Rivian stays ahead of the curve
President Trump’s executive order imposing a 25% tariff on vehicle and part imports sent a shockwave through the auto industry, but some companies appear to have been more prepared than others. A Bloomberg report from people familiar with the matter who asked not to be identified says Rivian quietly assembled a reserve of electric vehicle (EV) batteries late last year ahead of Trump’s tariff policy. Rivian is said to have purchased the lithium iron phosphate cells from China’s Gotion High-Tech company and more recently worked with cell supplier Samsung SDI to ship a large amount of battery inventory to the U.S. from South Korea. The measures aim to maintain a supply flow and mitigate negative ripple effects from Trump’s policies in areas like pricing, which the president enacted on April 3 for vehicle imports, whereas part levies will begin on May 3. The number of cells that Rivian purchased from Gotion High-Tech was undisclosed.
Getty
Rivian uses lithium-ion phosphate batteries in its base version, the RS1 SUV and R1T pickup, along with its commercial RCV van. However, the Gotion High-Tech order before Trump’s tariffs was said to be primarily for the RCV. These vehicles are assembled in Normal, Illinois, at Rivian’s plant. The report from Bloomberg states that Rivian paid upfront for the batteries’ shipping costs while Gotion paid and maintained its separate stockpile in the U.S., according to InsideEVs. Rivian is also said to be pursuing similar deals for batteries on raw materials in the future, with a first agreement already signed.
Related: What Tesla and Rivian Can Learn from Saturn and Scion
The automaker’s upcoming 5-seat R2 SUV will use new batteries from LG Energy Solution, which it will initially source from Korea before LG begins production in Arizona. The switch aimed to better accommodate the Inflation Reduction Act (IRA) enacted under former President Biden, which requires that a certain percentage of a vehicle’s battery components be manufactured or assembled in North America to qualify for up to $7,500 in federal EV tax credits. Rivian is currently building a second U.S. plant in Georgia.
Rivian
Final thoughts
Rivian’s stock increased from $13.19 on Monday to $13.83 at the end of Friday trading following reports of its strategic response to impending tariffs. Other automakers, such as General Motors, have projected a $4 billion to $5 billion loss in EBIT (earnings before interest and taxes) for 2025 as a result of Trump’s policies, down from the company’s initial EBIT forecast for the year of between $13.7 billion and $15.7 billion.
Rivian’s move with China Gotion High-Tech could save significant sums, given that U.S. tariffs on Chinese EV components and lithium-ion battery imports have hit a staggering 145%. The EV manufacturer received more good news when Trump signed a new executive order on Tuesday preventing multiple tariffs from being stacked on the same imported product for companies making cars in the U.S. While the timeline for how long Rivian can maintain its supply chain remains to be seen, the company’s big bet on batteries is paying off.
