Broadly, automotive sales were booming in March. But there were a few exceptions. Tesla had a rough Q1 with sales dropping around 13 percent year-over-year due to backlash from Elon Musk’s political activities. Fellow EV manufacturer Rivian — despite refreshing its R1 lineup — fared even worse. After a strong Q4 2024, the brand’s Q1 2025 sales deliveries showed a 36-percent decline from Q1 2024.
Key Takeaways
- Non-Tesla automakers generally did well during Q1 2025
- But Rivian deliveries fell by 36 percent year-over-year
- The California fires may have had a disproportionate impact on Rivian sales
- Rivian does produce cars in the U.S., but the R1 battery supply from South Korea still leaves the brand vulnerable to tariffs
Why Rivian Showed A 36-Percent Sales Decline
Rivian built 14,611 vehicles during Q1 2025. But the brand delivered just 8,640 of them. Those numbers were in line with Rivian’s projections. The brand noted in a February earnings call that “seasonality” and a “challenging demand environment” would be a drag on sales. Rivian said that the L.A. wildfires also contributed to the decline. As with Tesla, Southern California is a particularly important market for Rivian. Rivian says it remains on track to meet its target of 46,000 to 51,000 deliveries for 2025, slightly below the 51,579 delivered in 2024.
Rivian Could Face Some Vulnerability Due To Tariffs
On the one hand, Rivian is well-prepared for the new tariffs from the Trump administration. All of Rivian’s current vehicles are built in the U.S. at the brand’s plant in Normal, Illinois. And forthcoming vehicles — federal plant loan depending — will be built at another American plant in Georgia. Though Rivian’s R1 vehicles, already a bit pricey, could still face some significant tariff pressure. While those vehicles are built in America, the R1 batteries are sourced from South Korea (why the R1S and R1T were only eligible for a $3,750 federal tax credit). And those batteries are not cheap items.
Rivian has signed an agreement with LG Energy to build batteries in Arizona. However, those batteries will be bound for Rivian’s upcoming R2 SUV.
TopSpeed’s Take
Customer sales are only part of the equation for Rivian. In the past few months, the brand has inked a multi-billion-dollar tech deal with Volkswagen, launched a new mobility startup, and opened up its commercial vans to non-Amazon customers. However, sales remain an essential part of the equation, providing cash flow Rivian does not need to source externally.
The critical thing for Rivian is still nailing the R2 launch and production rollout. That model should come at a more affordable price point, allowing Rivian to scale up its production dramatically. And there should be a tremendous opportunity to get a capable electric SUV in that price range to market before Jeep builds an electric Wrangler, Ford builds an electric Bronco, and Toyota builds an electric 4Runner.
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