What happened
Shares of electric vehicle (EV) start-up Rivian Automotive (RIVN +2.09%) began the week's trading in the same direction they have been moving over the last month. The stock was down more than 7% early Monday, and remained 4.1% lower as of 2:44 p.m. ET.
So what
Rivian shares are down more than 35% in the last month. And that includes a recovery over the past week that boosted the stock by 20%. There were good reasons for the decline after the company cut its production forecast and noted a sharp rise in costs. Now, the company is getting more potentially bad news concerning its growth plans.
Rivian's factory in Illinois. Image source: Rivian Automotive.
There has already been local opposition for its plans to build a new $5 billion factory in Georgia with a capacity of 400,000 vehicles per year. Now the project is coming under further scrutiny at the same time the state's legislators failed to move forward on a bill that would let Rivian and other EV makers sell vehicles directly to consumers in Georgia.
Now what
The Atlanta Journal-Constitution reported today that a local public official and his siblings own 675 acres of property that would be purchased for the Rivian plant. That could net the family members more than $20 million, according to the report. The official, Alan Verner, was head of the Joint Development Authority at the time discussions for the project began.
In addition to that potential conflict of interest, two bills being reviewed by Georgia's legislators allowing direct sales and service of EVs by manufacturers failed to advance to a final vote last week, reports clean-energy industry follower CleanTechnica.
The legislation can be reintroduced next year, and this setback doesn't really change things for Rivian in the near term. But the company, and its investors, are counting on significant growth in production for the young company.
With a market cap of more than $40 billion already pricing some of that in, any trouble for the massive Georgia project getting off the ground could push some investors to react by selling the stock, as they have today.
