The next-generation batteries of the Rivian R2 will be manufactured in the U.S. by LG Energy.
The cells will be manufactured in Arizona.
Rivian has announced that the R2 vehicles will be powered by batteries manufactured in the United States, specifically by LG Energy Solution from South Korea, according to the company’s third-quarter earnings report. These new battery models were first unveiled in March when the R2 was introduced as a more affordable electric SUV, with a starting price of $45,000. Additionally, the company also introduced the sporty R3 model.
The batteries, referred to as "4695" due to their diameter of 46 millimeters and height of 95 millimeters, are larger than Tesla's 4680 cells. Currently, Rivian uses batteries assembled at its Normal, Illinois factory, which are manufactured in South Korea by Samsung SDI. With this new domestic production, the company aims to better meet the tax credit requirements stipulated in the Inflation Reduction Act. In its letter to shareholders, Rivian specified that the cells will be produced during the first year at LG's plant in Queen Creek, Arizona.
The new battery pack will be lighter, less complex, and more cost-effective to manufacture compared to the current batteries. Rivian anticipates a “significant reduction in cost per kilowatt hour (kWh) at the pack level compared to the R1 platform.” Additionally, being larger than the R1 batteries, the new packs will have fewer cells, which will increase efficiency in the manufacturing process, expected to improve by 45%.
Since the passage of the Inflation Reduction Act, automakers have rushed to relocate electric vehicle battery production to the U.S. in order to qualify for generous subsidies. With the potential return of Donald Trump to the presidency, companies will need to act quickly to avoid high tariffs on imported products, a measure which the new president has promised to implement.
LG Energy Solution also produces batteries for several established automakers. In 2022, the company, in collaboration with General Motors, received a $2.5 billion loan from the Department of Energy to build a new lithium-ion battery manufacturing plant. Rivian has indicated that R2 production will begin in the first half of 2026, although uncertainty remains about how they will survive in a market that could become more challenging, especially if Trump fulfills his promise to eliminate the electric vehicle subsidies implemented by Joe Biden.
