Rivian to benefit next year as EV battery material prices ease – CFO

(Reuters) – Electric-vehicle maker Rivian Automotive is expected to benefit from a significant deflation in battery material prices later this year and in 2024, according to the company’s finance chief Claire McDonough. The prices of raw materials used in batteries have reached record highs in recent years due to increased demand for EVs and limited supplies exacerbated by the pandemic and Russia’s invasion of Ukraine.

However, there has been a decline in demand for EVs this year, resulting in lower battery prices. Market research firm TrendForce predicts that prices will continue to fall throughout the year. McDonough, speaking at a Goldman Sachs conference, stated that the impact of falling commodity prices will be felt in the fourth quarter of this year and into next year. Lower costs of battery raw materials could potentially aid Rivian and its competitors in improving profit margins, as they have struggled with high costs and diminishing cash reserves.

Rivian, whose shares have already risen approximately 27% this year, is also focusing on increasing the production of its in-house drive unit. This strategic move will help reduce dependence on third-party suppliers, lower costs, and enhance overall production efficiency.

Unlike its competitors who have faced challenges in terms of tough competition, production obstacles, and the impact of Tesla’s price war, Rivian has experienced strong demand and is on track for profitability next year.

According to Akash Sriram in Bengaluru and Abhirup Roy in San Francisco, Rivian’s positive outlook is shaping up due to the combination of falling battery material prices, increased production capacity, and a clear path to profitability. The company’s focus on sustainable and eco-friendly transportation has resonated with consumers and investors alike.

Rivian’s success has also been bolstered by its high-profile partnerships. The company has secured significant investments from firms such as Amazon and Ford, which have demonstrated confidence in Rivian’s innovative electric-vehicle technology and its potential to disrupt the automotive industry.

The future looks promising for Rivian as it continues to capitalize on the growing demand for electric vehicles and takes advantage of the favorable market conditions. With its focus on sustainability, innovation, and production efficiency, Rivian is well-positioned to lead the way in the EV market.

Edited by Sriraj Kalluvila and Timothy Gardner.