Leaders at the electric automaker Rivian said Tuesday they’ve recorded their second straight profitable quarter to start 2025, even as President Trump’s tariffs present “significant uncertainty” and will raise production costs by several thousand dollars per vehicle.
Rivian also cited trade policies and their potential impact on consumer demand in cutting its 2025 delivery outlook — now 46,000 on the high end, down from 51,000 previously.
“We’re also monitoring potential impacts on our production, due to the export restrictions on rare earth materials coming from China,” Rivian chief financial officer Claire McDonough said on Tuesday’s quarterly earnings call with investors. “We’re actively monitoring these developments and working to mitigate potential risk through a variety of initiatives, including strategic sourcing and proactive engagement with policymakers.”
Battery cells are one example. Rivian says it already has on site enough battery cells for production for all of 2025 and into 2026. The new R2 model that begins production next year in Normal will use battery cells from the South Korean company LG. While the first cells will be imported from Korea, Rivian expects those to be made at an LG facility in Arizona starting in 2027.
Rivian has other advantages that may lessen the blow from a protracted trade war with China or other countries, including that 100% of its vehicle manufacturing already takes place in the U.S. Most of its building materials [excluding battery cells] are sourced from the U.S., or from a U.S.-Mexico-Canada Agreement [USMCA] trading partner, said Rivian founder and CEO RJ Scaringe.
Still, it’s not immune from trade disruptions. Rivian is planning for a direct impact from tariffs of “a couple thousand dollars” for each vehicle produced in 2025, McDonough said.
During Tuesday’s call, Scaringe repeatedly said he shares Trump’s ambition to drive more manufacturing to the U.S.
“With thousands of employees in the U.S., and more than 2 million square feet of new construction underway at our Normal campus, Rivian shares the president’s excitement in expanding domestic manufacturing capacity and continued U.S. technology leadership,” he said.
Rivian employs around 8,000 people at its Normal manufacturing plant. It's McLean County's second-largest employer behind State Farm.
Economy’s impact on consumers
Economic concerns also are weighing on consumers, who are increasingly price-sensitive, said Scaringe. Rivian’s current models are not cheap: the R1S SUV starts at $75,900, and the R1T pickup at $69,900. Scaringe said that’s one reason they’re excited to begin production next year on the lower-cost R2 model that will start at $45,000.
“There’s a challenging backdrop from a consumer demand point of view,” Scaringe said. “We have a very high [average selling price], which is a great thing on our flagship product. But by virtue of that, the size of that market is more limited. And in this environment, with the level of uncertainty, it becomes even more constrained in this backdrop. But if we can have a fraction of the success we had with R1 in the much, much bigger market that R2 is operating in, we will be very happy.”
Rivian posted a $206 million positive gross profit during the first quarter of 2025 [January, February and March]. That includes $92 million from the company’s automotive segment and $114 million from the software and services segment.
And success begets success. By meeting a key profitability milestone, Rivian will get a planned $1 billion investment from its Volkswagen joint venture in June. The company has $7.2 billion in cash on hand, and it’s still planning to receive a federal loan of up to $6.6 billion to help build the new plant in Georgia. Construction begins next year.
“This ... is expected to provide the capital to fund Rivian's operations through the ramp of R2 in Normal, as well as R2 and R3 in Georgia supporting our path to positive free cash flow and meaningful scale,” the company said in its shareholder letter.
