Electric vehicle maker Rivian (RIVN) is investing $120 million to establish a supplier park near its Normal, Illinois, manufacturing plant. With this move, RIVN aims to boost production and reduce costs as it prepares to launch its more affordable R2 SUVs next year. The announcement came just ahead of the company’s Q1 earnings report due today.
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The supplier park will allow Rivian to co-locate key parts makers, ensuring faster and more efficient production. Suppliers will build and assemble parts on-site, which will then be shifted to Rivian’s main plant. Importantly, RIVN expects major cost reductions in shipping, logistics, and warehousing.
This investment is part of Rivian’s efforts to save capital and speed up the production of the R2 SUV. It must be noted that Rivian is making the R2 its top priority, as the company shifts focus to affordable EVs to stay competitive in a slowing market.
Rivian’s Strategy to Offset Trump’s Tariffs
Another key reason behind this move could be tariffs. Rivian aims to cut shipping costs and maintain stable pricing due to pressure from President Trump’s 25% tariffs on EV imports.
Apart from this, Rivian is taking other steps to manage the impact of U.S. tariffs. For instance, Rivian has been stockpiling EV batteries from China and South Korea to protect itself from tariff-induced price hikes.
While these strategies provide short-term relief, tariffs could still increase costs for Rivian’s future models, like the R2 SUV. The R2 will use LG Energy batteries from South Korea, but production will later move to Arizona.
Analysts’ View Ahead of RIVN’s Q1 Earnings
The announcement comes as Rivian prepares to release its first-quarter earnings today.
Currently, analysts expect RIVN to report a loss per share of $0.77, against a loss of $1.24 in the prior-year quarter. Meanwhile, the company’s revenue is expected to decline 17.2% to $997.3 million in the first quarter.
Ahead of the results, Cantor Fitzgerald analyst Andres Sheppard rated RIVN stock a Hold with a $15 price target. The analyst looks forward to Rivian’s Q1 earnings call for updates on its $5.8 billion joint venture with Volkswagen. Also, he awaits insights on Rivian’s plans for the R2 SUV, which is set to start production in early 2026 with a $45,000 price.
Is RIVN a Buy or Sell?
On TipRanks, Rivian stock has a Hold consensus rating based on six Buys, 14 Holds, and four Sells assigned in the last three months. The average RIVN price target of $13.60 suggests a limited upside potential of 0.37% from its current price. Over the past six months, shares of the company have gained about 40%.
