Rare Earth Metals From China Is A Real Challenge – Rivian CEO

RJ Scaringe had an interview with Fox Business recently, where he opened up about the need for more sub-$50,000 EVs and tariffs

Rivian CEO, RJ Scaringe, highlighted that the EV industry heavily relies on the rare earth metals from China, which is why global supply chain is so complex. The latest tariffs from Trump Administration have been a matter of concern for carmakers. Apart from that, the existing policies, which encouraged auto giants to use local components, had already caused carmakers to come up with appropriate solutions.

You might also like: Rivian R1T And R1S EVs Can Be Had With A Practical Rooftop Tent

Rare Earth Metals From China Is A Real Challenge – Rivian CEO

Now, we know that Rivian makes most components of its EVs in the U.S. These include things like the electric motors, software, batteries and other electronics. Nevertheless, there is still dependence on the international supply chain. That is where the concern stems from. China is still a hub when it comes to the processing and mining of rare earth elements. There are trade restrictions on these, which lead to a chokepoint in the EV supply chain.

During his interaction with Fox Business, he remarked, “One of the things with automotive is the supply chain is so complex, where we have hundreds of suppliers providing parts from, say, a headlight or a tow hook or tires or the structure under the skin here that are coming from not only a set of suppliers that supply to us, but those suppliers have suppliers, and then in turn, those suppliers have suppliers, so there’s tier two, tier three. So in our case, it is a mix. Given the new environment from a tariff point of view, we’re working really hard to see what we can change, but they’re difficult to change.“

He continued, “When we think about the tariffs, of course the 25% auto tariff hits everybody,” Rivian’s boss added. “We do rely on a supply chain that across its tiers has a number of components that come from other countries and then, importantly, the trade restrictions and what we’re seeing in terms of rare earth metals out of China, that’s a real challenge for electric vehicles.“

Apart from this topic, he also mentioned that there is a serious lack of compelling options in the sub-$50,000 price bracket when it comes to electric cars. That is a huge gap in the market which it aims to fill with its upcoming R2 and R3. RJ Scaringe even said that while the initial EV adoption phase is over, to sell more EVs going forward, the cars will need to be more affordable and practical.

You might also like: Rivian Owners Can Now Access More Range, Power And New ‘Rally Mode’

Learn Electric Cars Says

Rivian CEO certainly raised some key points which could shape the future of the EV industry going forward. With the tariff war and China’s dominance in the EV supply chain, things could get really complex. Hence, both automobile markets (the U.S. and China) need to tread carefully. On the other hand, the R2 and R3 could engage a lot of new-age buyers once they are launched in that sub-$50,000 space. We shall keep an eye out for more details in this case.