LG Energy Solution and Rivian announce battery deal
According to the agreement, LGES will supply 4695 cylindrical battery cells manufactured in the US, “enabling high-quality, advanced battery technology to our vehicles, ensuring long-range and segment-leading performance,” Rivian explains. The supply agreement will last for five years and covers 67 gigawatt hours.
The battery cells will be manufactured at LGES’ plant in Queen Creek, Arizona. That way, Rivian will comply with specifications under the US Inflation Reduction Act (IRA), which would make the EV eligible for the US tax credit of up to $7,500. According to the US Inflation Reduction Act, at least 50 per cent of the vehicle’s battery components had to be manufactured or assembled in North America in 2023. The percentage rises successively to 100 per cent by 2029 by ten percentage points per year. With one exception: For 2024 and 2025, the applicable percentage is 60 per cent.
Rivian also hopes the deal will help it lower the price per kilowatt hour at the pack level. “In addition, the 4695 is a larger cell form factor than R1 which allows for reduced cell count for improved manufacturability. We expect battery pack assembly processing to improve by approximately 45%,” the carmaker states. LGES explains that the 4695 cylindrical battery “features over six times the capacity of the existing 2170 cylindrical batteries.”
As Rivian is not the only OEM interested in the battery technology, LGES expects to become one of the top manufacturers. “Due to the dynamic nature of the current EV market, an increasing number of global automakers are demonstrating a strong preference for a diverse range of battery form factors,” said David Kim, CEO of LG Energy Solution. “This large-scale order from Rivian for 4695 batteries marks a key milestone for LG Energy Solution in expanding its client base within the cylindrical battery segment.”
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