Rivian, the Irvine-based EV maker with a knack for California luxury, finds itself straddling a fine line: wild popularity on one coast, but fierce competition in an increasingly crowded EV landscape. Rivian’s flagship R1S—an SUV priced north of $70,000—doesn’t just hold its own in California; it dominates, capturing over 23 percent of registrations in its class during the third quarter, according to the California New Car Dealers Association (CNCDA). “That’s not just the most popular electric SUV—it’s the most popular SUV,” Rivian’s CEO and founder R.J. Scaringe boasted in yesterday’s (Nov. 7) earnings call. Rivian’s win, to be clear, is over the California luxury sector—not all SUVs. And like most EV makers, the company faces shrinking demand in a market suddenly filled with rivals. In a move for overall market dominance, Rivian hopes to replicate the R1S fervor with their upcoming R2, a more affordable model aiming to bring Rivian’s cachet to a broader market. “We’re hoping to see that level of excitement continue and carry through,” Scaringe said.
Rivian ran into some supplier disruptions during the third quarter due to a parts shortage impacting the Enduro motor used in its R1 vehicles. “This has been a tough quarter for us because of some of those supply chain or supplier ramp challenges,” Scaringe told analysts, adding that he sees the shortage as “really a short-term issue.”
These supplier issues, coupled with a tough EV environment, saw Rivian report lower-than-expected revenue for the third quarter. Rivian reported $874 million in revenue, a near 35 percent drop from last year’s third quarter. While the company produced 13,157 vehicles during the quarter, it only delivered 10,018. In light of the disruptions, Rivian reaffirmed its lowered annual production forecast of 47,000 to 49,000 units for 2024.
The company also reported a negative gross profit of $393 million between the months of August and October, compared to a loss of $477 million in 2023. However, Rivian said it is on track to report a positive gross profit in the fourth quarter, in part due to an expected increase in non-vehicle revenues like regulatory credits and software.
When can we expect Rivian’s R2 model?
Since its founding in 2009, Rivian has been known for producing higher-end luxury vehicles—its R1S SUV and R1T pickup start at around $75,900 and $69,000 respectively. But in March, the company announced plans to begin producing smaller and cheaper electric SUVs. Rivian hopes the R2, priced to capture a more mainstream market, will echo the cult appeal of its flagship, but at a mid-$40,000 entry point. The R2 model is expected to be released in 2026.
The company yesterday announced plans to partner up with battery manufacturer LG Energy Solution, which will provide advanced 4695 cylindrical batteries to the EV maker’s R2 model for five years. The batteries will be manufactured at LG’s Arizona plant and should be lighter and more cost-efficient than the company’s current battery packs, according to Rivian, which told shareholders it expects the update will improve its battery pack assembly process by 45 percent.
The company is hopeful that its upcoming offerings will help bolster a wider transition from gas vehicles to EVs. “There are very, very few compelling options in that sub-$50,000 price range,” said Scaringe during Rivian’s earnings call. “Having spent a lot of time in and around the vehicle, I can say I’ve never been as excited for a product as I am for R2.”
