The EV carmaker is now building its own motors in-house instead of relying on a supplier.
Rivian is continuing to fine-tune its production capabilities by taking a page directly from Tesla's playbook: building a new electric drive unit, called Enduro, in-house instead of relying on an outside supplier. The EV startup has faced numerous production issues in recent months and that's a problem because it has a significantly large order bank to fill for the R1T and R1S. One key area where it was falling behind are those electric drive units, which were previously supplied by Bosch.
Bosch faced its own difficulties building enough of them to meet Rivian's quota due to a continued power semiconductor shortage, Automotive News reports. Rivian's solution was to get the Enduro drive unit's production rate increased beyond the figures needed for its commercial van for Amazon, called the EDV. Enduro consists of a two-motor design, meaning one motor at each axle, and requires fewer critical semiconductors per vehicle – and that's a huge factor in increasing production rates.
Rivian's stock price dropped by nearly 90% since R1T production got underway in 2021 because it continued to fail to meet production targets. This also led to Rivian slashing its workforce numbers twice in the past year. Enduro does not use the same semiconductor supplier as Bosch, and that makes a huge difference for Rivian's assembly line.
“One of the key mitigation tools that we have at our disposal is the introduction and the ramp of the Enduro drive unit this year, which unlocks a new secondary supply base of our power semiconductors within the plant,” Rivian CFO Claire McDonough said earlier this month. “Our Enduro drive unit launched on time and is ramping according to schedule.”
Rivian's Normal, Illinois factory will have enough capacity to begin installing the Enduro units in the R1T and R1S in this year.
This is a game changer because this change will allow Rivian to meet its 50,000-unit production target – consisting of both customer vehicles and the EDV – this year. Rivian's shift towards in-house component production is not only limited to the drive unit. Earlier in the year, it began switching to its own audio system instead of relying on yet another third-party supplier. Tesla has learned numerous production-related lessons over the years, specifically the necessity to build as many components in-house as possible.
If you recall, Tesla had its own production issues in the past, specifically with the Model 3. As Rivian continues to grow – a new factory in Georgia is on the way but won't be online until later in the decade – it's clearly learning vital auto industry lessons. One of them is the ability to rely on itself to develop and produce vital components internally.
Keyword: Rivian Copying Tesla To Increase Production Rates