Rivian Automotive has created a major PR disaster and a giant battery graveyard. This strategic transition allows them to reduce or eliminate harmful tariff-related costs for automotive parts. The electric vehicle manufacturer collaborated with Samsung SDI to transfer a large inventory of battery supplies from South Korea to the United States. It’s all part of a larger play by Rivian to ramp up its production capacity for electric trucks, SUVs, and commercial vans.
Earlier this month, Rivian announced a deal with Samsung SDI to strengthen its battery supply. In the run up to this past election, it procured a questionable number of lithium iron phosphate batteries from the Chinese company Gotion. This two-pronged battery procurement strategy is another example of Rivian’s forward-thinking moves to avoid potential market disruptions caused by tariffs.
Rivian’s stockpiles are particularly crucial in light of the auto tariffs implemented during Donald Trump’s presidency. These tariffs have added considerable financial stress to car manufacturers, many of whom depend on imported components. Rivian is stockpiling batteries to offset the effects of tariffs. These tariffs are intended to artificially increase the price of any vehicle assembled in the U.S. that contains foreign parts.
Rivian intends to repurpose the majority of the batteries it receives for use in its delivery vans. A big chunk of these will be heading to Amazon, which has deeply invested in Rivian’s electric vehicle efforts. This partnership further emphasizes Rivian’s dedication to addressing the increasing need for eco-friendly delivery options.
Market analysts have indicated that, despite Rivian’s efforts to stockpile batteries, the ongoing tariffs could “still likely lead to price hikes on new cars.” This forecast suggests that while Rivian may have positioned itself advantageously through its inventory, external economic factors could still affect pricing strategies in the EV market.