In a boon to the city, electric car manufacturer Rivian has opened a new facility in Milpitas.
Though the facility only creates a handful of jobs, it kicks off a multi-million dollar tax deal that could help net much-needed revenue to a city facing a growing deficit.
“It’s a win-win situation. It’s gonna be beneficial to the city,” said Milpitas Mayor Carmen Montano.
The facility, dubbed a “Last Mile Hub,” will serve as a space for sale and pick up of the vehicles, and host inspections, leases and vehicle service. The hub is located on Yosemite Drive in Central Milpitas near Highway 680, and the city commemorated its opening with a ribbon cutting late last month.
The Irvine-based company Rivian was founded in 2009, and makes electric trucks and SUVs which currently boast price tags of $70,000 or more. Similar Rivian facilities in the Bay Area can be found in San Francisco and north San Jose.
While Rivian has performed stronger than its peers, the EV market has faced headwinds with the federal government’s rollback of tax credits for EVs and weakening of efficiency standards.
Since cars would be sold in Milpitas, the city could gain millions in sales taxes from the vehicles. In March 2025, Milpitas City Council approved an eight-year agreement to attract the car company to the city, where the company would receive a tax rebate in exchange for locating in Milpitas.
For the first three years, Rivian would get a 35% rebate on its sales taxes, which would go up to 50% in the following years. The facility would also bring at least 25 jobs to the city, according to a staff report.
“Milpitas is now a key link in Rivian’s mission to keep the world adventurous forever,” said Tommy Carrillo, director of commercial facilities feal Estate at Rivian, in a statement. “The City of Milpitas has been an invaluable partner in bringing this project to life, and we are grateful for its collaboration.”
The city could gain more than $19 million in revenue over the eight-year contract. Though Rivian would receive $16 million in kickbacks through the deal, Montano painted that as an important incentive. “You give some to get some,” she said.
If the Rivian’s sales predictions hold, the sales taxes could help fill a multi-million dollar budget gap forecasted over the next five years, said Milpitas Finance Director Luz Cofresí-Howe.
City staff estimated a $19.2 million shortfall over the next five years, but these estimates did not include the potential revenue from the new Rivian location. Once the facility begins to pay sales tax, staff will update their forecast for the budget.
Given the potential for the spot to serve as an economic salve to the city’s financial ills, Cofresí-Howe expects the deal to be renegotiated before it expires in eight years.
