Does the R2 actually kill Rivian?

[RoadRunner]

I suspect many prospective buyers in the R1 pipeline really don't want to pay $75-100K for either a tiny truck bed or a third-row that they will never use. Others may be urban dwellers and as facile as the R1 is, it's still a handful on tight city streets and in parking lots with ultra-narrow spaces. Let's face it, if you've waited 3-4 years for a R1 that doesn't quite fit your needs, or budget parameters, the R2 looks very, very compelling at roughly half the price.

I'm one of these for sure. No need for a 3rd row - reserved the R1S Quad motor when it was going to be available with two rows, explore trim, before price hike. I don't really need 4 motors, air suspension, or super fast acceleration. I just want a reliable EV with AWD/4WD that is large enough to sleep in occasionally, charges fast and easily, and can handle snow and some 4WD roads to access trailheads etc. The R1 was always more than I needed.

2+ years later, even with pre-march pricing, $75K+ seems like a lot to spend on a vehicle that is larger than we need and will depreciate fast, when we could just wait for the R2 which will be more efficient, charge faster, have NACS and cost more like $50K. Cost of insurance should also be lower on the R2. I was quoted about $1000/6 months on the R1 which is about double what I'm paying on a new 4Runner.

I'm also assuming Rivian will need to build a lot more service centers in the next 2 years, and we've pretty much decided it's not worth buying an Rivian until they have a service center within an hour or so drive of where we live. Currently it's 5 hours.

So for now I'll likely reserve and R2 and take a wait and see approach...

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[Rivian Head]

R2 is entering into a crowded market; model Y, Ioniq 5, EV6, mach E, Blazer EV,ID4, Fisker and then the Chinese entering the market. They are all very good vehicles, nevertheless they are all hemorrhaging money except Tesla and BYD. Why should investors believe Rivian is different, especially when they will run out of cash in 6 quarters?

 

[PeterSK]

Rivian needs to ramp up the EDV/RC and fleet sales of R1 to grow sales while waiting for the GA factory build and R2 deliveries to get going. The ATT pilot deal is important - it’s not just for vans, but pickups and SUVs as well, that ATT uses as field vehicles.

There are a lot of large and medium sized delivery and service companies that these vehicles should appeal to, to help meet their climate/emissions commitments. Pricing and maintenance/service will be key, but even at lower prices/gross margins they can help generate and maintain production volume to increase revenues and drive down unit cost.

 

[Tahoe Man]

Wait, what? The leaked specs on R2 are awesome (I agree).

Here's the rub.

I suspect many prospective buyers in the R1 pipeline really don't want to pay $75-100K for either a tiny truck bed or a third-row that they will never use. Others may be urban dwellers and as facile as the R1 is, it's still a handful on tight city streets and in parking lots with ultra-narrow spaces. Let's face it, if you've waited 3-4 years for a R1 that doesn't quite fit your needs, or budget parameters, the R2 looks very, very compelling at roughly half the price.

Let's say other folks agree with this take. Potentially a lot of them.

Then, somewhat counter-intuitively, the R2 never comes into existence.

The new plant is Georgia is far from done. Tooling is far from ordered (and paid for) and lines still have to built, configured, tested and dialed-in for production volumes. Then there are testing and certifications to be had, yada yada yada, it's two+ years before R2 hits the road (I'm guessing end of 2026 with the current trajectory, IF Rivian finds the cash to get there).

Ah, cash. R1 demand has already hit a wall and is likely falling. Don't blame Rivian, they are pulling every trick out of the bag - early release of dual-motor, lower capacity (and lower priced) battery variants, introduction of leasing in certain markets, still covering connectivity costs for all vehicles and the impending line updates should take more cost out of the R1 platform creating an opportunity for either additional gross margin, reducing price points, or perhaps a bit of both.

But back to cash.

By my reckoning they have about four quarters of cash on hand once you adjust for working capital needs - as they grow they will have more raw goods on hand, work-in-process inventory and finished goods inventory (in transit and at delivery centers). That does NOT include a build-out of a new facility in Georgia with its own capex and staffing needs years in advance of first revenue.

Back to the premise. If R2 demand is strong, and we'll know more in 2 days or so, then R1 demand may soften even more than Rivian has stated publicly and Rivian will not sell enough R1 vehicles this year (or next) and run out of cash sometime in Q1 or Q2 of 2025. That's at least a year before the R2 launch so it's quite possible that R2 anticipation ends up killing the company absent a large influx (or two) of highly dilutive external cash.

The EV market is getting saturated, that's why Tesla is doing the things they're doing. The 3 and Y y/y growth rate has come down a lot to about 15%.

Personally I wouldn't purchase the R1T, it's not truck enough for me, bed is to small too...then again I'm rural probably unlike most owners. But most of all I wouldn't spend nearly that amount just for a truck.

I think the R1S is very nice, they should have introduced that first and skipped the truck part altogether. But at this point, I'm doubt any of this really matters. It's just very very difficult to form a successful car company, even in the best of times. Without those tarrifs, Rivian has a very dim future.

 

[MidnightRivian]

Here is the R2 in its natural habitat before it gets ready to kill the R1 on reveal day .... /s

 

[R1Thor]

There's information out there from what I'd consider "reliable enough" sources about it being in process. Rivian doesn't have a need to share the information yet but I expect we're going to hear about it sometime in the next couple months. I'd be surprised if it was part of the R2 reveal, but it could be a good time to do it while the hype is there and they have the spotlight.

Those rumors about "the ascent trim" were close, Ascent is the project name of the motors like Enduro was for the dual. Pretty much the extent of the information available.

Would you mind citing your sources?

As far as I'm aware, ONE forum poster 'claimed' that a service tech at a service center told him about the 'Ascent' trim.

Then it turned into the echo chamber effect, wherein multiple sources quoted that post, mostly indirectly.

Then people started quoting the websites to 'prove' the point.

I've not seen ANY substantiated evidence that this has any basis in reality other than people continuing to talk about that one sole claim.

Further, there's already a model vehicle called 'Ascent.' Subaru makes it. Given that Rivian went FAR out of their way to define the marketing model for why they called "Rivian" "Rivian" (and it was to fully differentiate themselves by creating a term no one has ever used before), I find it HIGHLY improbable they'd choose a name already taken by another auto manufacturer for any project.

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