I’m sitting in the driver’s seat of a preproduction model of the R2, Rivian’s highly anticipated electric SUV, which has more than 100,000 reservations. But before we set off on a cruise around Austin, I need to position the mirrors. Two spinning mechanisms on the steering wheel provide satisfying clicks as they move them. RJ Scaringe, the CEO of Rivian, is clearly delighted. “I just love that,” he says from the passenger’s seat. “It’s enjoyable to ­adjust your mirrors.” 

Most people probably don’t use the word love when talking about how mirror adjustment works, but Scaringe, the company’s 43-year-old founder, is not most people. The R2, the vehicle that underpins Rivian’s future, is full of details like these. Think of them as automotive Easter eggs: a maze on the back of the charging port cover, a mashup of a frog and a skunk hidden under a flap near the front storage space (the “frunk”), a flashlight stashed in the driver’s-side door. Scaringe’s favorite is that the rear glass in the tailgate rolls down all the way with a push of a button, giving passengers a taste of the outdoors from inside the car. 

Buyers will get all of this at a surprisingly affordable price point, too. The starting price for the R2 will be $57,990, compared with the company’s existing vehicles—the R1S, a seven-seat electric SUV, and the R1T, an electric pickup truck—which have an average selling price of around $90,000. And by the end of next year, the company says it’ll offer a model of the R2 for $45,000, putting it in direct competition not just with other electric cars like Tesla’s Model Y, but also with the most popular auto segment in the U.S., midsize SUVs like the Toyota RAV4, the Honda CR-V, and the Jeep Cherokee. 

Because Rivian hopes to sell the R2 in large numbers, it will hopefully do something else that Scaringe would love: get the 17-year-old company on the road to profitability. Plus, it could inject a badly needed dose of coolness and excitement into the EV category, and help Rivian (market cap: about $20 billion) compete as a meaningful rival to Tesla (market cap: over $1 trillion).

As Scaringe preps for his company’s make-or-break launch and the first R2s roll off the production line, he’ll have to manage investors and analysts, keep an eye on a resurgent Tesla, and—if you can believe it—even oversee repairs to a key factory from a spring tornado. A lot is riding on this moment. 

“The stakes are extremely high,” says Jeff Hammoud, the company’s chief design officer. “The R2’s success is vital to Rivian’s success.”

The R2 represents Rivian’s inflection point

It’s January in Normal, Illinois, and I’m walking toward a sprawling assembly plant the company built just to produce the R2. “If you had come here last year about this same time, this would have been completely dirt,” says Krishna Bandaru, the company’s VP of manufacturing engineering. The new, 1.1 million-square-foot facility that sprang up where that dirt was sits adjacent to Rivian’s existing vehicle plant, which is 4.5 million square feet.

In the main assembly plant, Scaringe takes a moment to stand near the end of another production line. For Rivian, the R2 is the inflection point for scale, he says. The company, which is headquartered in Irvine, California, employs some 15,000 people; its automotive revenue was $3.8 billion last year, which includes earnings from its Amazon delivery vans and flagship products, the R1T and R1S. 

Not far from where he stands, one of those pricey R1s sits at the front of the line, its shiny white paint reflecting the lights above. The R1s on the market today have earned reputations for being fun to drive and powerful—you can buy a version of either model that boasts four motors and over 1,000 horsepower, which is oodles more giddyup than most people need for their outdoor pursuits, but it’ll cost you over $115,000. Think of these vehicles as a bit like Land Rovers, but American-grown, all-­electric, and granola-friendly. 

Ed Kim, president of AutoPacific, an automotive research firm, calls the R2 the company’s most crucial product, getting Rivian “into mainstream volumes, at mainstream price points.” The R2’s most obvious competitor among other EVs, he says, will be the Tesla Model Y.

Compared with the R1’s, the cost of the R2’s parts and materials is roughly half, Scaringe says, as are logistics and assembly expenses for each R2 unit. “The whole product has been architected to deliver the Rivian brand experience, but to do it in something that costs us far less to make,” he says. “The religion of the R2 has been cost.”

It helps that the R2 is smaller than the R1. It has a simpler underlying structure—instead of being what’s known in the auto industry as a body-on-frame vehicle, it has a unibody construction. It has fewer welds, and it weighs nearly a ton less. The suspension is simpler and less expensive, and the R2 has much less wiring than the most recent version of the R1—about 2.3 miles’ worth. But, though “the cost comes down by more than half, the price doesn’t come down by more than half,” Scaringe says.

Producing a relatively affordable EV in high numbers might eventually let Rivian do something it’s never done before: sell vehicles for more than they cost to make, and get its automotive business to a reliable profit. Last year, Rivian lost about $3.6 billion, and the company’s auto segment alone lost $432 million. Rivian notes that if you exclude the costs of depreciation, amortization, and stock-based compensation (big ifs), vehicle sales did make money in the second half of last year. 

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