Carmakers are having to resort to innovative strategies to navigate through the tariffs announced by Donald Trump
In a rather creative measure, Rivian was able to secure EV batteries in huge quantities from China just ahead of the elections to offset tariffs. This has resulted in it creating a buffer to bypass tariffs to a large extent. Essentially, it will lend the EV startup some time before it will need to increase the price of its products. That has to be one of the smartest decisions from Rivian.
You might also like: Rare Earth Metals From China Is A Real Challenge – Rivian CEO
Rivian Bought EV Batteries From China To Beat Tariffs
As per a Bloomberg report, Rivian imported huge volumes of Lithium Iron Phosphate (LFP) cells from China’s Gotion High-Tech Co. ahead of the U.S. elections. These power the Amazon-bound delivery vans. Thereafter, to ensure an uninterrupted production of the R1T and R1S, it struck a deal with Samsung SDI to import considerable amounts of battery cells from South Korea.
Remember, Samsung SDI mentioned a week ago that the tariff war would make it more expensive to build EVs. In such a scenario, having the buffer to not raise prices could become extremely crucial and work in favor of Rivian. At a time when the company is chasing profitability, this can prove to be a pertinent junction.
We know that Rivian is prepping the launch of R2, its mass market compact electric SUV. With this EV, it also plans to switch to 4695-format cells from LG Energy Solution. While the initial production will occur in Korea, Rivian wants to move operations to LG’s new Arizona facility in Queen Creek. This will help it align better with the Inflation Reduction Act’s requirements.
You might also like: Rivian R1T And R1S EVs Can Be Had With A Practical Rooftop Tent
Learn Electric Cars Says
The tariff war has genuinely resulted in a challenging situation for carmakers. They were already struggling with depleting demand. However, as the demand began to rise, the tariff war shook up economies all across the globe. We can only wait and watch how things evolve in the coming weeks.