Experts Weigh In On Rivian's Efforts To Control Costs and Deliver the Mass-Market R2
Rivian has become a more mature company over the years, but with the release of the R2, R3, and R3X, the electric vehicle maker is attempting to transform itself into a mass-market automaker--a target that will require a delicate balancing act of controlling and optimizing costs.
As noted in an Automotive News report, Rivian is expected to see flat production this year at 57,000 vehicles from its Normal, IL factory. Between the first and second quarter, Rivian posted a substantial net loss of $3 billion. The R1T and R1S have been successful, however, with Rivian noting in April that it had built 100,000 of the vehicles since their launch.
Rivian has been working to control its operating costs. In the second quarter, the company took the wraps off its Gen 2 R1T and R1S, which mostly feature under-the-hood improvements that are designed to optimize costs. Such cost-cutting measures are vital for Rivian, especially as the company attempts to ramp the production of its upcoming R2, R3, and R3X crossovers.
Karl Brauer, executive analyst at iSeeCars, noted that Rivian is feeling a lot of pressure to release the R2, its first mass market car. The R2, after all, would be competing in a pretty populated all-electric crossover SUV market, which includes best-sellers like the Tesla Model Y, the world's best-selling vehicle by volume last year.
"Rivian's product line is fresh enough to not need substantial updates, but it's also too expensive to provide meaningful revenue and market share. This puts more pressure on the R2 and R3, which can't arrive too soon," Brauer noted.
Sam Fiorani, vice president of global vehicle forecasting at AutoForecast Solutions, also weighed in on Rivian's current financial situation and why it is pertinent for the company to focus on the R2. "With the company's current cash-flow issues, getting the R2 volume models into production and into consumers' hands should be the priority," Fiorani said.
Robby DeGraff, manager of product and consumer insights at AutoPacific, for his part, noted that he expects Rivian to roll out a refresh of the R1 series around 2027, and a full redesign around 2031. That being said, with their starting price of about $70,000, the R1T and R1S would most likely continue to be low-volume vehicles for Rivian, similar to Tesla's Model S and Model X.
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