During a tour of Rivian’s factory earlier this month, the electric vehicle maker’s CEO RJ Scaringe told reporters that he is very worried about battery shortages, as recounted by the Wall Street Journal. “Put very simply, all the world’s cell production combined represents well under 10 percent of what we will need in 10 years,” the WSJ quotes him as saying. “Meaning, 90 percent to 95 percent of the supply chain does not exist.”
Scaringe is hardly the first to raise this particular alarm bell—here are some other articles from the last six months about the same issue—and recent concerns about nickel supplies, a key ingredient in electric batteries, have only intensified the issue. None of this is especially surprising, though. EV batteries require a lot of raw materials, we barely made any of them 10 years ago, and now every car company wants to make a lot of them every year.
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One possible reaction a car company could have to this problem is to carefully engineer their products to try and use the smallest possible batteries while still delivering a desirable product. In other words, to be efficient with a scarce resource, something economics textbooks tell us free markets are especially good at doing.
But that is not what’s happening with electric vehicle batteries. In fact, no company is being more wasteful with battery resources than Rivian itself, which manufactures vehicles with some of the largest batteries on the market.
Rivian makes two cars, a pickup truck and an SUV, called the R1T and R1S respectively. If you want a Rivian vehicle any time in the next two years, your choices in battery size are like popcorn at a movie theater: You can either have a Large or Max. A “Large” pack is 135 kWh with an estimated range of 320 miles. The Max is a whopping 180 kWh with a range of more than 400 miles.
A 135 kWh battery pack—which, again, is the smaller of the two options—is really big. According to the website EV Database, the average electric vehicle on the market in Europe, where the EV market is more mature and competitive, has a battery pack of 60.4 kWh, less than half the size. A Rivian’s battery is almost double the size of a Tesla Model Y’s 75 kWh battery pack despite providing essentially the same range (Tesla sells Model Ys with different ranges but manufactures the same battery pack into all of them unlocking additional range via software). It is 37 percent bigger than the standard Ford F-150 Lightning battery pack of 98 kWh—which delivers less range, somewhere in the area of 220 miles—and 4 kWh more than the extended-range version of the electric F-150. And the larger Rivian Max battery has the storage capacity of two and a half Model Y batteries or three Model 3 batteries. No matter which way you slice it, Rivian is stuffing its gigantic cars with even more gigantic batteries.
The reason the Rivian batteries have to be so huge is because the vehicles are inefficient. Just look at them. They are giant boxes that sit high off the road. Boxes are not very aerodynamic. But, targeting an affluent upmarket, Rivian figured its customers would be willing to pay $73,000 or more for a battery pack so large the car could still get 300 miles of range.
Rivian is not alone here. The electric F-150 and Cybertruck are similarly clunky and inefficient; the Hummer EV even more so (its battery pack is a stupid 210 kWh, which would have powered my 1,000 square foot apartment for all of last month on a single charge, but conspicuous overconsumption is a Hummer’s whole deal). EV efficiency is usually measured in kWhs per mile—or miles per kWh—but let’s stick to the miles per gallon equivalent metric used by the Environmental Protection Agency for convenience. Quartz recently put out a handy graphic showing just how inefficient these huge e-guzzlers are. A Hummer EV gets an eMPG of 47, worse than a Prius hybrid powered by gasoline and a tiny 1.3 kWh battery to aid with acceleration. The Ford F-150 Lightning gets 68 eMPG, and a Rivian R1T and Cybertruck get 70. For comparison, a Model Y gets 125, double the efficiency of these electric pickups, in large part because it is engineered to be more aerodynamic.
These giant vehicles get such poor efficiency ratings because all of them are engineered to accomplish goals other than efficiency. The F-150 and Hummers are engineered to look like their gas-powered counterparts, cultural signifiers of conspicuous consumption that not only devalue efficiency but intentionally reject it. The Cybertruck is engineered to look strange so people talk about it. And Rivians are engineered to look like luxury outdoorsy anythingmobiles. Which is why they all need giant battery packs the size of two or three typical EVs just to meet customer range expectations.
These are all perfectly rational design decisions for companies that thought their biggest problem was convincing people to buy electric cars. But, as EV makers can’t keep up with demand, that is not the challenge anymore. Now, the challenge is attempting to limit the use of scarce battery pack resources, a challenge these huge, energy-intensive cars were not designed to do. Which is why companies like Rivian find themselves struggling with production, pushing back delivery dates, and generally having difficulty adapting to a landscape where resource scarcity is a bigger problem than convincing people to buy electric cars.
All of this has a tinge of irony to it. Automakers spent decades successfully convincing American drivers they needed increasingly large, impractical cars for their everyday errands and commutes. This was a massively profitable endeavor for the car companies, as they could sell those big cars for a lot more money without them costing that much more to make than smaller, cheaper cars (a 2020 study by Morgan Stanley found Ford lost money on each Ford Focus sold, a compact car; the reported profit margin of a Ford F-150 pre-pandemic was somewhere around $10,000 per truck).
Gas powered pickup trucks are similarly inefficient to gas cars, relatively speaking, as electric pickup trucks are to electric cars. But, with gas-powered cars, the auto companies were externalizing all the costs of that inefficiency onto customers through the cost of more gasoline, charging more for the privilege of buying one, and pocketing the profits. But the dynamic is different with electric vehicles. The bigger, less efficient cars require much bigger batteries, and batteries are the most expensive and scarce part of an electric car. The cost per kilowatt-hour fluctuates, but has increased to $160 compared to a low of $105 last year. At $160 per kWh, a “large” Rivian battery pack costs $21,600, compared to $14,175 last year. Suddenly, all that inefficiency is a huge headache for automakers.
Automakers will spend billions of dollars in the coming years marketing every electric vehicle as a kind of no compromise machine, with all the convenience—or more—of a gas car but without the environmental costs. This is a flawed message for all EVs—which are better for the environment than gas cars, but not good for it—and especially so for the biggest ones. We can either learn from the mistakes of the gas car era or we can repeat them.
