Yes, things have certainly changed for Rivian and the world since the automaker debuted in the U.S. in 2021 and recorded the largest IPO on the stock market in seven years. One big change is that higher interest rates make financing big purchases more expensive and make buyers wary of buying anything, including new cars.
Conventional wisdom regarding electric vehicles has also changed. Sales data shows electric car makers are making headway among early adopters, high-income groups who tend to get excited about all kinds of new technology. In fact, these are exactly the kind of drivers Rivian has in its sights: weekend warriors with pocket money. But now automakers have to reach regular drivers who aren't patient or tolerant to adapt to new types of cars, much less pay a premium for the privilege. As Scaringe said on a recent conference call with investors, “How do you get the 93 percent of the market that isn't buying EVs to get excited about your product?”
Rivian hopes more affordable options will do some of that work. The new car will cost $45,000, which puts it in line with mid-range EVs like the Hyundai Ioniq 5 and 6, Ford Mustang Mach-E, and Tesla Model 3. It's also close to the average U.S. car transaction value last month. According to Kelley Blue Book, the price is $47,400 for the vehicle with the powertrain.
Still, by the time the R2 starts rolling off the production line in two years, there should be plenty of more affordable competitors. California startup Terror Trucks' compact “urban” trucks designed by Yves Béhar's Hughes Projects could arrive by then. Kia's EV3 may be similar, but it's currently just a concept. Ford is planning to produce a new electric vehicle, the Explorer. Meanwhile, Tesla has announced that it will introduce a new “next generation” car in 2025 with a refreshed platform that could eventually deliver the company's mythical $25,000 price tag.
