Rivian will launch a new simplified battery pack format that is cheaper and lighter than the Standard pack. Chief Financial Officer Claire McDonough revealed in an interview with Barclays’ Dan Levy that the next-gen R1 EVs will utilize the new battery.
Plan details
According to CFO Claire McDonough, Rivian is currently developing a simplified battery pack for R1 electric vehicles.
CFO McDonough shared some of Rivian’s existing and planned new technologies that will substantially cut production costs, Electrek noted. The executive also expects future developments to aid the company’s efforts to achieve gross margin profitability.
She also revealed during the interview that the Standard battery pack will reach customers as early as next year.
“We’re introducing our Standard battery pack in R1 and that allows us to open up a larger addressable market of consumers for R1 vehicles, given that it’s at a starting selling price in the low $70,000 area. So that’s another important new technology we’ll be introducing into R1 that’s not available today.”
Chief Financial Officer Claire McDonough
In addition, she declared plans to launch the new battery tech that will simplify the battery’s module layout to ensure cost-efficiency.
“And then we’re introducing a new battery as well, for the R1 vehicles. That very heavily simplifies the battery pack and module structure that we will be building and takes thousands of dollars of costs out, additional mass out, is much easier to manufacturer and build as well, within the vehicles. So that’s another example of some of the new technologies that will be coming into place next year that is a key enabler for the operational efficiency, including cost efficiency, that will get unlocked with these introductions.”
Chief Financial Officer Claire McDonough
Rivian’s progress
Electrek noted that Rivian is among the few electric vehicle startups gaining traction in the third quarter. It is indeed remarkable, considering the lingering effects of the supply chain and demand issues over the year.
Rivian’s Q3 2023 report delivered higher-than-expected production results owing to the increasing demand from US buyers.
In effect, the electric automaker successfully retained its set price points while grasping sales to accelerate EDVs and R1 EVs production at its Normal factory in Illinois.
Both models remain contribution margin positive, with the CFO aiming to become gross margin positive next year.
Potential benefits
Rivian’s planned new battery technology will offer a wider pool of customers for the R1S and R1T models.
The upcoming simplified battery pack may aid Rivian in reducing the R1 EVs’ base price under the $70,000 mark.
The models will also benefit from the US $7,500 federal tax credit, which can further lower the models’ base price to about $60,000.
As mentioned, all these will be possible with Rivian’s strategy to streamline the battery structure to make it easier to manufacture. It is also worth noting that the automaker will suspend assembly lines for several weeks in Q2 2024 as part of the preparation for the launch of the new batteries.
Rivian’s battery technology strategy aligns with the top key aspects of the electric vehicle industry, namely affordability and innovation. It will give the company a significant edge, considering the expected market saturation in the coming years.
