Rivian's CEO on Elon's Influence, The Plan For Profitability, And The Grid’s Risky Future
A conversation with RJ Scaringe about the future of electric cars, Rivian’s $5.8 billion deal with the Volkswagen Group, and why we need to end the era of fossil fuel.
Electric automaker Rivian is living a wild life. It’s built a beloved electric pickup and SUV, it’s losing mountains of money as it attempts to reach profitability, it’s just announced a major $5.8 billion partnership with Volkswagen Group, and its largest competitor’s CEO is now “First Buddy” to the incoming Trump administration. To say the company’s existence is dynamic would be an understatement.
In this week’s edition of Big Technology Podcast, I spoke with Rivian CEO RJ Scaringe about how the company is handling all this. We discussed Elon Musk’s influence, Rivian’s plan to straighten out its supply chain and get profitable, how the VW partnership might help, and where the grid is heading as the climate crisis rolls forward. I enjoyed the discussion and hope you will as well.
You can listen to the full podcast today on Apple Podcasts, Spotify, or your app of choice, or read it here. This interview has been edited lightly for clarity and length.
Alex Kantrowitz: Since we spoke last, Elon Musk endorsed Donald Trump. Trump won, and Musk’s been so intimately involved in the transition he's being called the First Buddy. On a personal level, is that a bit surreal to you?
RJ Scaringe: I think the broader state of just how politicized electric vehicles have become is a bit surprising. I think Tesla and Elon, having a relationship with President Trump is actually helpful to electrification. It's certainly going to provide the perspective of the importance of EVs. I look at that as a positive.
But is Musk and Trump's relationship something you anticipated?
I wouldn't have expected that. It's not on the list of things I would have predicted a year ago but again — it's electrification — the drive towards sustainable energy. Unfortunately, this is a political issue. It should not be. This is a human issue. Having folks that are pro-EVs on both sides of the aisle, that's the important thing. Elon taking that role could be helpful.
If you were the “First Buddy,” what would be some EV friendly policy that you'd want to put forth?
What I truly and deeply believe is best for the world is that we need to have multiple choices as a consumer. So that means lots of different companies building highly compelling products. Those products need to give customers choice, which is ultimately what's going to drive us from sub-10% EV adoption to 100% EV adoption.
The mechanisms to help drive that are both the carrots and the sticks. The carrots are typically consumer facing. We’ve had a $7,500 tax credit—that's consumers facing. The sticks, or ‘forcing mechanisms’— the fines that manufacturers have to pay if they're not building vehicles that hit certain greenhouse gas emission standards or hit certain levels of electrification zero emission vehicle credits.
The credits are helpful in that they don't cost the government anything, so we actually sell our excess credits to other manufacturers. So it becomes a cost to manufacturers and a source of income for those that are building more efficient vehicles. And you have Tesla, of course, is the biggest player in the credit space, just by virtue of them being the largest builder of electric vehicles.
And it’s all margin for them, it was a part of their big earnings.
Yeah, us as well, and it’s great. It’s all margin.
We sell the credits to other manufacturers. The credits are actually a helpful way to help direct investment within the manufacturers and ensure that when 2030 rolls around, there'll be multiple companies that have made the investments, and made the commitment to electrification.
So I think any rollback, may help car companies in the short term. But in the long term, car companies that back off their electrification strategies are going to find themselves in a really challenged position as it gets out to 2030, and beyond, where the pure play folks like us or Tesla have no other choice but to become cost effective at building really compelling products.
If I had to predict what's going to happen, I think we're going to probably see changes in both those categories. It's hard to say exactly what but I do think mechanisms that help drive towards the future state are important.
It seems like the identity of a Tesla owner is a little bit in flux. Maybe you support environmentalism, maybe you’re pro-Elon and you want to be on board with the MAGA train. What does driving a Rivian say about you?
I love that question. I think it's easy sometimes to confuse an attribute of the product— let's say acceleration or off-road capability, with the emotional representation of what the brand stands for.
One of the key words we think about is inviting, in the sense as a brand, as a company, we want to invite people into electrification. We want to invite people into new technology from all walks of life. We're not trying to invite just one side of the political spectrum or the other, but trying to make it such that it's equally appealing, and you've seen some of that emerge in our communities, which are very active.
We have one of the most active user bases, where our customers engage with each other. They go on trips, they explore, they see things together. They see new parts of the world together in a way that we dreamed about back in 2020.
We would have presentations, and we'd say, “Boy, if we do this really well, and create a product and a brand that—invites people to explore, to go do the kinds of things they want, to take photographs of— it’s going to span age demographics, political beliefs, and religious beliefs.” And we're witnessing it, so I go to some of these Rivian gatherings, and it is a beautiful melting pot of different backgrounds, perspectives, and political views.
What I’m hearing from you is that you’re not just going to take this moment and say we’re going to politicize it. Basically what you’re describing as a car buyer is the person that’s going to buy the Rivian.
I think a lot of our customers lean more towards caring about sustainability in different ways but the thing is we don’t want to try to drive a fork between people because of that.
I’m noticing, though, that someone who drives a Rivian today has to be well off. The cars start at around $70,000 and you have to have some money to be able to do that. But looking ahead, you’re developing vehicles that are going to cost in the $45,000 to $50,000 range in 2026. So can you describe the state of the product line that you have today and that you’re working towards?
I'm glad you talked about the launch product — it was a flagship. It's a sibling set truck and SUV. As you said, the starting price is around $70,000, and the average transaction price is closer to $90,000 on average.
These are expensive vehicles but fun to drive. You don’t feel like you’re driving as big of a car as you are. And when you finally hit the accelerator, it really gives it a go.
Yeah, in that premium segment, if you think of vehicles priced over $70,000, the R1 product line has been extremely successful. It’s actually the best selling premium SUV in the state of California—not the best selling premium electric SUV— the best selling premium SUV, period, in California across the whole us. It's the best selling premium electric vehicle.
The product and brand have really resonated with folks that can afford it. And we've seen a really broad cross section of buyers, so people that are trading in everything from high performance sports cars to off road vehicles to Teslas to pick ups. It’s a really nice broad funnel of interest we've drawn in.
The goal with the lower price product is to take that market share success that we've had and apply it to a much larger audience— the price point that the R2 starts at 45 and the R3 starts considerably lower than that.
What's considerably lower than that?
We haven't announced yet, but meaningfully lower. Of course, the goal is to continue to make the brand, the products and our company, accessible to more and more people.
The reason we started at the high end is because we wanted to have a product that had enough price that allowed us to scale, build capabilities, and then put us in a position to then launch a very high volume product with a lot more capacity, much more built out supply chain for our next product.
Now you're starting a joint venture with Volkswagen Group which just closed last week. It's a $5.8 billion deal. You mentioned earlier that you want there to be lots of EVs available in all different types of models. The VW Group has Audi and Porsche and VW. Is this a way to electrify these brands?
The reason I started Rivian was to have as much impact as possible and to help drive and accelerate the transition to renewable energy and sustainable transportation. So the opportunity to take our technology and help the Volkswagen Group create products that are highly compelling and that will pull more customers in across a variety of different form factors, price points, brands, markets across the planet was really enticing and exciting.
The technology we developed is really strong, and there's really only two companies in the world that have this level of vertical integration and architecture that's used hardware consolidation to massively simplify the topology of computers— us and Tesla.
So Volkswagen has really leaned in with us and the $5.8 billion deal reflects the scale of it. I think it's not fully appreciated how big of a commitment this is, beyond the capital, from Volkswagen to build architectural dependency around our hardware stacks— that's the ECUs and compute platforms, and then the software platforms that we built across their whole brand portfolio.
Does that mean the Porsche is going to have Rivian electrification and battery within it?
No. So the deal is just for our computer architecture, what we call ECUs—electronic control units—and the software that runs on them. It doesn't include batteries, drive train, autonomy, or vehicle platforms.
You have an autonomy program? Last time we spoke, it didn’t seem like you were pursuing that path.
If you're serious about being a player in automotive, it's not like a choice, it's so fundamental to the future of transportation. We just launched a gen two vehicle and this was a big effort, but we completely re-mapped our platform.
We brought everything in house; We have 55 megapixels cameras on our vehicle. It's the largest number of megapixels outside of China. We have five radars, and a very powerful compute platform. And the beauty of what's happening in autonomy is it requires a closed loop, like a heavy flywheel of data— where your data coming in off the vehicles, you see unique incidents or unique events, and use that to train the model. We've designed that entire data pipeline to allow a really robust layer of training. Of course that training takes a lot of H100s, and it's a lot of compute, but that's what we're building.
But are you pushing towards full autonomy, or is this partial?
Today, if you get into a Rivian and put it on the highway, it will drive itself on the highway. It can change lanes in the highway, but when you leave the highway, you retake control. What will happen for us is we'll continue to grow and expand the number of roads and the types of roads that the vehicle can operate on.
It’s fascinating that that’s where you’re aiming.
Okay, so back to VW— you’re going to be providing all the computer work for their cars, so are they just going to replace what they have in there, or use ingredients of it? If I’m driving a Porsche, am I going to be on the Rivian system?
Yeah, so let me first describe how, with the exception of us and Tesla, what a vehicle network architecture looks like. It's useful to have a bit of history on it. If you go back to the early 1960s cars didn't have computers in them. They were completely mechanical; Any controls in them were analog.
One of the first sets of electronic control units to make its way into a vehicle was for fuel injection systems—somewhat ironically—and those fuel injection systems were controlled with these little computers. Those little computers were built by companies like Bosch, and that began the slow process of seeing computers increasingly get used across the vehicle.
As that happened, we went from let’s say: a computer controlling the fuel injection system to 50-100 small little computers placed throughout the vehicle that are all supporting some specific function. Maybe it's a computer to raise the lower windows, maybe it's a computer to control the seat settings, maybe it's a computer to adjust the climate control or the air conditioning system. But we basically witnessed this massive proliferation of a highly disorganized, highly function based computer architecture and all those computers are developed by tier one suppliers. Those tier one suppliers write the software on them, and as a result, it's very hard to make an update to very simple things.
For example, the sequence of what happens when you walk up to the car and it unlocks. You have an antenna that's controlling communications with the car. You have the door unlock mechanism, which is another computer. You have the seat adjustment for making it easier in and out another computer. You have the lighting, which is another computer. You probably have something that's emitting some sound —like 10 computers— that just do the open and close sequence for the car. To make a change to that experience requires several suppliers to coordinate a software update and it's an absolutely fundamentally flawed and wrong architecture.
So what you'd want to do is consolidate the number of computers down and have a number of zonal based, or geographically-based, computers— these things are called zonal architectures. That's what we've developed, and it's much cheaper, because you cut out 90-95% of the computers in the car, you have a much smaller number of more powerful computers, and they do a lot of things. That's what we've built.
To your question: if you're driving a Porsche or an Audi in a few years from now, it will have Rivian computers in it, and those Rivian computers will be running Rivian software, but the way it drives, how it looks on the screen, that'll be specific to the brand.
Have you talked about also doing a deal that puts some of your electrification in their vehicles?
Well, there's lots of ways we could expand the deal beyond electronics, but we haven’t said anything publicly. I’d say this. We've had all kinds of conversations with different manufacturers over the years, and I couldn't be more excited about the potential of what we're building with the Volkswagen Group across their brands.
What do you get from VW Group outside of money?
One of the challenges that we have in building and growing our businesses is sourcing scale. If you imagine negotiating a processor for R1 and R2 volume, you can get a certain level of volume. If that same chip set is being used across Porsche, Audi, Volkswagen, Bentley, Skoda— a handful of brands with much higher volumes — you can really accomplish advantage pricing. On a lot of the core platform that we're building, this is what we've done in setting up the joint venture to develop some of these core building blocks that can have the benefit of sharing the development costs across many different products. It makes a lot of economic sense, or industrial logic sense, to have one platform in terms of software and electronic that can be applied to many different brands, portfolios, and vehicles
It seems to me like it would make a lot of sense to just merge these two companies. Why is it important to you to stay independent?
The way I look at it is: we're building a company that designs and develops vehicles, but we also have a huge technology focus, As demonstrated by this deal, we're selling technology. We have a clear business line that's in addition to just the vehicles themselves.
But there are also business challenges. Rivian’s had multiple quarters of billion dollar losses. How sustainable is that? And how do you plan to flip that?
There's two things to think about here. The first is R&D expense that’s necessary to build the business we're building, and to be world class and leading in terms of technology. So that means there's a caloric burn of the number of people necessarily developing that much technology.
Today, it's outsized relative to our scale, because we're not developing all this technology just to sell two premium products, We plan to sell many millions of vehicles a year. But we have to grow into that, so there's a heavy investment. Call it a forward investment in technology, which has always been the plan.
Similarly, we also need to build ahead on service and go-to-market. Infrastructure and service, in particular, takes a ton of money in the beginning to build. It's lots of brick and mortar sites, lots of training of teams. In the beginning, it's all cost —it's all OPEX— but over time, it actually becomes very profitable. And once it's profitable, it becomes a wonderful tailwind. Tesla is a great example. That's one of the big tailwinds they have: a great, highly profitable service arm.
Can I just say two things? First of all, the company's 15 years old, so how much investment is there going to be until it starts to pay off in profitability? Secondly, on the service part, one of the things I hear from Rivian owners is that it's quite expensive to repair the car. Is that something that you're planning to address in the future?
Regarding the cost of a service event, It's always highly circumstantial and idiosyncratic. There are certainly some repairs that are more expensive for us, by virtue of us not having a lot of service infrastructure in place. If you break down in the middle of nowhere or are in an accident that's very far from Rivian location, just because there's no infrastructure there to support it, it’s more expensive, and that's one of the reasons we have to go build that out.
Fortunately, for our customers, that gets covered through our warranty. So the warranty period is something we have to eat — the greater cost of being 100 miles from a service location, but that's being solved really quickly because of how fast we're building the infrastructure.
But to come back to the broader question, which is when do we start to make money? A really core part of this is getting our cost of goods sold to be meaningfully below what we're selling our vehicles for. And this is a hard number to fully appreciate: the fixed cost versus the variable cost aspect.
Our CFO and I try to talk to this a lot in earnings calls, but just the baseline of running a plant, a supply chain, the infrastructure to support that means that you need a certain level of volume just to cover those fixed costs. The plant that we've set up in Illinois, our Normal plant, will have 215,000 units of capacity, and we're using a small fraction of that today, so there's a fixed cost disadvantage. Or you might say, like there's a lack of fixed cost absorption that's happening, which has a compounding challenge in the short term. But even with that, we have a pathway before the launch of R2 to start to demonstrate the profitability of the business and key to this is taking the bill of material costs for the parts down.
Just to give you a little history on that, what's been really challenging is all of our bills of materials for what we launched with were negotiated in 2018-2019, before we had put any vehicles on the road when very few people even knew what a Rivian was. We didn't have a plant, the auto industry was at peak volume, so suppliers weren't really eager to take on the risk of a new company. So we had to just get parts; We had to pay a significant – what I'd characterize as a risk premium and we rationalized it by saying, “Well, to launch, we have to just sort of hold our nose and take the fact that we can't negotiate any better pricing today.”
The logic was, once we launched, the success of the product will allow us to renegotiate those rates down. What we didn't predict was COVID hitting in 2020 and then launching in 2021 when the supply chain was a disaster going through one of the worst crises in the history of a supply chain. So not only did we not get to negotiate pricing down, but we had to battle to not get the pricing to go up too much. And there were new premiums on top of the other premiums. So it was just an absolute bare knuckle fight.
Hindsight is 20-20, but one of the challenges that compounded all of that is we launched all three products at the same time. We launched a truck, an SUV and a van, all at once. So we had three supply chains, thousands of parts, hundreds of different suppliers that were just trying to manage, all of which were asking us for more money.
Fast forward to today, we had a major shutdown of the plant— intentionally. We replaced about half the bill of materials with new suppliers, and we now have a much healthier supply chain. We're going to start to see that in Q4 where we've negotiated more than 20% savings just between Q1 and Q4 of this year, out of our bill of materials. We're going to continue to see those savings come in over the course of 2025, and even into 2026.
I've never been more confident in the business.
I was just watching one of your interviews with the New York Times where David Gelles brought that Elon Musk made suggested you guys would be bankrupt within six quarters, and you kind of threw up your hands. Suffice it to say, you'll be around to ship the R2 in 2026?
Just look at the numbers. We've got just under $7 billion in cash and, with the Volkswagen deal, another $5.8 billion coming in. There's a few additional tranches of capital coming in. Actually, the last tranche is actually the billion dollars in debt. We take equity and then licensing fees first. What we've guided to publicly and have communicated to shareholders and analysts is: it’s not only enough capital to launch R2 in Normal, but it's enough capital to launch our second R2 plant in Georgia and take us through positive free cash flow.
In that interview, you also mentioned that the grid today is 60% fossil fuel, 40% renewable and nuclear. Do you think the timeline that we're on to get the gains from electrification is sufficient? United Nations Secretary-General António Guterres said the climate crisis passed the point of no return in 2022. So what do you think about this? Because if we're beyond the point of no return, why am I going to buy an EV versus an internal internal combustion engine. Does it matter?
We, as society, have built a certain style of living, and we’ve built this massive base of technology and the whole fabric of an industrial ecosystem over the last 150 years has built around fossil fuels. It's allowed for you and I to do what we're doing here, to be in different places, in different locations, having a conversation, among many other things. But it's come off the back of fossil fuels. And so while our parents, grandparents and great grandparents are the generations that built this world. Our generation — and maybe the next generation — has the responsibility of completely rebuilding it in a way that doesn't require or run on fossil fuels.
We can debate how much supply of fossil fuels we have left, but it's indisputable that it's a finite resource, meaning there's not an infinitely deep well of oil or deep mine of coal. You could argue it’ll be in 100—maybe 125— years, but we will absolutely, without changing our behaviors, run out of fossil fuels. So we have to make the change. If I want my kids’ kids’ kids to live a life like we live, it's not a choice. It’s truly, fully 100% indisputable, that we have to move off of it.
The philosophical view that I carry is, moving off of it later and saying, “oh, we'll let the next generation deal with this, or just we'll run out of it and run into a brick wall, and then the lights will go off.” — that mentality is just loading up the risk on the planet.
We're taking hundreds and hundreds of millions of years of atmospheric evolution, where we saw all this carbon sequestered out of the atmosphere, put into plants. Those plants got buried in the crust of the earth. Those plants over hundreds of millions years, converted to oil and coal. We're reversing it really quickly, the difference in timescales is orders of magnitude. There's no practical reason that I can identify at all to delay the transition. So to make the point further, the future state is going to be renewable energy, everything's going to be electric.
From an economic point of view, we want to be on that future state technology. Not doing that would be like saying, “Let's invest in horse production capacity in 1910.”
The climate argument is that there are lots of models that look at when is the point of no return. Even past the point of return, more carbon is still worse. Today, we're already experiencing a worse world in terms of climate patterns, weather patterns, compared to what I grew up with as a kid. We need to curtail that as much as we can. It's urgent that we do everything we can to create new products, new technologies across everything. Rivian is one slice of what needs to be thousands of companies that are doing products in their respective spaces like heat pumps for buildings or micro mobility for cities or electric mass transit. These are all big things that need to get built. Certainly, you could say, “Well, that's not my problem. Let's ship the problem to the next generation.” But I think we have a responsibility to our kids, and our kids’ kids to do something right now.
There’s a lot more demand for electricity from the grid right now. You have EVs that are rising, you have AI — which seems like it needs another nuclear plant every other day — and you have Bitcoin. Is our grid in good enough shape to sustain all these at once?
Absolutely not. That's the thing that makes this such a unique moment in time — we have one and a half billion cars on the planet that need to be replaced. We have thousands of coal power and natural gas power plants that have to be turned off and replaced. We have a grid that's archaic and doesn't meet any of the supply demand mapping that we should be thinking about. It doesn’t have effective ways, from a policy point of view, of managing things like net metering.
We have buildings that are leaking air and aren't sealed properly for thermal. There’s opportunity after opportunity after opportunity. You could look at it and say, “Oh my goodness, this is terrible. What are we going to do?” Or you could look at it in our view, and it's like, “Holy cow, there are so many business opportunities to go build this future world.”
There's only one time that the world went through the fossil fuel revolution. The late 1800s was only going to happen once, and the turn off of fossil fuels is only going to happen once. The turn on of renewable energy and carbon free energy can only happen once— that’s a once-in-a-planet activity.
We are also only going to have one time where artificial intelligence is birthed into the world. The fact is that those two things, by coincidence, are happening at the same time. Further than that, we happen to be alive now at this moment, and it’s going to be a very interesting chapter in a history book two thousand years from now, which is: the end of the fossil fuel era, the birth of artificial intelligence and the beginning of renewable, sustainable energy. It's like, “Wow, how are we so lucky as people today, to be born and alive at this hyper critical moment?” And none of that world is set up right. The whole grid has to be redesigned, the policy around us to be redesigned, the battery structures around— there's a lot to build.
Knowing the way we move as a species, it seems like we might be screwed. Is that too negative?
I was at a dinner last night with a bunch of entrepreneurs that are building different types of businesses, and essentially these two spaces: either energy or AI. The level of excitement and enthusiasm to create this future state that you see in other CEOs or the founders, and you see it across the business is inspiring. Whenever I'm dealing with a really hard problem within Rivian, I'll wander over into the engineering area and the inspiration of seeing really smart and capable people that are busting their tails to solve hard problems within Rivian, and it's inspiring. And there's thousands of people like this across the world, across many different companies — that’s what's going to get us as a species through this really challenging moment. So I have a lot of confidence in that, but it's not easy.
What do you think about nuclear? Is that one of the solutions here?
Today, just under 20% of our grid is nuclear power, and roughly just over 20% is renewable. It's half and half, and it's going to be hard to build renewable energy as quickly as we need it. So I do think nuclear power is going to play a role. And with the growth of AI and the energy needs for that, I think there's going to be a reinvestment in that technology.
Could you also explain to me how China has been able to develop $10,000 electric vehicles that apparently run pretty well. Is it the fact that there are phone companies that have been working on batteries that are doing it? Is it government subsidies? What exactly is enabling them to do that? And is there a way that that can be replicated elsewhere around the globe?
I've been able to drive some of these EVs, and it's exciting to see. First and foremost, it's important that they exist, it’s important that we have choices across lots of price points. And to achieve that, you need a few things. You need really heavy cost-focus at the design level, so the vehicles are engineered for cost. You need to have supply chains that are really robust and efficient. In the case of China, they benefit from a lower cost labor rate than what we have in the Western world, certainly in the United States. They also have incentives that are happening at the either the federal or the local government level, and so the combination of all those things have allowed for some really attractively priced EVs to be made and produced and sold in China. And I think this is great.
I think long term, some of these incentive structures are not going to be permanent, but the efficiencies of design and some of the efficiencies that an EV affords in terms of architectural layout will start to play out as you get to lower cost batteries. Other than the battery, an electric vehicle is actually a lot cheaper to build and maintain.
You've taken apart some of these cars. What have you found inside them when you look inside?
There’s nothing magic; there’s not this black box. You can see a cost focus of park consolidation, fastener elimination, part or feature elimination. They reduce the number of features in the vehicle. Range is a big one, where the range is adjusted down to a 150 or 200 mile range vehicle. Motor sizes are smaller, so it's less performance. There's just a whole series of decisions that are well understood, very trackable, and a very measurable set of decisions that are made.
On the battery side, there have been mobile companies that have been able to develop EVs in China. What do you think has enabled them to do that where we have failed to do that in the US?
I think the interesting thing about the development of a vehicle, especially the modern sense, is there's batteries and motors— those are the key elements of the architecture. They drive a lot of the cost. But in terms of customer differentiation, it sits with the design of the computers in the vehicle, the design of the software stack in the vehicle.
So companies that have a lot of experience in designing computers or designing software, have a valuable and differentiated skill set that can be applied to vehicle design. The benefit of a clean sheet company like Rivian, is that we have more software engineers than any other type of engineer. The reality is that the amount of tech that's going into electronics, compute, platforms and software is disproportionately high relative to what it was 10 or 15 years ago, it's just a step change. And that's only going to become more the case as time goes on.
One of the things that comes up when people talk about EVs is that the lithium within the batteries that may one day run out or the sourcing of lithium is going to result in human rights issues. What do you think about that?
I think a significant misconception and piece of misinformation in the world is that batteries burn through and use up the materials that are in them. That's not the case. Once you get batteries in the system, you're going to continually reuse the lithium, it's really a closed loop system. The value of the batteries is too high to even imagine a world in which they're just thrown away. So there's no world in which you have landfills full of lithium ion batteries. It'd be like throwing away boxes of gold necklaces. It will absolutely end up with a closed loop, with a really high rate of recycling.
An example of this is lead acid batteries, which aren't very valuable but has a recycling rate of around 99%, so I would say unequivocally the recycling rate of lithium ion batteries will be very near 100%. That said, in the short term, we have to extract enough lithium from the earth to support this closed loop cycle for batteries. There's a lot of places that have lithium, but most of them aren’t in the United States. so it does require trade with foreign entities.
Fortunately, with lithium, there's lots of places to get it where there's no questions around labor practices or how it's being mined. I think there's some other materials that are in the battery that are more challenging —the most problematic being cobalt where there's not a lot of places to get it. It’s a more challenging supply chain from a labor practices point of view, but from a technology point of view, most companies —certainly Rivian included— are working to engineer cobalt out of the battery.
So I don't think cobalt will be a long term part of the battery chemistry strategy, and we'll end up using materials that are more broadly accessible. Just like any other space, this is a space that's rapidly matured, so the demand for lithium has exploded over the last two and a half decades. With the move to lithium ion batteries and everything from our consumer electronics to our cars, it’s becoming a much more robust marketplace. It doesn't quite have a commodities market in the sense that steel or aluminum do but it'll get there, and I think you'll start to see this in some of the other materials as well.
Okay, let’s end on a question about plug-in hybrids. This is from The Wall Street Journal: “The plug-in hybrid car starts to win over buyers.” The story states the number of plug-in hybrid models on sale in the US has nearly doubled since 2019. Why do you think that these cars are doing so well, and would you ever consider building one?
Rivian would never consider building a plug-in hybrid. I think it's pure throwaway technology. It's a distracting intermediate technology that I can understand how, for a consumer, it's maybe a smaller bridge. But for a manufacturer, it's going to cause them to spend a lot of time and effort on something that has a terminal end state. Plug-in hybrids are technically hard-to-execute products. It benefits companies who have a lot of experience in engines, because they can take their engine and emissions expertise and be more profitable in the short term. But I really deeply hope that manufacturers, across the globe, invest enough resources and electrification so they're not caught offside when 2030 rolls around and they're not as capable as they need to be in developing those vehicles.
Thanks for coming on the show RJ
Good to see you, thanks again