Rivian and Lucid flag increasing costs as Trump tariffs bite

Electric vehicle makers Rivian and Lucid warned of higher costs from US tariffs on imported vehicles and car parts as carmakers scramble to rework sourcing of critical supplies and minimise disruption.

The spectre of tariffs comes amid slowing EV sales as economic uncertainty sours sentiment for consumers, many of whom are avoiding buying cars or choosing cheaper hybrid vehicles instead.

Rivian CEO RJ Scaringe told Reuters the cost per vehicle was expected to rise by "a few thousand dollars" due to tariffs.

"Customers are hesitant to make large dollar purchases, and they're more price sensitive than they historically have been," he said, adding Rivian was working on adjusting its supply chain to mitigate tariff costs.

The EV maker is also anticipating a sharper-than-expected fall in 2025 deliveries to between 40,000 and 46,000 units this year, down from its earlier projection of between 46,000 and 51,000 vehicles.

Lucid's interim CEO Marc Winterhoff said the luxury electric vehicle maker was expecting a rise of 8% to 15% in overall costs due to tariffs, without taking into account any mitigation efforts. Lucid, however, stuck to its production forecast of 20,000 units for the year that Winterhoff said was a "low-balled" target given the rollout of its new SUV, the Gravity.

Shares of Rivian, known for its R1S SUVs and R1T pickups that start at about $70,000 (R1.3m), were down 1.4% after the market close, while shares of Lucid, whose Air sedans start at around the same price, rose 1.3%.

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 (R2.19bn) 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 (R105.51bn) software joint venture with Volkswagen, reported a gross profit of $206m (R3.75bn) 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 (R32.76bn) and $1.9bn (R34.58bn), as tariffs hurt its plant expansion costs, from between $1.6bn (R29.14bn) and $1.7bn (R30.97bn) predicted earlier.