Rivian Automotive Inc. (NASDAQ:RIVN) CEO R.J. Scaringe has a raised a red flag over a potential shortage of battery supplies for the electric vehicles, a situation that he declared would be more acute than the ongoing shortage of computer chips.
What Happened: According to a Wall Street Journal report, Scaringe observed that shortages in the raw materials needed for the creation of batteries — including cobalt, lithium and nickel — have the potential of slowing the manufacturing of electric vehicle battery cells
“Put very simply, all the world’s cell production combined represents well under 10% of what we will need in 10 years,” Scaringe said last week during a facility tour with reporters. “Meaning, 90% to 95% of the supply chain does not exist.”
Scaringe predicted the current shortage of semiconductors will be “a small appetizer to what we are about to feel on battery cells over the next two decades.” Last month, Rivian reduced its 2022 factory output in half to 25,000 vehicles based on problems in securing materials and parts for its electric truck and SUV product lines.
See Also: Live Day Trading & Options Trading With Benzinga
What Else Happened: Reuters noted that raw materials now being sourced are becoming increasingly expensive, and Rivian attempted to pass along the new expense to its customers last month by raising its vehicle prices by as much as 20%. However, the company received negative feedback from its customers and Scaringe issued an apology and ordered a reversal of the hiked-up prices.
"We expect pricing to remain pressurized, where it will continue to increase over time," Scaringe said. "We did a poor job of how we rolled that out last time, no doubt. But as we look at going forward, we expect further price increases much like we’ve seen from essentially the entirety of the auto industry."
Photo: Rivian RT-1, courtesy of the company / Wikimedia Commons
