Rivian, the electric vehicle (EV) manufacturer, is gearing up to expand its brand reach with the introduction of its more affordable R2 electric SUV. Ahead of the R2’s official debut, Rivian’s CEO RJ Scaringe identified $48,000 as an “important sweet spot” for buyers transitioning from gas vehicles. He also positioned the upcoming R2 as a competitor in the same market segment as Tesla’s popular Model Y.
In an interview with Forbes, Scaringe outlined Rivian’s ambitions to tap into the mass market. “The average transaction price of a vehicle, any vehicle in the United States, is around $48,000,” he noted. “We think that’s a really important sweet spot, to be in that range, to create a viable option for customers that are coming out of combustion-powered vehicles.”
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Competitive pricing has become increasingly crucial, especially with price reductions from industry leaders like Tesla putting pressure on others to adjust. Earlier today, Ford announced price cuts for the Mustang Mach-E and new incentives for the Lightning electric pickup.
Rivian recently introduced new Standard battery pack options for its R1T and R1S models, lowering the starting prices to $70,000 and $75,000, respectively.
Data from Cox Automotive indicates that the average price of an EV at the end of 2023 was $50,798, just $2,040 higher than the average gas-powered vehicle at $48,795. Tesla’s average transaction price was even closer at $50,051.
Scaringe emphasized the need for more diverse EV offerings. “Products available in the market today cover a very small subset of the segments,” he said, referring to both price and form factors.
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Addressing the reported “slow down” in EV demand, Scaringe attributed it to “more a reflection of a lack of product choice.” While confirming that the R2 will be smaller than the R1S and qualify for the $7,500 EV tax credit, Scaringe did not provide further details.
He expressed confidence that the R2 would embody “the essence of what makes a Rivian a Rivian” in a smaller, more affordable package, positioning it as a direct competitor to Tesla’s Model Y.
