Rivian and Lucid reported weaker-than-expected quarterly results as industry shifts and trade tensions disrupted operations, and Rivian lowered its outlook for the year.

Shares of Rivian dropped about 4%, and Lucid fell 7%, in after-hours trading on August 5, 2025.

Rivian, a US-based electric vehicle maker, cited higher costs due to rare earth supply chain disruptions and reduced income from regulatory credit sales.

The company’s cost of revenue per vehicle rose about 8% year-on-year to $118,375, and it now expects an adjusted core loss between $2 billion and $2.25 billion for 2024, up from a previous estimate of $1.7 billion to $1.9 billion.

Rivian will halt production for three weeks in September 2025 to install new components and prepare for its R2 SUV launch.

Lucid, a US-based luxury electric vehicle manufacturer, said tariff-related expenses hurt its profit margin in the second quarter, though it avoided major supply issues by using existing inventory.

Both companies face the expiration of a US$7,500 federal EV tax credit at the end of September 2025, which analysts say could drive a short-term sales increase.

🔗 Source: Reuters

🧠 Food for thought

1️⃣ China’s rare earth dominance creates critical vulnerabilities for US EV makers

The supply chain disruptions hitting Rivian and Lucid illustrate a deeper strategic problem: China’s overwhelming control of materials essential for electric vehicle production.

China controls approximately 70% of global rare earth mining and 90% of refining capacity, giving it substantial leverage over the entire EV industry 1.

The introduction of new licensing systems for rare earth exports has particularly impacted EV manufacturers, who rely heavily on these materials for motors and battery components 2.

This dependency became acute when China tightened export restrictions, causing the supply disruptions that Rivian specifically cited as driving up its per-vehicle costs by $14,000 in the second quarter.

European manufacturers face even greater vulnerability, importing 98% of their rare earth magnets from China, highlighting how a single country’s policy decisions can ripple through global automotive production 1.

2️⃣ Policy reversals expose how government support shapes EV market dynamics