Keeping It Simple

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Buying a Rivian is about to get cheaper...

I dunno... $100K is a LOT of money for a vehicle...😏

EV startup Rivian is betting on a cheap(er) new electric SUV to save its business
The Rivian R2 will be tens of thousands of dollars cheaper than the company's existing options
By William Gavin


It’s now or never for Rivian. The startup is betting its future on the success of the new R2, an electric SUV set to be unveiled Thursday. If it fails — or the announcement hype doesn’t manifest — Rivian’s dreams may not be rechargeable.

The Irvine, California-based company is set to release the Rivian R2, a two-row electric compact SUV with around 300 miles of range that will be able to hit 60 miles per hour in just three seconds, according to leaked specifications. The R2 will seat five people and come with a starting price tag between $47,000 and $47,500.


In the larger world of electric SUVs, the R2 isn’t exactly a trendsetter; Tesla’s Model Y and Ford Motor Co.’s Mustang Mach-E already exist as popular alternatives. Plus, the unveiling comes at a time of slowed demand for EVs as customers are wary of high prices and the reliability of EV charging.

However, the R2 is a necessary venture for Rivian. Its other offerings — the well-reviewed R1T and R1S — are costly beasts. The 2024 R1T starts at $69,900, and the 2024 R1S has a nearly $75,000 price tag; the R2 will offer a more affordable, if smaller, alternative that could entice Rivian’s potential customer base.

“We’re certainly working very hard to make sure we deliver R2 on time and, to the extent possible, pull any time we can out of the program,” CEO RJ Scaringe told investors last month. “We do think we’re in a very interesting moment in time where there is a lack of choice of highly compelling EV products in that $45,000 to $55,000 price range.”

The R2 won’t enter production until 2026 at the earliest. While that’s only two years away, Rivian has to be careful that its financial issues don’t send it the way of fellow EV startup Fisker, which warned investors it may not survive through 2025.

Last month, Rivian said it lost $5.4 billion in 2023 and expects to lose another $2.7 billion this year, even as it continues with its “company-wide cost transformation program.” The company slashed its workforce by 10% after it presented earnings in February, laying off about 800 people in its third round of cuts since July 2022. Rivian has also moved to lay off another 100 workers at its plant in Normal, Illinois.

Rivian produced 57,232 vehicles and delivered more than 50,100 last year, exceeding its most recent full-year 2023 production guidance but falling below analysts’ expectations. Rivian also said it plans to produce about 57,000 vehicles in 2024, far below what Wall Street had expected.

The Normal facility is expected to be shut down for multiple weeks in April for renovations that Rivian said would improve production by about 30%. Rivian is also planning to start production on a new $5 billion factory in Georgia, which will build the R2.

Essentially, Rivian is the the so-called “valley of death” for EV companies. During this period, startups increase production but fail to bring in enough cash to cover operational costs. Although Rivian is backed by Amazon, the company’s influence over its operations has been waning, and it lacks the vast resources available to Elon Musk’s Tesla or the Saudi Arabia-backed Lucid Motors.

At the end of 2023, Rivian had $7.85 billion in cash and cash equivalents, down significantly from the $9.1 billion it had on hand three months earlier. Rivian could run out of cash if that burn rate continues before the R2 hits the market.

Rivian shares nudged up more than 2% before the R2 unveiling, scheduled for 10:00 a.m. PT or 1:00 p.m. ET. on Thursday.