Rivian's R2 SUV will utilize LG's 4695 battery cells, boasting higher total energy capacity and lower production costs compared to Tesla's Model Y Juniper. Both vehicles are expected to be priced around $45,000.
Rivian’s 4695 Battery Offers Greater Total Energy Capacity in Larger Cell Design
Rivian has revealed that its upcoming R2 compact SUV will feature LG's new 4695 battery cells. These cells are expected to offer a larger overall energy capacity and lower production costs compared to the 4680 cells expected in Tesla's Model Y Juniper facelift. However, the increase in total energy is due to the larger size of the 4695 cells rather than a substantial increase in energy density per unit volume or mass.
According to Rivian's shareholder deck, a 5-year contract with LG secures 67 GWh of 4695 cells, enough for up to 700,000 R2 SUVs. These larger cells hold more total energy than the 2170 cells currently used in Rivian’s R1 vehicles and Tesla’s Model Y, due to their increased size.
While Tesla is also moving to 4680 cells and aims to produce them cost-effectively with a dry cathode method and federal subsidies, Rivian’s 4695 cells provide additional benefits. These cells are physically larger (the same diameter but taller), which increases total energy capacity and offers manufacturability advantages.
Cost and Production Benefits
Rivian claims the larger cells will improve manufacturability and battery pack assembly by 45%, resulting in a "meaningful reduction in dollar per kilowatt-hour (kWh)." This cost advantage helps explain how Rivian can match the Model Y Juniper's expected price point while offering an increased total energy capacity.
Federal Tax Credit and Domestic Production
Rivian emphasizes that the 4695 batteries will initially be manufactured at LG's Arizona plant, ensuring compliance with the Inflation Reduction Act (IRA) and qualifying the R2 for the full federal tax credit. LG's innovation with the 4695 may give Rivian a significant edge in production costs, particularly as LG ramps up production in Arizona to maximize the $35/kWh federal tax credit.
