Summary
- LG will supply Rivian with 67 gigawatt-hours of batteries for the R2 model over five years
- The R2 will feature LG’s next-generation cylindrical battery cells from its Arizona plant
- The R2 will use 4695 format cells that are high-nickel and enable higher energy density
- The $45,000 R2 will be the first mass-market EV from Rivian, initially built in Illinois
- LG’s agreement with Rivian is expected to strengthen its presence in the U.S. market and align with U.S. domestic manufacturing efforts and IRA compliance
Article
LG Energy Solution has entered into an agreement with U.S. electric vehicle maker Rivian to supply the next-generation cylindrical battery cells for the Rivian R2 SUV. The batteries will be produced at LG’s plant in Arizona and will power R2 models for the North American market. The agreement spans five years and totals 67 gigawatt-hours in energy capacity. The cells, measuring 46 mm in diameter and 95 mm in length, offer higher energy density, improved space efficiency, and enhanced safety. This move aligns with Rivian’s focus on U.S. domestic manufacturing and compliance with the Inflation Reduction Act.
The $45,000 Rivian R2 will be the company’s first true mass-market EV and could be the model that makes it financially sustainable. Initially, the R2 will be built in Normal, Illinois, alongside other Rivian models. Production of the R2 may eventually shift to a future Georgia plant that would also produce the compact Rivian R3 family, including the R3X hot-hatch, rally-tinged counterpart. Rivian has confirmed that the R2, R3, and R3X will all be built around the same next-generation architecture, using the 4695-format cylindrical cells supplied by LG.
LG does not have exclusive rights to supply cells for the R2 lineup, indicating potential flexibility in cell sourcing. The agreement with Rivian for 4695 batteries is a significant milestone for LG Energy Solution in expanding its client base in the cylindrical battery segment. The partnership is expected to strengthen LG’s presence in the U.S. market and support its response to the Inflation Reduction Act. Rivian anticipates using the Arizona plant for battery production within the first year of production. The move is seen as a strategic step towards expanding into new markets.
The positive impact of the Biden administration’s EV policy and the Inflation Reduction Act is mentioned in reference to the Arizona manufacturing push. The supply agreement with Rivian is expected to strengthen LG Energy Solution’s presence in the U.S. market and support its plans to develop and supply competitive battery cells in a timely manner. Rivian’s focus on U.S. domestic manufacturing aligns with the sourcing of batteries from LG in Arizona. The company reported strong production and delivery numbers in the third quarter of 2024, despite challenges with component shortages.
Rivian’s future models, including the R3 and R3X, are expected to share the same next-generation architecture and cylindrical battery cells from LG. The use of the 4695-format cells will offer high energy density, space efficiency, and safety benefits for Rivian’s upcoming EV lineup. The partnership with LG is a key milestone for both companies in expanding their footprint in the EV market. The Arizona manufacturing plant will play a crucial role in producing batteries for Rivian’s fleet of electric vehicles, supporting the company’s growth and presence in the U.S. electric vehicle market.
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