South Korea’s leading battery manufacturer, LG Energy Solution (LGES), announced on Friday a strategic agreement to supply electric vehicle batteries to U.S. automaker Rivian. This collaboration underscores the increasing importance of partnerships in the rapidly expanding electric vehicle (EV) sector.
Under the agreement, LGES is set to deliver advanced 4695 cylindrical cells to Rivian, with a total capacity of 67 GWh over more than five years. The financial specifics of the contract were not disclosed. These batteries will be manufactured at LGES's facility in Arizona and are designated for Rivian's R2 electric SUV model.
Prior to this deal with Rivian, LGES had already established similar agreements with global automotive giants such as Mercedes-Benz and Ford, further cementing its position as a key supplier in the industry. The 4695 cylindrical battery is noted for its larger capacity, improved energy efficiency, and enhanced safety features, which makes it an attractive choice amid growing demand for cylindrical cells.
In a financial update, Rivian reported a revenue of $8.74 billion for the third quarter of 2024, a decline from the $13.37 billion in the prior year. The company produced 13,157 vehicles in the third quarter of 2024 compared to 16,304 vehicles in the same period a year before, with deliveries dropping to 10,018 vehicles from 15,564 vehicles year-over-year.
Rivian’s CEO, RJ Scaringe, highlighted the company’s progress with integrating new technologies into its vehicles and manufacturing processes. He expressed optimism about the upcoming R2 medium SUV, which is anticipated to be a crucial driver of Rivian’s growth.
Despite production challenges due to parts shortages in the Enduro motor systems of its R1 and RCV platforms, Rivian remains optimistic. The company adjusted its 2024 full-year production forecast to 47,000-49,000 vehicles. Nevertheless, it still aims to deliver between 50,500 and 52,000 vehicles during the year.
On the day of announcement, Rivian's stock closed at $10.05, with a market cap of $10.13 billion. The company once held a market value exceeding $100 billion at the beginning of its public trading, reflecting the volatility and dynamic changes within the EV market.