Rivian CEO RJ Scaringe reacts at the small R2 SUV launch event on March 7, 2024 in Laguna Beach, California.
Mike Blake | Reuters
Rivian Automotive The company announced Thursday that its important all-electric vehicle, the R2, will go on sale this spring in a special edition model priced at about $58,000.
The first R2 midsize car will be a performance model with a range of 330 miles, dual motors, special attributes and a “Launch Package” that includes “lifetime” access to Autonomy+ advanced driver assistance systems. The vehicle has 656 horsepower and 609 foot-pounds of torque, and can accelerate from 0-60 mph in 3.6 seconds.
Rivian is promoting a cheaper entry-level vehicle starting at $45,000, but said the model, which is expected to be less profitable, will not be available until late 2027. Prices for the company’s current vehicles start at more than $70,000.
The R2 is seen as a critical moment for Rivian after the company has lost billions of dollars and seen demand for its current fleet (R1 SUV, pickup and electric delivery van) decline. Visually, the R2 is essentially a smaller version of the R1 SUV, but the company aims to improve the vehicle’s software, electrical systems and components to make it more efficient and profitable.
Rivian founder and CEO RJ Scaringe promised investors that R2 would be a turning point for the company’s profits, sales and technology. EV makers also aim to launch hands-free and eyes-off driving to better compete with US EV industry leaders tesla.
“R2 is an important transitional vehicle for Rivian’s transformation into a larger automaker, which in turn will help increase operating leverage across the business (including R1),” Morgan Stanley analyst Andrew Percoco said.
Morgan Stanley said it is bullish on long-term demand for the R2, but remains “cautious in the short term” as the company transitions to third-generation electric architecture in new vehicles.
Other companies, including Barclays, have questioned demand for the R2, but Rivian has said it expects it to be based at its current plant in Normal, Illinois, as well as a planned multibillion-dollar factory in Georgia that is expected to produce up to 400,000 cars a year.
“Recent negative policy developments (i.e. $7.5 million IRA credit expiry, regular credit reduction, tariff costs) have increased uncertainty about the R2’s sales outlook, and the R2 is likely to launch at a time of weak U.S. EV demand,” Barclays analyst Dan Levy wrote in an August investor note analyzing potential demand for the vehicle.
In addition to changes in federal regulations, including the end of a federal tax credit of up to $7,500, R2’s launch comes as many automakers pull back on EV plans or post billions of dollars in losses amid slower-than-expected adoption. Analysts also significantly lowered their expectations for market share growth in the coming years.
Scaringe said the company expects the R2 to compete not only with EVs such as the Tesla Model Y, which is the world’s best-selling EV, but also with traditional gasoline-powered vehicles.
The R2 is comparable to the Model Y in many important areas. The size, mileage and acceleration time are also similar. But the Model Y starts at about $40,000 and already offers many of the drive technologies Rivian is trying to achieve with the R2.
“The R2 is an extraordinary vehicle and we believe it will be a game-changer for our customers, our company and our industry,” Scaringe said on the company’s quarterly results conference call with investors last month. “R2 expands on the experience we delivered with R1, with adventure-inspiring design elements and performance, but in a smaller form factor and, importantly, at an attractively lower price point.”
Rivian stock is rising ahead of R2 details, supported by an upgrade from TD Cowen to buy based on a recent detailed study of demand trends for new EVs.
Scaringe told investors last month that 2025 will be Rivian’s “founding year,” while 2026 will mark a “tipping point” for the company.
Rivian’s 2026 guidance includes an adjusted pre-tax loss of $1.8 billion to $2.1 billion and capital expenditures of $1.95 billion to $2.05 billion. This compares to an adjusted pre-tax loss of approximately $2.1 billion and capital expenditures of $1.7 billion last year.
Here are additional details about the upcoming R2 lineup that Rivian announced Thursday:
Spring 2026: R2 Performance and “Launch Package” starting at $57,990. It has all-wheel drive, a range of up to 330 miles, and 656 horsepower and 609 foot-pounds of torque. Late 2026: R2 Premium, starting at $53,990. It includes a dual-motor AWD setup and produces 450 horsepower and 537 foot-pounds of torque, giving it a range of up to 330 miles. H1 2027: R2 Standard, starting at $48,490. It has rear-wheel drive, 350 horsepower, 355 foot-pounds of torque, and a range of up to 345 miles. Late 2027: R2 Standard, starting at about $45,000. The company has released limited details about the model, except that it expects a range of more than 275 miles.
