JB Pritzker announced the new supplier park on Monday. The nearly $120 million investment will create about 100 direct jobs “while bolstering the supply chain and manufacturing ecosystem” in the state.

“In Illinois, we aren’t just making electric vehicles: we are creating an entire ecosystem,” Pritzker said in a statement.

A subset of Rivian’s suppliers will complete light assembly and manufacturing at the new 1.2 million-square-foot site. Then, to accelerate output, the parts will be moved to Rivian’s main plant through an underground tunnel connecting the two.

Construction is slated to be completed in 2026. Rivian’s CEO, RJ Scaringe, said the new supplier park will be “a key enabler to increasing production” when the company launches its midsize R2.

The state of Illinois is offering Rivian a $16 incentive package to offset some of the upfront costs, including a $5 million Reimagining Energy and Vehicles (REV Illinois) tax incentive over 20 years.

Rivian said the new supplier park will also help boost production of its current EVs, the R1S, R1T, and Commercial Van, all built in Illinois.

In addition to the new supplier park, Rivian is upgrading its manufacturing plant with a 1.1 million-square-foot expansion to prepare for R2. Once the upgrades are complete, Rivian expects an annual production capacity of around 215,000 vehicles, up from 150,000.

Rivian said R2 is still on track to launch in 2026. It will start at around $45,000, or nearly half its current R1S and R1T.

Rivian plans to open its new plant in Georgia in 2028. Once up and running, it’s expected to increase annual vehicle production capacity to around 400,000 units.

As it upgrades the facility, Rivian expects fewer vehicle deliveries. After delivering 8,640 vehicles in the first quarter, the company reaffirmed plans to deliver between 46,000 and 51,000 in 2025.