In a packed theater in Laguna Beach on Thursday morning, Rivian founder and CEO RJ Scaringe opened his presentation to resounding whoops from the audience, well before the company unveiled its three buzzy new vehicles, the Rivian R2, R3, and R3X.
While it’s not uncommon to pack a room with fans for a vehicle launch, it is unusual for the CEO of a car company outside of Elon Musk to get the kind of response that Scaringe did. For a vehicle unveiling to feel upbeat and exciting without feeling cringe is even rarer.
“Every decision we’ve made, the products, the strategy, what we’re building, how we go about building our business, the way we structure our teams, the way we think about our culture, has been built around this culture of keeping the world adventurous forever,” Scaringe says.
Throughout his presentation, Scaringe kept underlining the “forever” part of Rivian’s mission statement, which, given the company’s well-documented financial troubles over the last few months, recent rounds of layoffs, and its announcement yesterday that it’s pausing its $5 billion Georgia plant for an undetermined amount of time, seems somewhat disconnected from the realities facing the company today.
It’s not just Rivian, either. EV sales growth has gone from rocket speed to glacial, with many automakers putting factories, investments, and whole model lineups on ice. But Scaringe says it’s too late to go back.
“I would say with absolute and complete certainty that the entire world is going to convert to electric vehicles,” Scaringe tells The Verge following yesterday’s event. “I’ve never been more bullish on electrification. I’ve never been more bullish on Rivian.”
Tailwinds and Headwinds
I met Scaringe in a private space above the Rivian South Coast Theater where the R2 (and R3) event took place. (The company bought the theater and restored it in 2023, and now uses it as both a theater and a company space for events.)
He had just left the stage after introducing the world to the R2 and R3, and seemed energized, if a bit tired. Scaringe, who is a vegan, snacked on a couple of pieces of peanut butter and jam toast while we talked about the mix of tailwinds and headwinds facing Rivian.
“In 2012 and 2013, when I would go to meetings and tell people that we are going to build an electric SUV, people were like, ‘You’re crazy, there’s no market for that,’” he says. “And in 2016 and 2017, people thought, ‘Oh that’s going to be this little niche thing.’ Today, I don’t think anyone is debating the end state. But relative to what it looked like 10 years ago, I’ve never seen this level of tailwind.”
The mission of “keeping the world adventurous forever” is especially challenging in today’s economic environment. Scaringe notes high interest rates make the cost of capital for companies like his very expensive. Other obstacles include the increasing politicization of the electric transition, as well as sparse and unreliable charging infrastructure nationwide, especially in rural and remote areas. Add to that rising geopolitical tensions and you’re left with the feeling that all of this could derail at any point.
Rivian has answers to some of these challenges, but not all. The company will use Tesla’s NACS connectors for its future vehicles starting in 2025, which will allow Rivian owners to use the company’s Supercharger Network. Both the R2 and R3 will have the NACS ports built natively into the vehicle.
Rivian hopes that the new R2, with a lower starting price of $45,000, and eventually the R3, whenever it goes into production, will help the company entice more people to make the switch to electric. Especially if it qualifies for the $7,500 EV tax credit.
“Seven percent of new vehicle sales are electric,” Scaringe notes. “Unfortunately, everyone wants to talk about electric-on-electric. Like how does Rivian stack up against Tesla? The reality is that Tesla continues to be wildly successful, and we want to pull from that 93 percent that haven’t made the jump to pure EV, because the form factor didn’t fit their lifestyle.”
Like Tesla, Rivian’s lineup is pure battery electric, without a tailpipe in sight. But unlike Elon Musk, Scaringe is losing money on each new vehicle. Right now, Rivian loses an estimated $43,000-plus on each R1T, R1S, and EDV delivery van it builds, according to its most recent earnings report.
There are plans for a shutdown at the Normal, Illinois, plant to improve efficiency and get ready for the R2 and R3 production. In a filing with the SEC, Rivian said pausing its plan to build a factory in Georgia will save the company around $2.5 billion.
Scaringe says that he sees three worlds colliding at the moment: a lack of choice for electric vehicle buyers, the political and policy environment, and the current global state of affairs, which affects everything from the supply chains to the availability of raw materials for batteries and chips.
“We’re in a very unique macro-moment in time,” Scaringe says. “Interest rates are the highest they’ve been in a long time. The global tensions that exist, in multiple ways, are high. The willingness to try new things is more limited. But that’s not going to be a forever thing. It means you have to make the right kinds of tradeoffs.”
A Hopeful Brand
Rivian learned a lot when it decided — perhaps foolishly — to launch and build two brand-new vehicles, the R1T and R1S, simultaneously. It’s something Scaringe says has never gotten any easier over time. The company learned a lot from the experience and has since found ways to make smart tradeoffs to keep the upcoming R2 at that magic $45,000 starting price.
For one, Scaringe says the R2 will be less complex than the R1 vehicles. It won’t have adaptive air suspension, but rather a fixed suspension that will build on what the company learned from the R1 line.
The R2 also won’t get other small creature comforts, like the removable Bluetooth speaker, which is standard on the R1T and R1S. (The flashlight in the door will remain.)
But Scaringe says that the R2 will still be off-road capable. And it will showcase a handful of fun, new features, like seats that fold flat for in-car camping; a rear-lift window for surfboard storage; chunky scroll wheels for anyone irked by the loss of physical buttons to screens; and cavernous glove compartments — presumedly for all the gloves.
The R2 also won’t get other small creature comforts
The company won’t launch both the R2 and R3 at the same time, either. The R2 will come first, and they’re currently showing off the R3 as a “very close sibling” to the R2.
Rivian’s future is clouded in doubt. It’s cash pile is dwindling. Its factory plans look grim. But the company continues to project optimism — even in the face of financial oblivion.
Elon Musk’s Cybertruck may be a vehicle for the end of the world. Rivian’s R2 and R3 are asking us to imagine a much kinder and more hopeful future.
