Rivian Partners with LG Energy Solution for Battery Supply
- Rivian has entered into a significant five-year battery supply agreement with LG Energy Solution in Arizona, as announced recently.
- This partnership aims to lower battery sourcing and production costs, reduce battery weight, enhance energy storage, and boost battery pack assembly efficiency by 45%.
- The new cylindrical batteries produced by LG will be incorporated into Rivian’s upcoming R2 model, expected to launch in North America in early 2026.
Insights from Rivian’s CEO
During a recent meeting with analysts, Rivian’s CEO, R.J. Scaringe, shared that the partnership with LG Energy Solution has been in the works for a considerable time. He believes this agreement will lead to reduced costs and improved component sourcing for Rivian.
Scaringe explained that Rivian will utilize a cylindrical battery cell design, measuring 46 millimeters in diameter and 95 millimeters in height. This unique battery design will serve as an integral part of the vehicle’s structure, with the top of the battery pack forming the vehicle’s floor.
The integration of the battery into the R2’s design is part of Rivian’s strategy to cut costs while aiming to keep the starting price of the new vehicle at $45,000. Additionally, producing batteries in the U.S. aligns with the standards set by the Inflation Reduction Act, helping the R2 qualify for EV tax incentives.
Scaringe emphasized that these types of strategic decisions are crucial for enhancing cost efficiency across the R2 program.
Benefits for LG Energy Solution
The agreement also benefits LG Energy Solution, as it solidifies their presence in the U.S. market. The company is currently building a new plant in Arizona to produce these batteries, with operations expected to start in late 2025. Batteries produced at this site will be shipped to Rivian’s plant in Normal, Illinois for installation in the R2 model.
David Kim, CEO of LG Energy Solution, remarked that this large order for cylindrical batteries is a significant milestone for the company, broadening their client base.
Despite challenges in the automotive sector, including a slowdown in demand for EVs, companies like LG Energy Solution are adjusting their technologies and manufacturing processes to meet the evolving market needs. Recently, LG Energy Solution also secured a long-term battery supply agreement with Ford for the European market, further demonstrating their strategic expansion.
Kim noted that as the EV market shifts, there is a growing reliance on a variety of battery designs among global automakers.