Yes, things have definitely changed for Rivian and the world since the automaker went public in the U.S. in 2021 in the stock market’s largest IPO in seven years. One big change is rising interest rates, which make financing big purchases more expensive and make buyers cautious about buying anything, including a new car.
Traditional ideas about electric vehicles have also changed. Sales data show electric carmakers are making strides among high-income early adopters, who tend to be excited about any new technology. In fact, these are the people Rivian is targeting: weekend warriors with money to spare. But now, automakers must appeal to average drivers who will be impatient and tolerant when it comes to adapting to new cars, let alone paying a premium for the privilege. As Scaringe said on a recent call with investors: “How do we get the 93% of market participants who are not buying electric vehicles excited about this product?”
Rivian hopes a more affordable option will do some of the work. At $45,000, the new car is more comparable to mid-range electric vehicles, including the Hyundai Ioniq 5 and 6, Ford Mustang Mach-E and Tesla Model 3. It’s also closer to the average transaction price for a vehicle in the U.S. last month, which was $47,400 for a vehicle with any powertrain, according to Kelley Blue Book.
Still, when the R2 starts rolling off production lines in two years, there should be plenty of more affordable competition. A compact “urban” truck from California startup Telo Trucks (designed by Yves Béhar’s Fuseproject) may arrive by then. The same may be true of Kia’s EV3, but it’s just a concept for now. Ford is planning to produce a new electric Explorer. Tesla, meanwhile, says it will update its platform in 2025 with a new “next generation” car that could finally hit the company’s mythical $25,000 price point.