South Korean manufacturers are seeking to expand their presence in the electric vehicle market through a partnership with Rivian, the burgeoning US electric vehicle maker that has been in the global spotlight for its potential to become the next Tesla.
According to the industry, Posco International is supplying some 145 billion won ($122 million) of half shafts for 340,000 vehicles produced by Rivian. Domestic partner Erae AMS will work alongside it to begin delivering the ordered amount next year.
This comes in addition to a separate deal signed with Rivian in August to supply the half shafts for 20,000 vehicles.
A half shaft is a driving shaft that feeds power from the differential to the wheels, as electric cars have the motor driving through a fixed gear ratio or differential.
Rivian had already announced in April that it selected Samsung SDI as a battery supplier for its R1T pickup and R1S SUV, which is slated to be launched next month.
Although financial terms have not been disclosed, market experts expect that the Korean battery maker could take home at least 200 billion won from the supply deal, considering the vehicles’ exceptional response, with 150,000 preorders.
As Rivian calls its R1T pickup and R1S SUV “adventure vehicles,” the American startup has been stressing their outstanding battery pack capacity with a 480-kilometer driving range and durability in extreme temperatures.
It has been reported that Rivian is also seeking to work with LG Energy Solution, as the Korean battery maker’s LFP batteries could be a good fit if it adopts iron-based cells in their base vehicles.
Other midsized Korean battery equipment producers have also won orders from Rivian, as it plans to start producing its owns batteries from 2023 by building a battery manufacturing factory envisioned for some 100 gigawatt-hours annually.
Local battery material producer CIS is supplying manufacturing equipment for the electrode process. People and Technology, another battery equipment maker here, clinched a deal to supply coater and press equipment. DA Technology also signed a contract with Rivian to supply notching and stack equipment, which is key for the assembly process.
Hyundai Motor Group auto parts affiliate Hyundai Transys is delivering Rivian’s seats for all electric trucks and SUVs made through 2027. The Korean firm had won a $800 million order in 2019.
Founded in 2009 as an electric vehicle startup, Rivian has been financially backed by US corporate giants including Amazon and Ford. Although it has only made less than 200 vehicles, the company is working to produce the world’s first electric pickup truck tough enough to go off-road with a longer range than existing electric models. The company began shipping out its first product, the R1T, last month.
On Nov. 10, Rivian’s stock debuted with as many as 153 million shares sold at an initial offering price of $78, bringing the valuation of the company to $66.5 billion. The offering raised nearly $12 billion in financing.
But Rivian shares have been highly volatile since the IPO. They slipped 8 percent Monday after Ford announced its plan to halt building a vehicle with Rivian. Ford took a $500 million stake in Rivian in 2019 for a strategic partnership to create a vehicle on Rivian’s development platform.