Rivian bets R2 EV can turn it into a household name like Tesla

PARK CITY, Utah — Rivian CEO RJ Scaringe is energetic as he makes his way through displays for the electric vehicle maker’s new R2 SUV.

The company founder moves quickly from the EV’s suspension and software systems to different models of the R2 that will soon begin to reach American consumers, including a roughly $45,000 entry-level model that Rivian said Tuesday is being pulled ahead from late 2027 to next summer.

But there’s an anxiousness in Scaringe’s voice as he talks to employees and media at the R2 launch event in western Utah and prepares to release the vehicle, starting Tuesday, to the world.

Scaringe founded the EV maker in 2009. He has grown Rivian into a company with a $22 billion market cap that ranked highest in Consumer Reports’ most recent customer satisfaction survey, but lowest in predictive industry reliability due to consumer-reported problems with its early vehicles.

That’s unusual for an automotive brand. Typically, the more problems a brand has, the lower its customer satisfactions rank — but not Rivian.

It’s a testament to the brand Scaringe, a 43-year-old automotive enthusiast and tech entrepreneur, has built. That kind of customer satisfaction is also harder to maintain as a brand grows, which is Rivian’s goal with the R2.

The new SUV is meant to transform Rivian from a niche EV manufacturer that sells luxury vehicles — largely in California and states where electric vehicles sell well — to a more mainstream brand that can not only compete against U.S. EV leader Tesla but with broader mainstream automotive brands such as Jeep and Subaru.

“Its goal is for it to be a high-volume product,” Scaringe told CNBC. “Certainly, we’re going to draw on some Tesla customers, but the market of non-Tesla customers is many, many times larger.”

Wall Street analysts have described the R2 as Rivian’s make-or-break moment, comparable to Tesla moving from its pricey, first-generation EVs to the mainstream Model 3 and Model Y that currently dominate the U.S. market.

Scaringe doesn’t object to such a categorization.

“When you build a company from scratch, everything is make or break. There is no company if things don’t work,” he said. “Saying that it’s ‘make or break,’ it’s like, of course, it is.”

Rivian is also hoping to achieve its main goal with the R2: profitability. The EV maker lost $3.6 billion last year, while only delivering 42,247 vehicles.

After promising investors it would be profitable on an adjusted basis by 2027, Rivian earlier this year withdrew that target without disclosing a new time frame to achieve the milestone. That comes as its automotive segment lost about $6,000 per vehicle it delivered during the first quarter of this year.

Scaringe reconfirmed to CNBC that Rivian now expects to accomplish the target once a multibillion-dollar plant in Georgia ramps up. It’s slated to begin production in late 2028 and could reach its full capacity by the end of this decade.

Scaringe said Rivian will reach profitability on a per-unit production basis with the R2 this year. But he said the company needs more scale than the 160,000 units already planned for the vehicle at its current plant in Normal, Illinois, to achieve gross margin profitability.

“Georgia brings the volume to generate the gross margin for the vehicle sales that covers everything,” Scaringe said. “The good news is we start to really reduce our burn rate. That’s the beauty of volume, and these vehicles all being cash flow positive at a vehicle level.”

Once the Georgia plant is fully operational, the company’s production is expected to include the R1T pickup, R1 and R2 SUVs, R3 crossover, robotaxis and delivery vans. The company also has said it plans to offer additional vehicles based on the R2 platform.

Despite the R2 looking similar to its nearly $80,000 R1S SUV, Rivian said it has cut the vehicle’s build material costs in half, reduced production complexity and achieved other major efficiency gains.

Scaringe said every R2 model — with starting prices ranging from roughly $45,000 to $58,000 — will be cash-flow positive for the company: “This is a requirement. Every single vehicle is gross margin positive,” he said.

That positive cash flow includes its $45,000 entry-level model that the company moved up after facing online backlash for the timing.

Scaringe during a media roundtable said the change was made to address potential perception concerns about the R2 being a more expensive vehicle as well as a “desire to get it out there.”

“As much as the base trim gets a lot of attention, very few people actually end up buying it,” Scaringe said. “It doesn’t affect the economics of the business that much, but it generates so much noise.”

Once full production of R2 is online, Scaringe said, the company expects the sweet spot for sales to be in the low $50,000s, which Cox Automotive reports would put it slightly above the U.S. average selling price of $49,000 and below the average EV selling price of more than $55,000.

That pricing and the vehicle’s size place it in the heart of the compact and mid-size SUV markets, which Cox Automotive reports accounted for 45% of U.S. sales last year.

For EVs especially, the Tesla Model Y dominates in the U.S. Cox Automotive estimates Tesla, which does not report sales by region, sold more than 357,500 Model Y units, or roughly 40% of the U.S. EV market, in 2025.

“I think it’ll do well. Rivian has a strong brand and there’s room for another compelling vehicle, especially in that midsize segment,” said Stephanie Valdez Streaty, director of industry insights at Cox Automotive, which is an investor in Rivian. “It’s not just EV, they’re going to try to compete and pull from [internal combustion engine] vehicles as well.”

Challenges for Rivian remain abundant, Valdez said. In addition to slower-than-expected EV adoption and lack of charging infrastructure, the company also needs to prove it can ramp up production quickly without quality issues.

Of the non-EVs in the segments, the Toyota Rav4 and Honda CR-V lead the compact SUV segment, while the larger Ford Explorer and Jeep Grand Cherokee lead midsize SUVs.

“We want people to look and just say … ‘it’s the best car in that price range,’ and by virtue of that, it’ll draw new customers, non-EV customers,” Scaringe said.

To do so, Scaringe believes, Rivian will also need to become a leader in software and in-vehicle technologies such as automated driving and artificial intelligence.

Rivian received outside validation for its emerging technology efforts in the form of a $5.8 billion deal with Volkswagen that includes putting Rivian’s software and electrical architecture in the German automaker’s future EVs.

Volkswagen is now Rivian’s largest shareholder, followed by longtime backer Amazon, which remains its largest customer for delivery vehicles.

The R2 will launch with an advanced driver-assistance system, or ADAS, that will largely control itself under certain conditions with driver monitoring, but it will not have an AI voice assistant until later this year. Both systems will continue to be updated through over-the-air updates, according to Rivian.

Scaringe said he views the company’s emerging software services as being just as important as the vehicles.

“You need them both. It’s like asking is the heart or the brain more important in a human. You can’t survive without both,” Scaringe said. “It’s a false binary. I don’t see them as separate.”