Rivian’s CEO talks about the launch of the R2 and R3, and why he has ‘complete certainty’ that electric cars will win

In a packed theater in Laguna Beach Thursday morning, Rivian founder and CEO RJ Scaringe opened his presentation to loud cheers from the audience, long before the company unveiled its three buzzy new vehicles, the Rivian R2, R3 and R3X.

While it’s not uncommon to have a room full of fans for a vehicle launch, it’s unusual for the CEO of a car company outside of Elon Musk to get the kind of reaction Scaringe got. It’s even rarer that a vehicle reveal feels joyful and exciting without making you cringe.

“Every decision we’ve made, the products, the strategy, what we build, how we build our business, the way we structure our teams, the way we think about our culture, is built around this culture of the world for always keep it adventurous,” says Scaringe.

During his presentation, Scaringe continued to emphasize the “forever” part of Rivian’s mission, which given the company’s well-documented financial problems over the past few months, recent layoffs and yesterday’s announcement that it is closing its $5 billion Georgia plant stops. indefinitely, seems somewhat disconnected from the realities facing the company today.

It’s not just Rivian either. Electric car sales growth has gone from rocket speed to glacial development, with many carmakers putting factories, investments and entire model ranges on ice. But Scaringe says it’s too late to turn back.

“I could say with absolute and complete certainty that the entire world will switch to electric vehicles,” says Scaringe The edge following yesterday’s event. “I have never been so optimistic about electrification. I have never been so optimistic about Rivian.”

I met Scaringe in a private room above the Rivian South Coast Theater where the R2 (and R3) event was taking place. (The company purchased the theater and restored it in 2023, and now uses it both as a theater and as a business space for events.)

He had just left the stage after introducing the world to the R2 and R3, and seemed energetic, if a little tired. Scaringe, who is vegan, ate a few pieces of peanut butter and jelly toast as we chatted about the mix of tailwinds and headwinds Rivian faces.

“In 2012 and 2013, when I went to meetings and told people we were going to build an electric SUV, people said, ‘You’re crazy, there’s no market for that,’” he says. “And in 2016 and 2017, people were like, ‘Oh, that’s going to be a little niche thing.’ These days I don’t think anyone debates the end state. But compared to what it looked like ten years ago, I’ve never seen so much tailwind.”

The mission to “keep the world forever adventurous” is especially challenging in today’s economic environment. Scaringe notes that high interest rates make the cost of capital very expensive for companies like his. Other obstacles include the increasing politicization of the electric transition, as well as scarce and unreliable charging infrastructure across the country, especially in rural and remote areas. Add to that the rising geopolitical tensions and you get the feeling that this could all go off the rails at any moment.

Rivian has answers to some of these challenges, but not all of them. The company will use Tesla’s NACS connectors for its future vehicles starting in 2025, allowing Rivian owners to use the company’s Supercharger Network. Both the R2 and R3 have the NACS ports built into the vehicle as standard.

Rivian hopes the new R2, with a lower starting price of $45,000, and eventually the R3 when 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. For example, how does Rivian perform against Tesla? The reality is that Tesla remains wildly successful, and we want to appeal to those 93 percent who didn’t make the leap to pure EV because the form factor didn’t suit their lifestyle.”

Like Tesla, Rivian’s lineup is purely battery-electric, with no exhaust in sight. But unlike Elon Musk, Scaringe loses money on every new vehicle. Right now, Rivian is estimated to lose more than $43,000 on every R1T, R1S and EDV van it builds, according to its most recent earnings report.

Plans are underway to close the Normal, Illinois plant to improve efficiency and prepare for production of R2 and R3. In a filing with the SEC, Rivian said halting its plan to build a factory in Georgia will save the company about $2.5 billion.

Scaringe says 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 is affecting everything from supply chains to the availability of raw materials for batteries. and chips.

“We are in a very unique macro moment,” says Scaringe. “Interest rates are the highest they have been in a long time. The global tensions that exist in several respects are high. The willingness to try new things is more limited. But that won’t be forever. It means that you have to make the right decisions.”

Rivian learned a lot when it decided – perhaps foolishly – to simultaneously launch and build two brand new vehicles, the R1T and R1S. It’s something that Scaringe says has never become 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 magical starting price of $45,000.

Firstly, Scaringe says the R2 will be less complex than the R1 vehicles. It won’t have an adaptive air suspension, but rather a fixed suspension that will build on what the company learned from the R1 line.

The R2 also doesn’t get other creature comforts, such as the removable Bluetooth speaker, which is standard on the R1T and R1S. (The flashlight in the door remains.)

But Scaringe says the R2 will still be off-road capable. And it will demonstrate a handful of fun, new features, like seats that fold flat for car camping; a rear drop-down window for surfboard storage; chunky scroll wheels for anyone annoyed by the loss of physical buttons on screens; and cavernous glove boxes – presumably for all the gloves.

The R2 also doesn’t get any other creature comforts

The company will also not launch the R2 and R3 at the same time. The R2 will come first, and currently they are showing the R3 as a “very close brother” to the R2.

Rivian’s future is uncertain. The money pile decreases. The factory plans look bleak. But the company remains optimistic even in the face of financial oblivion.

Elon Musk’s Cybertruck could be a vehicle for the end of the world. Rivian’s R2 and R3 ask us to imagine a much kinder and more hopeful future.

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