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Rivian CEO: You thought the chip shortage was bad?

The auto industry is already dealing with a semiconductor supply crunch. The EV battery supply shortage might be even worse.

A Rivian truck in New York City

Rivian's CEO foresees big trouble coming for the EV battery supply chain.

Photo: Bing Guan/Bloomberg via Getty Images

The ongoing global chip crunch has made consumer electronics tougher to track down. The electric vehicle industry faces a similar conundrum, but instead of semiconductors, companies are staring down a shortage of materials to make batteries. Rivian CEO RJ Scaringe predicted that the supply of EV batteries would become a huge issue in years to come.

The chip crunch, Scaringe said, would look like a "small appetizer to what we are about to feel on battery cells over the next two decades," according to the Wall Street Journal.


While giving press a tour of the company's factory in Normal, Illinois, last week, Scaringe said that building enough batteries to keep up with demand for EVs would be a major hurdle for the industry. He anticipates shortages in every part of the battery building process, including mining raw materials like cobalt, lithium and nickel, processing materials and building the battery cells themselves.

“Put very simply, all the world’s cell production combined represents well under 10% of what we will need in 10 years,” Scaringe told reporters, according to the WSJ. “Meaning, 90% to 95% of the supply chain does not exist."

Rivian has had a rocky start to the year. The company raised prices on its R1T electric pickup truck and R1S electric SUV in early March, even for those who had places early reservations, citing inflation and the high cost of materials. The company reversed that plan after massive outcry from customers. Rivian in March also cut its production outlook in half to 25,000 vehicles, which it attributed to supply chain issues.

Car companies already dealing with a shortage of automotive sensors due to the chip crunch are now exploring ways to boost battery supply. Scaringe said Rivian is considering adding in-house battery production to diversify its supply.

“We are not going to have a single supplier,” he told the WSJ. “We are going to have multiple suppliers.”

Rivian also isn't the only EV maker feeling the squeeze of inflation. Tesla also increased prices by 5-10% across its entire lineup due to the surging cost of nickel and other materials. If battery supply issues persist, car buyers who want to make the jump to EVs may face even higher costs.

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