Rivian’s Make-or-Break Car Arrives at the Worst Possible Moment for EVs
The startup seeks to buck an EV downturn with a $57,990 SUV that can drive up to 330 miles on a single charge
- Rivian Automotive is launching the new, more affordable R2 SUV this spring to broaden its appeal and ensure its survival.
- The R2 will roll out with a $57,990 launch version, followed by a $45,000 version late next year, as Rivian aims to sell 20,000 to 25,000 R2s this year.
RJ Scaringe has been selling his boxy, off-road-ready Rivian SUVs and trucks to well-heeled electric vehicle fans for the past few years.
Now, his company, Rivian Automotive, is trying to do what few other automakers have been able to pull off: go from a niche startup to a mainstream car brand.
Its survival rides on the outcome. “The phrase ‘make-or-break product’ has been said, and it is probably true,” Scaringe, Rivian’s CEO, said in an interview.
Rivian plans to launch a new, more affordable SUV this spring called the R2. The rollout is a big bet by the electric-car maker that it can boost sales by appealing to a wider swath of car buyers, including people who might have considered a gas car instead.
Scaringe, an MIT-educated mechanical engineer by training, started Rivian 17 years ago. It delivered its first vehicle in 2021. The company, which has never made an annual profit, had $5.4 billion in revenue last year with sales of 42,000 vehicles.
Now he is debuting the new model amid a downturn in EV sales in the U.S., after the elimination of tax credits that encouraged EV sales.
“If you could have chosen a worse time, I don’t know when it would have exactly been,” said Ivan Drury, director of insights at the car-shopping website Edmunds. Most automakers have pivoted back to their more profitable gas models. Electric-only Rivian doesn’t have that option.
Rivian said Thursday it will first roll out a $57,990 launch version of the R2 that can drive up to 330 miles on a single charge, while being able to go from zero to 60 miles an hour as quickly as 3.6 seconds. Late next year, the company plans to sell a $45,000 version with an estimated 245 miles of range.
Since it began sales in 2021, Rivian has appealed to a small segment of ultrawealthy car buyers. The R1S and R1T start in the $70,000 range, and most surpass $90,000 or even $100,000 after buyers add options like larger batteries.
The company is now following a similar path as Elon Musk’s Tesla: starting with the more expensive, higher-margin products, then trying to broaden its appeal with more affordable models.
To doubters, Scaringe and his executives frequently point to the success of Tesla’s similarly sized and priced Model Y. Tesla sold nearly 360,000 Model Ys in the U.S. in 2025, making it America’s bestselling EV.
Wassym Bensaid, Rivian’s chief software officer, said EVs, other than the Model Y and a few others, haven’t caught on in the U.S. because they haven’t had the range, performance and value that customers want.
“We know that there are just two companies in the U.S. who know how to do it: Tesla and us,” he said.
Rivian is building a new factory in Georgia that will eventually make the R2, though it will start producing the R2 at its plant in Illinois. The company got a $6.6 billion loan from the Energy Department to build the Georgia plant.
Rivian aims to sell about 20,000 to 25,000 R2s this year, while the Georgia plant will eventually be able to churn out 400,000 cars a year—about 10 times as many EVs as Rivian sold in 2025.
Rivian shares fell 8.1% on Thursday, when the company detailed the R2’s pricing and specifications.
Scaringe is looking beyond the R2. The company plans to introduce even smaller and lower-priced SUVs called the R3 and R3X. Both cars could potentially go up against cheaper Chinese EVs, if those were to be sold in the U.S. in the coming years.
Rivian and Volkswagen are codeveloping future EV software and electrical architectures. This $5.8 billion joint venture has provided a cash lifeline for Rivian, while giving the German automaker much-needed access to EV technology after years of disappointing efforts.
The R2 is the first car to use the technology platform, which will be less expensive to build than other EVs while offering more advanced automated driving aids. Rivian plans to release a lidar-equipped R2 later this year that Scaringe has said will enable hands-free driving.
For now, Scaringe said the company is focused on getting the R2 launch right. “This step from our flagship products to mass-market is one that we get to make once,” he said.