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It’s “make or break” time for Rivian, the EV maker that’s widely considered one of the sector’s most promising contenders.
Earlier this month, the California-based company revealed its second-generation vehicle, the R2, and teased a third-generation product dubbed R3 (a midsize crossover that Rivian said will be cheaper than the R2). The launch of the R2 is regarded as a pivotal moment for the startup’s survival.
“Rivian’s R2 is basically its make-or-break model. It’s the first volume play and it brings its products into much more mainstream territory,” Paul Waatti, director of industry analysis at AutoPacific, told Tech Brew. “The brand’s future really hinges on that model’s success.”
In Q4 2023, Rivian lost roughly $40,000 on each vehicle it delivered. Its losses for the year totaled $5.4 billion. And the automaker’s acknowledgment that its production would essentially remain flat this year disappointed Wall Street.
But investors sent Rivian’s stock up 13% on the R2 reveal after the company said it would start deliveries in the first half of 2026 from its plant in Illinois—a plan that the company estimates will yield $2.25 billion in savings after delaying plans for a new factory in Georgia.
Optimism around R2 stems in part from the SUV’s price tag: The vehicle will start at around $45,000—$30,000 lower than its current R1S SUV. Rivian reported receiving more than 68,000 orders for the R2 in the day after the reveal, per Wired.
The urgency around Rivian’s ramping up production and narrowing its losses is being driven in part by fading EV hype; sales growth has been slowing and some automakers are pumping the brakes on their electrification strategies. Price remains a vexing issue; consumers are put off by EVs’ higher price tag compared to gas-powered vehicles, and automakers are locked in a price war that’s making it harder to reach profitability on plug-in models. Underscoring the pressures Rivian is feeling, the company recently said it would lay off 10% of its salaried workforce.
“Rivian was one of the most promising startups to enter the scene, but reality set in as it experienced the growing pains any new automaker faces as it scales,” Waatti said. “Building cars is hard and selling them profitably is even more challenging.”
Still, he expressed optimism in Rivian’s future because of the company’s strong brand identity centered around outdoor adventure, and because the lower cost of the R2 and R3 is promising.