CNBC’s Mad Money host Jim Cramer said on Monday that investors should avoid buying Rivian stock now while criticizing the money spent at the upcoming plant in Georgia.
The comments came four months after Cramer said that Rivian was a more compelling investment than its US rival Lucid Motors.
By then, the TV host said to an investor, “Let’s put our money with something that is going to make a little more sense than Lucid,” suggesting its Irvine-based competitor instead.
The stock is up 17% year to date and 40% over the last twelve months.
During Monday’s Lightning Round segment, the host and former hedge fund manager was responding to an investor who questioned about the EV stock.
“Now, here’s the problem, Jim. They spent a lot of money on that factory,” Cramer said, referring to the Georgia plant which is expected to begin production in 2028.
The Irvine-based company held an official groundbreaking ceremony for its $5 billion plant in Georgia last week.
Both its CEO, RJ Scaringe, and the Governor of Georgia, Brian Kemp, host the event.
Plans for the factory were announced in late 2021, with the state of Georgia assuming the project site in early 2022.
The facility is expected to take approximately 36 months to build, with partial operations projected to begin in the third quarter of 2027 and sales of its production to start in 2028.
Rivian is supported by both the state of Georgia — which has invested over $1.5 billion in incentives to develop the 2,000-square-foot factory — and the US Department of Energy (DOE).
The state invested more than $1.5 billion in incentives to build the 2,000-acre facility, assuming the company fulfills 80% of its promise to create 7,500 jobs and make the corresponding investments by 2030.
Earlier this year, Rivian has further secured conditional approval for a loan of up to $6.6 billion from the DOE to finance construction of the plant. However, the EV maker must restart construction of the facility before being granted access to the loan.
In this scenario, Cramer advised that, “if we have a slowdown and the Fed doesn’t bail us out, I think you’re going to find that stock, you can buy that stock lower.”
“So I say, wait, wait, wait. Don’t pull the trigger here,” he said, noting that the EV maker’s stock is “up on a spike.”
Rivian‘s shares closed 1.9% higher at $15.53 on Tuesday.
The stock has risen 10% over the last five days and 17.5% over the past 30 days. In twelve months, it has gained 40.8%.
