[UPDATE] Rivian stock has been on a tear this past week. Deliveries have jumped and the R1T and R1S continue to get stellar reviews.
But Rivian’s breakthrough vehicle won’t arrive until the R2, which the company is expected to preview to the public in early 2024.
The R2, hitting the market by 2026, is expected to be offered as both a compact SUV and pickup priced at between $40,000 and $60,000, much less expensive than its current products, which start at over $70,000 but typically skew towards $80,000 and above.
Like Rivian’s current R1T truck and R1S SUV, the R2 will be off-road-capable (via Car and Driver).
“The R2 captures the essence of our brand, but of course, to a smaller package and in a much lower price point,” said Rivian CEO RJ Scaringe in the third quarter earnings conference call in November.
Scaringe, keenly aware of the high prices that put its cars beyond reach of the average car buyer, repeated the-cheaper-model-is-coming mantra during the earnings call and made it clear that this will make its EVs available to many more car buyers.
“So if you look at R2 launching in 2026,” he said. “We’re enormously excited about the product, but to do it at a price point that’s considerably lower than what we have in R1 and at a form factor, a size that [fits] the largest segment in the United States,” he said.
Rivian future hinges on R2
The R2 is shaping up to be analogous to Tesla’s 2016 introduction of the Model 3, which transformed Tesla from a manufacturer of overpriced elite EVs to a mainstream car maker — putting it on a path to be one of the top global vehicle manufacturers by output.
Rivian’s “business will grow disproportionately” based on the coming R2, according to Scaringe, with the “R2 platform representing a significant step up in volume,” he said to Bloomberg earlier this year, adding that the R2 will be the “core focus” now for Rivian.
The R2 will also have domestically-made batteries — though reports indicate there have been some battery shake-ups in house — that meet Inflation Reduction Act (IRA) federal EV tax credit criteria. Currently, Rivian cars are not eligible for the entire credit. The R2 will be eligible for the entire $7,500 credit, potentially driving down the price even more.
Rivian delivered 15,564 vehicles in the third quarter, more than twice the 6,584 units it delivered in the third quarter of last year. And it expects to deliver 54,000 vehicles in the fiscal year, more than double the roughly 20,000 units delivered in fiscal 2022.
Another positive: Rivian and Tesla have reached an agreement to integrate Rivian’s vehicles into Tesla’s Supercharger network. Rivian cars will adopt a charging port compatible with Tesla’s starting in 2025, which Scaringe described as a more “elegant” charging solution.
Rivian has also been delivering electric vans to Amazon in the U.S. and begun to deliver vans in Europe and AT&T announced on December 14 it will purchase Rivian vans and R1 vehicles for its commercial fleets.
Demand shifting to SUV
The demand mix is shifting to the R1S SUV from the R1T pickup, according to Scaringe. In the first quarter of this year, roughly 75 percent of production was for the R1T but the “demand mix” is just the opposite now: it’s 75 percent R1S, he said.
“[But] we’re now getting…to the point where production matches demand,” he said to Bloomberg. Rivian will spend the next few quarters focusing on getting R1S production to catch R1S demand.
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