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Rivian CEO warns of rising vehicle costs due to tariffs

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Lucid expects 8%-15% cost increase, sticks to production

forecast

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Rivian to invest $120 million to relocate suppliers near

Illinois plant

By Akash Sriram, Abhirup Roy, Juby Babu

May 6 (Reuters) -

Electric vehicle makers Rivian and Lucid

warned of higher costs from U.S. tariffs on imported vehicles

and auto parts, even as automakers scramble to rework sourcing

of critical supplies and minimize disruption.

The specter of tariffs comes amid already 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 couple of 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 an already "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, were down 1.4% after the market

close, while shares of Lucid, whose Air sedans start at around

the same price, rose 1.3%.

The Trump administration introduced 25% tariffs on imported

vehicles and auto 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 automakers, including

Tesla, have also said they were reassessing their

full-year targets.

Rivian on Monday said it would invest $120 million 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 gearing up to launch a midsize vehicle as well

with a target price of about $50,000 next year. But 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 U.S., given tariff costs, though that plan was

not final.

A successful rollout of affordable vehicles is seen as

critical for both EV makers.

Both Rivian and Lucid 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 $5.8 billion

software joint venture with Volkswagen, reported a

gross profit of $206 million 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 $1.8 billion and $1.9

billion, as tariffs hurt its plant expansion costs, from between

$1.6 billion and $1.7 billion predicted earlier.