In addition to financial support from Volkswagen, Rivian’s efforts to scale production are also backed by a $6.6 billion loan from the U.S. Department of Energy, which closed in January. This loan is aimed at revitalizing the company’s electric vehicle factory project in Georgia, with production expected to start by 2028.
The company is also investing $120 million in Normal, Illinois, where it is creating a supplier park. This park is intended to be an ecosystem for electric vehicle manufacturing near the plant where Rivian produces the R2 SUV.
However, like other automakers, Rivian faces challenges due to tariffs that increase the cost of automotive parts, especially battery components.
Chief Financial Officer Claire McDonough said in a phone call that the company expects “a direct impact of tariffs per unit in the thousands of dollars in 2025,” based on current tariffs.
Rivian’s main concern is rising costs of battery materials. McDonough noted that the company has sufficient battery inventory to support production through early 2026 but continues to closely monitor export restrictions on rare earth minerals from China.
“We are actively tracking these developments and working to minimize potential risks through various initiatives, including strategic supply assurance and proactive engagement with policymakers,” she added.
The increased cost of components due to tariffs has caused Rivian to raise its capital expenditure forecast to $1.8–1.9 billion. Uncertainty related to economic policy has also led to a revision of the delivery forecast, which is now 40,000–46,000 vehicles, down from the previously announced 46,000–51,000.
Still, Rivian believes the higher production costs may be temporary. The company is working with suppliers, notably LG, to secure domestically produced batteries. A Rivian representative noted that the R2 SUV currently uses 4695-format cells supplied from Korea, but this will change soon.
“We have long been working closely with our partner LG to localize production in the U.S., and starting in 2027 these cells will be made in Arizona,” he said.