07-05-2025
Rivian and Lucid flag increasing costs as Trump tariffs bite
US President Donald Trump's administration introduced 25% tariffs on imported vehicles and car parts. Last week, Trump signed two orders to soften the blow, with a mix of credits and relief from other levies on materials.
In the face of uncertainty, several carmakers, including Tesla, have also said they were reassessing their full-year targets.
Rivian on Monday said it would invest $120m (R2,182,770) to bring its key parts suppliers near its plant in Illinois as it prepares to produce its smaller, more affordable R2 SUVs next year.
Lucid is also gearing up to launch a midsize vehicle with a target price of about $50,000 (R909,487) next year. However, Winterhoff said Lucid might start production of the vehicle in Saudi Arabia, a major market for and an investor in the EV maker, instead of the US, given tariff costs, though that plan was not final.
A successful rollout of affordable vehicles is seen as critical for the two EV makers.
Lucid and Rivian reported smaller-than-expected losses on an earnings-per-share basis in the first quarter as they doubled down on slashing costs.
Rivian, which is also benefiting from a $5.8bn (R105,509,256,960) software joint venture with Volkswagen, reported a gross profit of $206m (R3,747,356,155) and stuck to its target of modest gross profit this year.
The company, however, increased its forecast for capital expenditures for the year to between $1.8bn (R32,763,777,480) and $1.9bn (R34,583,990,000), as tariffs hurt its plant expansion costs, from between $1.6bn (R29,138,640,000) and $1.7bn (R30,966,604,320) predicted earlier.
