Rivian Automotive Inc (NASDAQ: RIVN) will start using batteries made of lithium-iron-phosphate (LFP) in some of its cars this year as a hedge against rocketing nickel prices, the electric vehicle maker's CEO RJ Scaringe said on Thursday.
What Happened: The EV maker plans to offer LFP batteries in its standard variant vehicles at lower costs before extending it to other commercial platforms and consumer vehicles by late 2023.
“We hope the inflation that nickel pricing (is seeing) very recently is short-lived,” Scaringe told investors on an earnings call, adding that the company was developing a portfolio of battery solutions.
“One of the nice things about having multiple different chemistries across our portfolio is it essentially provides a bit of a hedge around some of the different materials that go into different battery chemistries, in this case, of course, referring to nickel.”
Scaringe said Rivian is sourcing and building its first LFP batteries through a partner.
Nickel prices have zoomed to record highs amid a supply squeeze caused by the Russia-Ukraine war.
See Also: ARK Analyst Sees 'Bad Time' For Inefficient EV Makers That Use Lithium-Ion Batteries: Here's Why
Following Tesla’s Lead: Irvine, California-based Rivian is not the first to make such a switch. Global EV leader Tesla Inc (NASDAQ: TSLA) last year announced a similar move to lower costs and boost profit margins.
LFP batteries have less energy density, need more efficient drivetrains, and do not use nickel as an ingredient. They are less expensive than those with a more nickel-rich composition.
Problems At Hand: Rivian rolled back price hikes earlier this week after widespread online backlash, and is facing a lawsuit from shareholders who have alleged it failed to disclose those plans after going public.
Rivian on Thursday missed analyst estimates for fourth-quarter revenue and profit. The company said it produced 1,410 vehicles in 2022 and 2,425 since production began.
Price Action: Rivian stock closed 6.35% lower at $41.2 a share on Thursday and fell 12.7% in extended trading.
Photo courtesy: Rivian
