Rivian Automotive (NASDAQ:RIVN) shares jumped more than 5% Friday on the news that Javier Varela will join as its Chief Operations Officer and that the company has received an $827 million incentive package from the State of Illinois Department of Commerce & Economic Opportunity.
The state subsidy will allow the company to expand operations at its plant in Normal, IL. The funds will go towards expanding the plant, improving public infrastructure, and offering job training programs for Rivian's workforce, leading up to the company's production of its midsized SUV, R2.
Reacting to the subsidy news, analysts at Stifel said the announcement "strengthens Rivian's public perception and arguably its standing with the state of Georgia where it has delayed the previously announced plant and faces criticism from state officials."
"We are more optimistic on the company's ability to achieve success with R2 at Normal and the liquidity flexibility it provides for RIVN to ultimately develop the Georgia plant," the firm added.
At 09:46 am ET, Rivian's stock was trading at $10.34 per share, marking a 5.2% increase from Thursday's closing price. This upward trend reflects the positive market sentiment following the recent developments.
Meanwhile, Varela joins Rivian from Volvo Cars, where he served as the company's Chief Operating Officer and Deputy Chief Executive Officer. He is set to take up his new role at Rivian in August, reporting directly to Founder and Chief Executive Officer RJ Scaringe.
"We are thrilled that Javier is bringing his deep experience in the automotive industry to Rivian as we are focused on profitability, operational excellence and delivering R2 to customers as soon as possible," said RJ Scaringe.