It's stylish, roomy, has more horsepower than high-end sports cars and can travel nearly 350 miles before a charge.
The all-new Rivian R2, which was teased two years ago, may defy the current state of the industry, which has seen sales of EVs slump and automakerscancel upcoming models.
Rivian's founder and CEO, RJ Scaringe, is well aware of the EV angst in the market. This R2, he said, could be the vehicle that brings more Americans to the brand and the world of electrification. It has "broad appeal," he told ABC News earlier this month.
With the average price of a new vehicle hovering around $50,000, Scaringe said the R2 meets consumer expectations. It also joins the company's R1S and R1T lineup, with another model, the R3 crossover, in the works.
The first R2 to arrive this spring is the $57,990 Performance with Launch Package trim, which has envious specs: 656 horsepower and a 0-60 mph sprint of 3.6 seconds. The R2 Premium model ($53,990) arrives in late 2026 (450 horsepower, EPA-estimated range of up to 330 miles). The least costly version, the R2 Standard is priced at $45,000 and will be available in late 2027.
The SUV, built at the company's Normal, Illinois, plant, can connect to Tesla's Supercharger network, helping to ease charging anxiety. Scaringe said R2 sales could total 20,000 to 25,000 in the first year, with the goal to "scale up to 150,000 units" as production capacity expands with the 2028 arrival of Rivian's Georgia manufacturing site. Rivian recently announced it's partnering with Uber to launch 50,000 robotaxis in the U.S., an investment of $1.25 billion. The California startup already builds custom electric delivery vans for Amazon and has a joint venture with Volkswagen to provide software and vehicle electrical architecture.
Scaringe sat down with ABC News to talk about the excitement surrounding the R2, the company's profitability challenges and his take on extended-range electric vehicle technology.
The interview below has been edited for clarity.
Q: Rivian is dropping production of its entry level R1 models. Is this because of your new R2 midsize SUV?
A: Yep. The entry level R1 was a way for people to come into the brand at a lower price point. The utility of that model is less necessary now that we have R2.
Q: Why are you launching the high performance R2 model first, especially since you've been teasing a $45,000 model for years?
A: We made the decision to have a launch edition [with a] limited set of colors and one build combination. Everyone is going to want something different, so [we] picked what we thought would make the most people happy -- the people who are most enthusiastic and the earliest adopters. So we launched with the Performance with Premium Package, which we call the Launch Edition. There's so much excitement and demand and it's helpful to us to launch with the version that allows us to ramp up [production].
Q: Who is the R2 customer? Are you expecting current R1S or R1T owners to trade in their vehicles for the R2? Or are these new conquest consumers?
A: They certainly are R1 customers. Because of its price point, R1 is a fairly narrow market. The R2 is sort of everyone. The average price of a new car in the U.S. is around $50,000. The most popular configuration in the U.S. is a midsize SUV. So the R2 is a bulls-eye right in the biggest part of the market. [Customers] could be in Jeep Grand Cherokees, Honda CRVs, Rivians, Teslas, anything. The broad appeal of the product is obviously what we're striving for.
Q: A hot topic in the industry is EREVs [extended-range electric vehicles]. What's your opinion and would you ever consider building one?
A: We would never do one. I think it's an intermediate technology. I understand why some people are doing it. For us, it wouldn't make any sense. It's not consistent with our brand, it's a more complex architecture. I think it will be short-lived.
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Q: Electric vehicle demandhas slipped since the expirationof the federal tax credit. This decline is impacting all automakers. How are you going to get people to buy your EVs when hybrids are so popular?
Q: I talk about this a lot. This is a question of causality. So EV demand in the U.S. is around 8%. Why is it not 20%? We have an extreme lack of choice. This is most pronounced in the U.S., where there are just not a lot of great choices. When I say great choice I mean really well-integrated software, great technology, an EV first architecture.
I think the Teslas are great product but not everyone wants that brand or that look. Tesla has, like, 60% market share. In any business that typically has a singular market share leader, it's not a sign of a healthy, well-served market. It's a sign of an underserved market. So the market is very clearly needing to have something else that is a highly compelling choice that is intentionally not a Tesla.
Most of the non-Tesla EVs that are in that price range are trying to be a Tesla. If you look at the packaging, if you draw a profile of the vehicle from the side ... it's almost the same shape as a Tesla. If you want a Tesla, you should buy a Tesla.
I think the mistake a lot of companies make is [building their] version of a Model Y, rather than saying, Tesla is successful, this is proof that 500,000 to 600,000 people a year buy electric cars. We have a tremendous amount of respect for Tesla but we're not trying to be a Tesla.
Q: Jeff Hammoud, Rivian's chief designer, said customers have asked for buttons for three core functions: fan speed, volume and temperature control. There's a new "Haptic Halo Wheel" on the R2 steering wheel for these controls. Will that roll out to the R1 models and why not just build three buttons to do the core functions?
A: When you're developing something like a car, I would say there are 30 million to 40 million decisions you have to make. We take a really focused approach to make sure all of those decisions are made in a fairly consistent way. By the virtue of the number of decisions, and by virtue of the human mind, not everyone is going to want the same thing. We absolutely are going to make decisions that not everyone will agree with. But it's our job to make decisions we think enough people, or a lot of people, will agree with.
One of those decisions was to be multi-touch heavy. There are people who really want to have a reconfigurable, multi-touch screen. If someone wants a very classic button heavy interior, there are other brands that will probably do that. And that's back to my point about choice. The reason choice is important is because we have desires for differences. The scrolls are our way of creating a mechanical way to interact without resorting to a button.
And the [scrolling] wheel is not coming right away to the R1 models.
Q: Oil and gasoline prices have been spiking since the Iran war. Do geopolitical events get people to consider EVs?
A: In the past, maybe. If you remember, when oil hit $100 a barrel 15 years ago, it did actually change behavior. I think people recognize this is so volatile that it's not changing behavior in the way we once saw. I think that's true in both directions. When [oil] comes down, it doesn't really affect EV demand either. If oil went to $200, $300 a barrel, it would. Society has become mum to the volatility of the world.
Q: The company's profitability has been a core concern of Wall Street analysts and investors. Have your margins increased yet? What still needs to be done to be profitable?
A: So R2 is key for profitability. When we talk about profitability, it's not like we go to bed at night and pray that we're going to be profitable, like we're just hoping it will happen. It's a very planned set of actions.
One of the things that's not understood is that we built a really large engineering team, and we've vertically integrated it in a lot of areas, in ways that would make no sense if the goal of the business was to [produce] 50,000 units a year, basically stay the same size as we are now. But if the goal of the business is to build many millions of units a year, then suddenly you can rationalize this enormous upfront investment. I do think it's important to know when it comes to developing technologies vertically, we're not competing against a vacuum. We're competing against Tesla in terms of technology. This isn't 2010 or 2011 or 2012.
We have to be competing [with Tesla] in terms of capability of technology and I think the best evidence or validation of that thus far has been the Volkswagen partnership. This is the second largest car company in the world. A $5.8 billion deal that was borne out of the fact that we did invest tremendously into technology.
All of that investment on the front end has big fixed costs that makes it harder to be profitable at low volume. When we get to high volume, it creates structural cost advantages.