Rivian's $45,000 'Tesla Killer': RJ Scaringe's Biggest Bet Yet

Forbes

The Rivian founder and CEO expects the small SUV R2, priced from $45,000, to be fully competitive with Tesla’s top-selling Model Y when sales begin early next year.  Read the full story on Forbes:  https://www.forbes.com/sites/alanohnsman/2025/10/20/rj-scaringe-is-betting-his-new-electric-suv-will-make-rivian-the-next-tesla/  Subscribe to FORBES: https://www.youtube.com/user/Forbes?sub_confirmation=1  Fuel your success with Forbes. Gain unlimited access to premium journalism, including breaking news, groundbreaking in-depth reported stories, daily digests and more. Plus, members get a front-row seat at members-only events with leading thinkers and doers, access to premium video that can help you get ahead, an ad-light experience, early access to select products including NFT drops and more:  https://account.forbes.com/membership/?utm_source=youtube&utm_medium=display&utm_campaign=growth_non-sub_paid_subscribe_ytdescript  Stay Connected Forbes newsletters: https://newsletters.editorial.forbes.com Forbes on Facebook: http://fb.com/forbes Forbes Video on Twitter: http://www.twitter.com/forbes Forbes Video on Instagram: http://instagram.com/forbes More From Forbes:  http://forbes.com  Forbes covers the intersection of entrepreneurship, wealth, technology, business and lifestyle with a focus on people and success.

Transcript

00:00Today on Forbes, RJ Skaringe is betting his new electric SUV will make Rivian the next Tesla.

00:09Rivian has had a rocky time since it began selling electric vehicles in 2021.

00:14It missed initial volume goals, leading to back-to-back years of weak sales.

00:19Then there have been post-COVID parts shortages, inflation, and steel and aluminum tariffs.

00:25And now, it's facing a federal administration that's no fan of EVs.

00:31But CEO RJ Skaringe says he's more optimistic than ever ahead of the company's next major product launch,

00:39the R2 small electric SUV that will go head-to-head with Tesla's top-selling Model Y.

00:45He told Forbes, quote,

00:47Rivian is starting up production of the R2, which will be tens of thousands of dollars cheaper and smaller

01:03than Rivian's current R1S SUV and R1T pickup, with US sales to begin in early 2026.

01:11It's priced from $45,000, which is below the current average selling price for all new U.S. vehicles.

01:18Rivian will have the capacity to build more than 160,000 R2s annually at its normal Illinois factory

01:25that currently makes its R1 models and EDV commercial vans that Amazon and other companies use.

01:32Aside from being priced in line with the top-selling U.S. small crossover category,

01:36Skaringe says the R2 will stand out for both its tech inside the cabin, 300-mile range,

01:43and ability to actually handle off-road driving.

01:46After the challenges of the last few years, it needs to be as good as he claims, and a hit with consumers.

01:54Ed Kim, president and chief analyst for industry researcher AutoPacific,

01:58said that it's Rivian's, quote, make-or-break vehicle.

02:01The R1 SUV was a big and expensive statement piece and an introduction to the brand, but R2 is critical.

02:09I would say the company's survival depends on the success of R2 as its volume model.

02:15Tesla's Model Y has been its core moneymaker and ranks as the world's best-selling EV.

02:20In the U.S. this year, through the third quarter, Tesla has sold more than 265,000 units of this small crossover,

02:27aided by a spike in sales after the Trump administration phased out a $7,500 tax credit last month.

02:35In the electric crossover space, Y's closest competitor is GM's Electric Equinox,

02:40which racked up 52,000 U.S. sales through September, less than a fifth of its volume.

02:46Rivian's big bet on R2 comes at a tricky time for the U.S. EV market.

02:50Last quarter, car buyers rushed to get the federal discount before it went away,

02:56leading to a surge in sales of battery-powered models, which could eat into future demand.

03:02Big automakers such as General Motors are tweaking their EV plans for now.

03:06Nissan and Honda are discontinuing some electric models,

03:10and Ford CEO Jim Farley said U.S. demand for battery-powered autos

03:14could drop by half with the end of federal incentives.

03:17Skirinj thinks this will separate the companies that are all-in on EVs

03:22and those that sold them to comply with federal emissions and fuel efficiency rules,

03:26which the Trump administration has weakened.

03:29Going forward, he said,

03:31large automakers that offer deeply discounted leases to maintain sales of electric models

03:35that weren't compelling are, quote,

03:38just not going to build EVs.

03:40He added, quote,

03:41The benefit of that to us, and I'd say equally to Tesla,

03:45is that the market will start to behave more naturally.

03:48You won't have $19 lease deals on vehicles

03:50that just create downward pricing pressure on everybody.

03:55The five-passenger R2, unlike the Model Y,

03:58is designed to look and perform like a more traditional SUV,

04:01with a more squared-off body and higher ground clearance,

04:05along the lines of Ford's Bronco or the Land Rover Defender.

04:08Like the R1 models, it has the company's distinctive convex-shaped headlights

04:13reminiscent of Japanese anime characters.

04:17It will also have upgradable software for future improvements

04:20to the infotainment system and other features.

04:23Skirinj said that Rivian's in-house software tech

04:25is a strength among automotive competitors, and, quote,

04:29It's that platform that we licensed as part of the $5.8 billion deal we did with Volkswagen.

04:34Announced in 2024, the deal includes the formation of a joint venture

04:39in which Rivian-developed software-EV-specific electrical architecture

04:43is to be used in new models across VW's multiple brands.

04:48For full coverage, check out Alan Owensman's piece on Forbes.com.

04:54This is Kieran Meadows from Forbes.

04:56Thanks for tuning in.

Category

Transcript

Be the first to comment

Recommended