Rivian doesn’t have a footprint in China’s highly competitive EV market, where companies like BYD and Xiaomi reign supreme.
That doesn’t mean the California-based EV maker isn’t paying close attention to the world abroad.
In an interview with Business Insider, Rivian CEO RJ Scaringe said the company tore down a Xiaomi SU7, a highly popular EV sedan in China, as part of an industry-standard practice of benchmarking other vehicles in the market.
The SU7 is the Chinese smartphone juggernaut’s success story. It was launched in early 2024 with a starting price tag of $30,000 and helped Xiaomi blow past its annual delivery expectations by November of the same year.
The car was praised by Ford CEO Jim Farley. Business Insider previously wrote that the SU7 delivered on performance. After Rivian took a look, Scaringe agrees.
“I’d say it’s a really well executed, heavily vertically-integrated technology platform,” Scaringe said, referring to how the company develops the car’s tech stack in-house. “Nicely done.”
The CEO said the SU7 would be one of the cars he’d consider buying if he were living in China — that is, of course, since Rivian’s not there.
However, Scaringe said there’s no secret sauce inside the car that makes the SU7 cheap and a runaway success in the country.
“Cost — we understood how they’ve arrived there,” Scaringe said, adding that “there’s nothing we learned from the teardown.”
The CEO points to macroeconomic factors like the low cost of labor and the Chinese government’s support for EVs.
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“The cost of capital is zero or negative, meaning they get paid to put up plants,” Scaringe said of Chinese companies. “It’s a very different opportunity.”
Scaringe added that, while the US has provided loans, the idea of a production plant being supported through a government grant is “just not something that exists in the US.”
The Department of Energy announced in January a $6.6 billion loan to support Rivian’s new manufacturing plant in Georgia.
A mix of looser regulatory hurdles, lower labor costs, and more government subsidies allow China to churn out more affordable electric cars, Travis Fisher, director of energy and environmental policy studies at the Cato Institute, previously told Business Insider.
“When you take the cost of capital down to zero or less than zero and you have a cost of labor that’s very low — you can do the math, you can build a spreadsheet that can arrive at exactly how they’re doing it,” Scaringe said.
It’s a factor that the Rivian CEO said he wished more people talked about to de-mystify why China’s rate of electrification surpasses that of the US.
“I think it’s like Wizard of Oz,” he said. “I think when people think there’s a Wizard of Oz, it’s not helpful. It’s like there is no magic in the world. Everything could be analyzed and calculated.”
