Tariffs on R2 ? [ADMIN WARNING: NO POLITICS; POLICY DISCUSSION ONLY]

[Florida Panhandler]

With import tariffs seemingly inevitable what is the effect going to be on the upcoming R2 line? Assembly in the US, but important components certainly coming from China and possibly the main battery as well. This would add significant pressure on the MSRP and it would seem all hope of anything below $55k is right out the window. I hope I am wrong but at this point it may be the case that the R2 becoming the mainstream hit is looking more grim. That $50k barrier IMO is critical at least from a psychological view.

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[Killer95Stang]

Way to early to know what is going to happen.

 

[electruck]

The impact won't be just to Rivian or even just EVs. The price of many ICE vehicles as well as consumer goods could go up. We'll just have to wait and see how things play out.

 

[Hereforthesnacks]

No one knows what will or will not happen. No point in giving it too much thought until we see if any levies are in place.

 

[Donald Stanfield]

No point in speculating yet. There are far too many different scenarios that could play out to even worry about this right now.

 

[DuoRivians]

I believe RJ said a very high % of components are from the U.S., including battery pack. They made this decision knowing what could happen in the future—smart in hindsight

 

[André]

I could also add another scenario where Rivian has to shut down its operations in Canada as we could respond to US tariffs by imposing our own tax on US imports... this is insane.

 

[R1Tom]

These threats are likely only negotiation tactics and end results will be significantly less than the current threat level.

 

[dleepnw]

Too soon to know but depending on how it plays out it will have an impact. Rivian can't seem to catch a break. First it was the pandemic with the R1, now tariffs with the R2.

 

[Dark-Fx]

Everyone's going to be too poor to afford them after buying their basic necessities.

 

[TexasBob]

Companies are pretty good at avoiding tariffs. We have seen this play out in Solar over the past six years. Chinese solar companies have relocated production to places like Viet Nam to avoid do an end-run around things.

At my own company, I am finalizing a buildout of a manufacturing expansion at our facility in India next month so I can export from there to China because I know that China will retaliate and impose tariffs on our US-made products (which will now become India-made products). I just cancelled a Texas construction project that was going to stretch into 2Q because 60% of Texas construction workers are undocumented immigrants and I cannot eat the cost and delays associated with a labor shortage. People adjust, everyone is poorer. Rivian and its suppliers are, I am sure, already making adjustments just like we are. It won't fix everything but it will moderate the impact.

 

[UnsungZero_OldTimeAdMan]

Can we all just stop with the moot speculations? Have some trust that the smart people at Rivian have already been dealing with the situation? Long before any one of us have had a brain fart over it? I mean it's their jobs. They live and breathe it every single day.

If you want make better use of the time/energy, learn how dumb and ineffective tariffs are in general. It's political grandstanding, at the expense of gullible voters/workers who are also consumers (who end up paying the price). WSJ had an enlightened podcast episode on it. Businesses in China have been dodging tariffs for as long as tariffs existed.

https://www.wsj.com/podcasts/the-jo...r-battle/e7ec789a-8b70-43b0-94de-5ea2a6e0bc9c

 

[Kidentist]

 

[edman007]

The IRA really signaled to many industries, especially the auto industry, that they need to get the hell out of China.

I really think Rivian has a big focus on getting their stuff out of China, and they've been working this for a while now. With the R2 still being a ways away from production, I think Rivian has time to find suppliers that will work to avoid most of these tariffs. Also, they won't affect just Rivian, in fact, the R2 being all new, and the fact that it's not replacing anything at Rivian, I think they have a lot of room to find those new suppliers, they are not really bound to existing suppliers the way some legacy automakers might be.

So this is NOT news to Rivian, they are working on it.

 

[Oldsmobile_Mike]

Everyone's going to be too poor to afford them after buying their basic necessities.

I'm in this camp, also. All we can do is hope it won't be so bad as some predict.

At my own company, I am finalizing a buildout of a manufacturing expansion at our facility in India next month so I can export from there to China because I know that China will retaliate and impose tariffs on our US-made products (which will now become India-made products). I just cancelled a Texas construction project that was going to stretch into 2Q because 60% of Texas construction workers are undocumented immigrants and I cannot eat the cost and delays associated with a labor shortage. People adjust, everyone is poorer. Rivian and its suppliers are, I am sure, already making adjustments just like we are. It won't fix everything but it will moderate the impact.

Thank you for sharing. This is valuable insight. I would hope someone in Texas realizes this is potentially going to cost them business, but they're probably all too busy cackling over an already marginalized population getting treated worse. ?

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