In a packed theater in Laguna Beach on Thursday morning, Rivian founder and CEO RJ Scaringe began his speech to a roar of cheers from the audience, long before the company unveiled three striking new vehicles Before Rivian R2, R3 and R3X.
While it’s not uncommon for car launches to be packed with fans, it’s unusual for a car company CEO other than Musk to get the kind of response Scarinch did. It’s even rarer to find a vehicle that evokes optimism and excitement at its unveiling without feeling cringeworthy.
“Every decision we make, the product, the strategy, what we’re building, how we build our business, the way we build our teams, the way we think about our culture, is built around this culture that makes the world Always have an adventurous spirit,” Scaringe said.
Throughout his speech, Scaringe kept emphasizing the “forever” part of Rivian’s mission statement, considering the company’s well-documented financial troubles over the past few months, recent rounds of layoffs, and yesterday’s announcement to suspend its $5 billion Dollar’s Georgia plant for an uncertain period of time, which seems somewhat disconnected from the reality companies face today.
It’s not just Rivian. The growth in electric vehicle sales has gone from rocketing to a crawl, with many automakers putting factories, investments and entire model lineups on hold. But Scaringe said it was too late to go back now.
“I can say with absolute certainty that the entire world will move to electric vehicles,” Scarlinger said. edge Following yesterday’s events. “I’ve never been more bullish on electrification. I’ve never been more bullish on Rivian.”
tailwind and headwind
I met Scaringe in a private space above the Rivian South Coast Theatre, where the R2 (and R3) events were held. (The company purchased the theater and restored it in 2023, now using it as a theater and space for corporate events.)
Fresh off the stage after introducing R2 and R3 to the world, he looked energetic, if a little tired. Scaringer, who is vegetarian, chatted with us over slices of peanut butter and jam toast about the tailwinds and headwinds Rivian faces.
“In 2012 and 2013, when I went to meetings and told people we were going to make an electric SUV, people were like, ‘You’re crazy, there’s no market for this,'” he said. “In 2016 and 2017, people thought, ‘Oh, this is going to be a niche thing.'” Today, I don’t think anyone is debating the end state. But I’ve never seen this level of tailwind relative to where I was 10 years ago. “
In today’s economic climate, the mission of “keeping the world’s adventurous spirit alive” is especially challenging. Scarinch noted that high interest rates make capital very expensive for companies like his. Other obstacles include the increasing politicization of the electricity transition and the sparse and unreliable charging infrastructure across the country, particularly in rural and remote areas. Add to that rising geopolitical tensions, and you get the feeling that it could all go off the rails at any moment.
Rivian can solve some of these challenges, but not all. The company will use Tesla’s NACS connector in future vehicles starting in 2025, which will allow Rivian owners to use the company’s Supercharging network. Both the R2 and R3 will have NACS ports built into the vehicle.
Rivian hopes the new R2, which starts at a lower $45,000, and eventually the R3 (whenever it enters production) will help the company lure more people to electric vehicles. Especially if it qualifies for the $7,500 electric vehicle tax credit.
“Seven percent of new car sales are electric vehicles,” Scaringe pointed out. “Unfortunately, everyone wants to talk about electric vs. electric. How does Rivian compare to Tesla, for example? The reality is that Tesla continues to be a huge success and we want to take that from the 93% of people who haven’t switched to pure electric vehicles yet. Stand out because the form factor doesn’t suit their lifestyle.”
Like Tesla, Rivian’s lineup is all-battery electric, with no exhaust pipes. But unlike Elon Musk, Scarinch is losing money on each new vehicle. Currently, Rivian’s losses are estimated at more than $43,000 per R1T, R1S and EDV van produced, according to Rivian’s latest earnings report.
The Normal, Illinois plant is scheduled to close to improve efficiency and prepare for R2 and R3 production. Rivian said in a filing with the SEC that suspending plans to build a plant in Georgia would save the company about $2.5 billion.
Scarinch said he believes three worlds are colliding right now: the lack of choice among EV buyers, the political and policy environment and current global events, which are affecting everything from supply chains to the supply of raw materials for batteries. with wafer.
“We are in a very unique macro moment,” Scarlinger said. “Interest rates are the highest they’ve been in a long time. Global tensions are high on many fronts. The willingness to try new things is more limited. But it won’t be forever. That means you have to make the right trade-offs.”
A brand full of hope
Rivian learned a lot when it decided (perhaps foolishly) to launch and build two new vehicles at the same time, the R1T and R1S. As time goes on, it’s never gotten easier, Scaringe said. The company learned a lot from this experience and found ways to make smart tradeoffs to keep the upcoming R2 at its magic starting price of $45,000.
First, Scaringe said the R2 will be less complex than the R1 vehicle. It won’t come with adaptive air suspension, but a fixed suspension based on what the company learned from the R1 series.
The R2 also won’t get other small comforts, such as the detachable Bluetooth speaker that comes standard on the R1T and R1S. (The flashlight on the door will remain.)
But Scaringer said the R2 is still capable off-road. It will showcase some interesting new features, such as seats that fold flat for in-car camping; a rear lift-up window for storing surfboards; chunky scroll wheels for those annoyed by the lack of physical buttons on the screen; and Spongy glove box – presumably for all the gloves.
R2 also won’t get other small creature comforts
The company also won’t launch the R2 and R3 at the same time. The R2 will be launched first, and they are currently showing off the R3 as a “very close brother” to the R2.
Rivian’s future is in doubt. Its cash reserves are dwindling. Its plans for the factory look grim. But even in the face of financial troubles, the company continues to express optimism.
Elon Musk’s Cybertruck could be the vehicle for the end of the world. Rivian’s R2 and R3 ask us to imagine a kinder, more hopeful future.
