Rivian‘s new R2 electric SUV, set to be more affordable than its current lineup, will be powered by next-generation batteries produced by LG Energy Solution in the U.S. The R2 batteries, named “4695” for their 46mm diameter and 95mm height, will be manufactured at LG’s facility in Queen Creek, Arizona, marking a shift from Rivian’s current reliance on Samsung SDI cells produced in South Korea. This shift aligns with recent incentives in the U.S. to encourage domestic battery production under the Inflation Reduction Act, which provides tax credits for U.S.-produced EV batteries.

The larger 4695 cells are designed to increase efficiency by reducing the number of cells needed in each battery pack, thus lowering both weight and cost per kilowatt-hour. These changes also simplify the manufacturing process, which Rivian expects to improve by around 45% in assembly efficiency. This move is part of Rivian’s broader goal to cut costs and bring its vehicle pricing within reach of more consumers, with the R2 expected to start at $45,000, a notable drop from the starting prices of the R1T and R1S models.

The partnership with LG Energy Solution, a major player in the EV battery space, will provide Rivian with access to advanced, high-capacity batteries while complying with domestic production requirements. LG Energy has also established partnerships with other automakers, including GM and Ford, to meet the growing demand for U.S.-produced EV batteries. This strategy of domestic production is crucial, especially as future government policy around EV incentives remains uncertain. Rivian plans to begin R2 production in the first half of 2026, by which time LG’s Arizona facility is expected to be fully operational and able to meet Rivian’s battery demands for this new lineup.

With over 100,000 preorders for the R2 already placed, Rivian aims to expand its reach in the electric vehicle market significantly. The collaboration with LG is seen as a strategic move to secure battery supply and manage costs amid an evolving regulatory landscape and rising competition in the EV industry.