Rivian has announced a new partnership with LG Energy Solution to supply battery packs for the upcoming R2. The partnerships aims to localize battery production within the United States, allowing Rivian to streamline production, reduce costs, and capitalize on incentives outlined in the Inflation Reduction Act (IRA).
Announced in the company’s Q3 2024 shareholder letter, the partnership will see R2’s battery packs using LG’s 4695 cylindrical cells, a new format designed for enhanced efficiency and power density. Measuring 46 millimeters in diameter and 95 millimeters in height, these cells are larger than those used in current Rivian models and Tesla’s standard 4680 cells, which means fewer cells are needed to achieve the same or greater capacity.
The five-year supply agreement between Rivian and LG includes 67 gigawatt-hours of 4695 cells, enough to power approximately 650,000 to 700,000 vehicles.
Rivian expects the 4695 cells to lead to a 45% improvement in assembly efficiency due to the reduced cell count, which translates to lower production costs and a simplified manufacturing process. Compared to the current 2170 cells in Rivian’s R1T and R1S, the 4695 cells boast six times the energy capacity, supporting Rivian’s goal of increasing range and power without compromising cost-effectiveness.
Initially, LG will manufacture the cells in South Korea to meet early demand but will shift production to its new Arizona plant within the R2’s first production year. This transition aligns with IRA incentives that encourage US based production, which qualifies EVs like the R2 for federal tax credits.
