It’s not an apples-to-apples comparison. Tesla, led by the world's richest and arguably one of the most influential men, is the world’s largest producer of battery electric vehicles. Rivian is a small California start-up experiencing a wobbly start to its EV journey, bleeding thousands of dollars behind every vehicle sold. But Tesla was there once too, and now there's a palpable sense of hope and confidence in Rivian’s brand image, untainted by the controversies that plague Tesla.
This kicks off the Friday edition of Critical Materials, your daily round-up of news that’s shaping the world of electric cars, software-defined vehicles and autonomous driving.
Also in today’s edition: Contemporary Amperex Technology Limited (CATL), the world’s largest producer of lithium-ion batteries is looking to raise $1.5 billion to expand its overseas supply-chain network and Volkswagen Group’s battery subsidiary PowerCo has reached an agreement with battery company QuantumScape to license its solid-state lithium-metal technology for mass production.
30%: EV Buyers Fed Up With Musk Find Solace In Rivian
If I had to categorize Tesla fans into two groups, here’s how I would describe each of them: The first group loves Tesla as a car company for developing groundbreaking EVs that help them get around, leaving no trail of toxic planet-warming fumes. This group can disassociate themselves from the rabid fanaticism that the other group is engaged in.
And that would be not all, but some of the other folks, who are all about inflating Tesla’s stock and glorifying its Full-Self Driving (FSD) system—something that’s improving but has a long way to go before it even merits the acronym “FSD.”
Again, it’s not an apples-to-apples comparison, but the underlying fact remains: Rivian owners are also all-in on the EV transition, they love the technology and owners InsideEVs has interviewed love their cars. And they don't have to deal with conspiracy theories and culture wars.
Here’s the latest from Bloomberg on how Rivian became the anti-Tesla from the perspective of someone who owns both, a Tesla and a Rivian:
Hilbert didn’t necessarily expect to be blown away by his new Rivian—he’d bought it essentially as a child hauler—but he’s been pleasantly surprised. The electric truck lacks fancy doors, the horn can’t make a fart sound, and it doesn’t promise to one day transform itself into a “robotaxi.” But it can go from zero to 60 in three seconds, it handles surprisingly well for its size, and it never, ever needs gas.
Today, Hilbert is one of the unofficial leaders of a small but passionate community of Rivian enthusiasts, constantly posting about the brand on social media. Many of these Rivian stans are ambivalent Tesla owners, put out by either Musk’s trolling social media persona or his politics, or some combination of the two. “I bought this before we knew Elon was crazy,” an increasingly common Tesla bumper sticker reads.
Unlike the aspiring meme lords who back Musk, Rivian fans tend to be earnest, maybe even a little boring. They trade tips about the best off-road tires and lust over accessories such as the $2,800 rooftop tent the company offers as an add-on. They have little to say about the “woke mind virus” or any of Musk’s other politically charged obsessions, but they can get extremely exercised by topics such as the question of whether there should be a Rivian version of the hand signal that Jeep owners greet each other with on the road.
If you’re reading this as a Tesla fan, you’re probably thinking that Rivian hasn’t tasted even one-tenth of Tesla's success. And you’re right, the brand has a long way to go. It's unclear if it would even survive in the long term.
But credit where it’s due, Rivian looks in better shape right now than it ever did. Its new R1S and R1T have undergone huge changes under the hood to eliminate the software and service nightmares that owners initially experienced. Volkswagen Group’s planned $5 billion dollar investment to license and advance the startup’s proprietary electrical architecture has validated Rivian as a serious player.
Plus, Rivian is expecting to turn its first-ever profit in the fourth quarter of this year, thanks to persistent streamlining of its production facility in Normal, Illinois and upgraded models. As of March 2024, Rivian had $6 billion in cash and now it has the backing of the VW Group.
Now I’m hoping that the R2 crossover and the charming R3 hatchback materialize as promised. If that happens by 2026 or 2027, the choice between a Tesla and a Rivian would be a really easy one, at least for me personally.
60%: CATL Aims To Raise $1.5 Billion To Expand Overseas
Call it protectionism, self-interest or simply the desire to be self-sustaining, the EV movement has in many ways revealed the worst sides of the global political landscape.
There’s a trade war brewing between China and the west. The U.S. and the EU have both slapped Chinese electric car imports with hefty tariffs. On top of that, the U.S. also has stringent battery sourcing requirements in place.
Experts believe that China has a sizable lead in battery technology, so making batteries locally in the West without its help isn’t ideal.
The world’s largest battery maker, supplier to Tesla, Volkswagen, Ford and many others, seems to understand this landscape all too well. CATL is now raising an offshore fund to finance its overseas operations and also to circumvent some of China’s own overseas investment rules.
Here’s the latest from the Financial Times:
It is holding talks with sovereign wealth funds, family offices, oil and gas companies and European manufacturers about potential investments, said one of the people.
As part of China’s strict system of capital controls, Beijing requires companies to get government approval for overseas direct investment above a certain threshold, which is typically an arduous and months-long bureaucratic process.
The $1.5bn fund would be managed by Hong Kong-based Lochpine Capital, which was incorporated in August 2023 under the name CATL Capital and changed its name in May.
Stellantis already has plans to build a battery plant in partnership with CATL in Europe. A similar collaboration is underway in Michigan with Ford. If it can further expand its presence in the West with a localized supply chain, the battery maker could play a huge role in driving down the costs of EVs.
90%: Future VW EVs Could Have Solid-State Batteries
Imagine an EV battery that puts the driving range of gas powered cars to shame, isn’t prone to fires and exhibits blistering charging speeds. Solid-state batteries have shown this promise in early research, but are prohibitively expensive to manufacture at this stage. But automakers think they can solve the cost problem.
The latest development in this space involves Volkswagen Group’s battery subsidiary PowerCo entering an agreement with American battery start-up QuantumScape to industrialize its solid-state lithium metal battery technology.
The deal involves the VW Group paying $130 million in royalties to the start-up, following which QuantumScape will grant the license to PowerCo to mass produce solid-state batteries up to 40 gigawatt-hours per year. PowerCo would have the option to scale up to 80 GWh annually, enough for a million EVs per year.
Here’s what QuantumScape said in a press release:
The companies believe this high-touch engagement represents the fastest way to achieve gigawatt-hour-scale production of solid-state technology to meet the growing global demand for better electric vehicle batteries.
The agreement creates a highly collaborative partnership that amplifies the companies’ core competencies – QuantumScape’s cutting-edge technology and PowerCo’s global capabilities in industrialization and manufacturing facilities.
Solid-state batteries are the next big thing in EV battery technology. They’re considered lighter, more energy dense and much safer than traditional batteries that use a liquid electrolyte, which is highly flammable.
Several global automakers are already deeply invested in solid state technology, including Toyota, Nissan, Hyundai and others.
100%: How Important Is Brand Reputation For You?
Of course, you want to first think about factors like cost, driving range, reliability and easy access to fast-charging. They’re the practical considerations when buying an EV.
But does brand image and reputation matter to you? Can you own a Tesla and completely isolate yourself from CEO Elon Musk’s shenanigans? Or would you rather go for something that’s less controversial and more in-sync with your values and beliefs? Leave your thoughts in the comments.
Contact the author: suvrat.kothari@insideevs.com
