According to recent reports, U.S. electric vehicle manufacturer Rivian has announced plans to invest $120 million in building a supplier campus near its factory in Normal, Illinois. This development is set to commence production of the smaller, more affordable R2 SUV model next year.

Rivian stated that the supplier campus, located near its Normal facility, will significantly reduce transportation, logistics, and warehousing costs. Over the next two years, the project is expected to create hundreds of jobs, with approximately 100 positions to be directly hired by Rivian.

All of Rivian’s electric vehicles, including its flagship R1S SUV and R1T pickup truck, are currently produced at the Normal plant. Rivian CEO RJ Scaringe emphasized that the supplier campus will be a critical driver in enhancing the factory’s production capacity. By 2026, in addition to producing the R1 series and commercial vans, Rivian will also begin manufacturing the R2 model.

Rivian further explained that some suppliers will manufacture and assemble specific components within the new campus. Rivian employees will then organize and sequence these parts before they are transported to the main factory via a dedicated underground tunnel.

In an effort to conserve capital and accelerate the production of the R2 model, Rivian paused the construction of its Georgia plant last year and decided to commence R2 production at its Normal facility. Against the backdrop of slowing growth in the electric vehicle market, the mass production of the R2 model is seen as pivotal to the company’s success. According to Rivian’s plans, the Georgia plant is slated to begin mass production of the R2 SUV and R3 SUV models in 2028.

In April, Rivian reported a 36% decline in its first-quarter deliveries. CFO Claire McDonough noted in February that due to weak demand and the impact of the Los Angeles fire incident, the company expects a reduction in vehicle deliveries this year.

As Rivian invests in building a supplier park, automakers continue to face challenges—President Trump’s tariffs on imported vehicles and components are expected to disrupt supply chains and increase manufacturing costs. Although Rivian produces vehicles domestically, it relies on many imported components, exposing the company to cost pressures from the tariff policy.

Recently, Trump signed two executive orders aimed at mitigating the impact of his auto tariffs through a combination of tax credits and reductions in tariffs on certain raw materials.