October 6, 2025 - A Rivian Update

This is the Telemetry Transportation Daily for October 6, 2025, and I'm Sam Abuelsamid, Vice President of Market Research for Telemetry.  

Earlier today, at an event hosted by the Automotive Press Association at Rivian's Plymouth, Michigan tech center, CEO RJ Scaringe provided a number of updates on the company's progress. When Rivian first started delivering its vehicles and then had an IPO in 2021, there was a lot of optimism for the company. Prior to going public, Rivian had raised $10.5 billion and another $12 billion from the offering. Rivian's biggest shareholder was also Amazon, which has very deep pockets. This should have given the company plenty of runway to get production of the R1T and R1S ramped up and hopefully approach profitability. Unfortunately, sales and production haven't met expectations, and costs have remained high, leading to multi-billion dollar annual losses and cash down to $4.8 billion as of June 2025. 

However, Rivian got a huge boost last year from a new partnership with Volkswagen Group to provide its electronic architecture and software platform to the German automaker. Starting in 2027, the new $22,000 ID1 is the first of more than 30 models from VW Group brands scheduled to get this electronics and software package by the 2030s. 

But the key to Rivian's survival as a carmaker will be the launch of the new midsize R2 electric SUV, which is slated for the first half of 2026. Rivian has expanded its Normal, Illinois, plant by 2 million square feet to accommodate the R2, and a smooth launch will be critical. The starting price is $45,000, and Rivian can no longer rely on tax incentives to help offset the cost. Scaringe doesn't think this will be a problem because Rivian has focused on trying to make a compelling product that appeals to customers regardless of the powertrain. While three-fourths of R1 buyers have been new to EVs, the average selling price of over $90,000 means that most have been affluent early adopters. The R2 will have to compete much more aggressively with combustion and hybrid offerings from many automakers, and there is already a lot of EV competition along with fuel-burning alternatives.  

There's a lot of interest in the R2, but despite building all of its vehicles in the U.S., Rivian also has the challenge of an administration in Washington that has heavily politicized electric vehicles and is doing everything it can to undermine them. The next 12 to 18 months may be make-or-break for Rivian as an automaker, and if the R2 doesn't succeed, it may have to retrench and focus on selling its software.

Thanks for listening.