Rivian’s Bold Battery Move

Rivian’s Strategic Moves

When President Trump decided to impose a hefty 25% tariff on vehicle and part imports, it sent ripples through the entire automotive industry. But here’s the deal: Rivian, the electric vehicle trailblazer, seemed to have its ducks in a row well before the storm hit. A bit of insider info shared by Bloomberg points out that Rivian proactively gathered a stockpile of electric vehicle batteries in anticipation of the tariff. They sourced these lithium iron phosphate cells from China’s Gotion High-Tech and complemented their stash by working with Samsung SDI to bring more inventory over from South Korea. This strategy aimed to keep the wheels turning smoothly without letting the tariffs trip up their pricing or production lines. The specifics on just how many cells Rivian managed to secure from Gotion High-Tech remain under wraps.

Battery Tactics

Rivian’s approach to batteries isn’t just about adapting to challenges but staying a step ahead. Their RS1 SUV, R1T pickup, and the commercial RCV van all rely on lithium-ion phosphate batteries. The substantial order from Gotion before the tariffs mainly catered to the RCV production needs. Rivian builds these vehicles at their Illinois plant in Normal, where they also footed the bill for shipping. Meanwhile, Gotion held a separate battery stock in the U.S., ensuring a steady supply. Future-forward, Rivian is set on more deals for battery raw materials, with at least one agreement already inked.

Not to be left behind, their upcoming R2 SUV will be juiced with new batteries sourced from LG Energy Solution, initially coming from Korea. But here’s the kicker: LG is gearing up to start manufacturing these batteries right here in Arizona. This move is a strategic play to maximize benefits from the Inflation Reduction Act (IRA), which dangles up to $7,500 in federal EV tax credits for vehicles that meet specific North American component manufacturing criteria. All the while, Rivian is constructing another U.S. plant in Georgia.

Market Impact

Rivian’s tactical maneuvers have already shown some good results. Their stock price nudged up from $13.19 to $13.83 by the week’s end, underscored by their shrewd battery-inventory plays. In contrast, giants like General Motors brace for a projected loss of $4 billion to $5 billion in earnings for 2025 due to the same tariff policies, a slide from their earlier hopes of $13.7 billion to $15.7 billion in earnings.

The foresight displayed by Rivian to engage with Gotion could be a game changer, especially in a landscape where Chinese EV components face tariffs as high as 145%. Moreover, Rivian got a stroke of luck when Trump signed another order to prevent stacking multiple tariffs on the same import for automakers with U.S.-based factories. For now, everything points to Rivian’s calculated bet on battery logistics wrapping up in their favor. The real test, though, will be how long they can sustain this lead and if further strategic updates follow.