Rivian and Lucid Warn of Rising Costs Amid Tariffs and Slowing EV Demand

Electric vehicle makers Rivian (NASDAQ:RIVN) and Lucid Motors (NASDAQ:LCID) are bracing for higher production costs as new U.S. tariffs on imported vehicles and auto parts come into effect, further pressuring an EV market already hit by weakening demand. Rivian CEO RJ Scaringe said tariffs could raise costs per vehicle by “a couple of thousand dollars,” as the company revises its supply chain. Rivian also cut its 2025 delivery forecast to 40,000–46,000 units, down from 46,000–51,000.

Lucid’s interim CEO Marc Winterhoff said tariffs could drive up costs by 8% to 15%, although its production target of 20,000 units remains unchanged, partly supported by the launch of its Gravity SUV. Winterhoff noted Lucid may start production of its upcoming $50,000 midsize vehicle in Saudi Arabia instead of the U.S. to offset tariff-related expenses.

The EV slowdown comes as economic uncertainty and consumer price sensitivity drive buyers toward more affordable hybrid options. Rivian shares slipped 1.4% after hours, while Lucid stock rose 1.3%.

Both automakers are focused on cost-cutting and affordable vehicle rollouts. Rivian is investing $120 million to localize suppliers near its Illinois plant in preparation for its lower-cost R2 SUV. It also reported a Q1 gross profit of $206 million and reaffirmed its goal of modest profitability this year, despite raising its capital expenditure forecast to $1.8–$1.9 billion due to tariff-related construction costs.

Lucid and Rivian reported narrower-than-expected Q1 losses, reflecting their ongoing cost-reduction strategies. As the EV industry navigates new trade barriers and shifting consumer preferences, affordable, tariff-resilient production will be key to long-term growth.