Rivian Teams Up with LG for US-Made Batteries in Affordable R2 Electric SUV
Rivian Announces US-Made Batteries for R2 Electric SUV
Rivian, the electric vehicle manufacturer, has revealed that its upcoming R2 electric SUV will be powered by domestically produced batteries in the United States. The company has partnered with LG Energy Solution to manufacture the new battery cells, named “4695,” which are larger than Tesla’s 4680 cells.
The R2, Rivian’s more affordable electric SUV with a starting price of $45,000, along with its sportier counterpart, the R3, will benefit from this new battery technology. This move marks a significant shift from Rivian’s current battery production strategy for its R1T and R1S models, which relies on cells imported from Samsung SDI in South Korea.
The transition to US-based battery production aligns with the tax credit requirements outlined in the Inflation Reduction Act. Initial production of the new cells will take place at LG’s plant in Queen Creek, Arizona.
Rivian’s next-generation battery pack is designed to be lighter, less complex, and more cost-effective to produce. The company anticipates a substantial reduction in cost per kilowatt hour (kWh) at the pack level compared to its R1 platform. The larger size of the new packs is expected to reduce the number of cells needed, improving manufacturing efficiency by 45%.
This development comes amid a broader industry trend of automakers shifting EV battery production to the United States to comply with domestic production rules for subsidies. The potential for policy changes under a future administration has added urgency to these efforts, with concerns about possible tariffs on imported goods.
LG Energy Solution, which also supplies batteries to legacy automakers, is playing a crucial role in this transition. The company recently received a $2.5 billion loan from the Department of Energy for a new lithium-ion battery facility in a joint venture with General Motors.
Rivian plans to begin R2 production in the first half of 2026. However, market uncertainty looms, with concerns about the potential elimination of EV subsidies raising questions about the viability of EV-only companies like Rivian in a changing market landscape.
As the electric vehicle industry continues to evolve, Rivian’s move towards domestic battery production represents a significant step in securing its supply chain and meeting regulatory requirements in the competitive EV market.
