Finance vs. Lease the R2 -- the math

[mkg3]

Just yesterday, I filled the tank on one of my vehicles. Last month, I paid $6.59/gal, and yesterday was $5.19/gal in SoCal.

That;s a price down by $1.40/galor or roughly 21% in 3 weeks.

At this rate, CA gas will be back in the $4/gal range, just like it was before the Iran conflict within another month. That would be pretty quick. I don't know about the rest of the country but this is a data point.

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[R2D2TOO]

This is correct. Leasing with the intent to buy out is tough in Texas because of this tax situation. You'd need a good incentive that covers the double taxed portion and then some for it to be better than financing.

Unless somethign changes dramatically., I have decided I will just pay cash. My trade will cover a bunch - probably near half - and reduce my sales tax amount pretty siginficantly. Nothing else makes sense in my situation.

 

[Jeremy3292]

Are they?

Still pretty high.
Global reserves have been largely depleted.
There is a huge gap in the market from the closing of Hormuz.
I hope you are right because it causes everything to be higher priced.
But I have my doubts. This will take many months to rebalance, even assuming Iran is over.
I have my doubtd about that too.

I explained it already in the below (above) post. Gas prices lag crude oil prices; crude prices are the best indicator obviously of future gas prices. Your graph also is only the last year when gas prices were low. Expand the graph out to 5 years:

www.oilprice.com

Brent and WTI have retreated heavily over the last few weeks from their highs of $110ish down to $80ish today. Pre-war they were in the $65ish range and that was when gas was cheap.

They hit $110 in 2022 also, and then were in the $80s and $90s in 2023 and 2024. Only started getting into the $70s and $60s last year. So $80 a barrel is pretty "normal"

 

[fratpack]

I'm in Naples and haven't tinted my glass. My cars are white. I find that the only time my R1 really heated up was at high noon. I clipped in a sunroof liner ($50). I really wish sunroof delete was an option. I would actually pay more not to have one.

Yeah.. so the factory tint does not reflect the heat. Your best bet would be to get that ceramic maximum heat reduction tint. That is the only option for me. We should not have to clip on a sunshade to the glass on a $60K vehicle. You live in Florida so you know there are tint shops everywhere. The ceramic tint that is being offered by XPEL seems awfully high and you can probably get it done much cheaper. What I usually do is call a BMW dealership near you and ask what tint shop they use. Just make sure you get the maximum heat reduction film that can block 99% of the heat. The tint does not have to be dark, they even make ckear tint that does the same thing. One more thing if you don't mind me asking, how much is it to insure the R2? Thanks.

 

[Jeremy3292]

Yeah.. so the factory tint does not reflect the heat.

It actually does. It has aluminum coating in it to reflect UV and IR, per Max Koff Chief Engineer.

19:05 minute mark

 

[fratpack]

Even Leasehackr is suggesting we should buy the R2 outright.

Yeah, they’re definitely incentivizing buying over leasing at this point. Demand is high, which is great for the company. I’m going to wait until next Spring when the majority of trims are released and some of the bugs have been worked out. Leasing a Standard or even a Premium model should be much more reasonable ($500-$600 a month?)

That is exactly what I am going to do. That lease rate is way to high as is the financing APR rate. They want everyone to finance so their won't be a huge influx of lease returns in 3 years, thus adding highly discounted R2's, which will effect their new car sales. Rivian also has to realize that the competion is getting fierce. One example: Subaru is offering their Top of the line, similar in size Trailseeker for $48,800. with 0% financing for 72 months. They are also offering a $445 lease on their premium version with $3095 down. Albeit the R2 is in a different league with the build quality amenities, I still think rivian should lower their rates.

 

[dleepnw]

I’m in the same boat. Wondering what the numbers would look like for the Premium and Standard R2 trims. My lease is up at the end of 2027, but R3X won’t be available until the end of 2028 at the earliest, according to RJ. And that all hinges on how well the R2 does and how quickly they can get the Georgia Plant up and running.

We also don’t know what the R3X will cost. If it’s tri-motor it’s not going to be cheap. Remember there’s already a $13K difference between the cheapest R2 Standard (single-motor) and the most expensive R2 Performance Launch Edition (dual-motor). There might also be an R2X In store with a tri-motor.

Rivian will have to be really careful when pricing the R3, so it doesn’t cannibalize the R2. They also don’t want to Osborne the R2 with talk of the R3, hence the vague responses.

When the R2/R3/R3X was revealed, RJ said the R3 would start around $10k cheaper than the R2. Since the R2 has pretty much remained exactly priced as they said 2 years ago, I'd guess the R3 pricing will be accurate and will start around $35k. If we scale up the R3 Premium and Performance similar to the R2, thats $44k and $48k. I'd guess the R3X would start around $52-$53k.

 

[Gen(R3)Xer]

That is exactly what I am going to do. That lease rate is way to high as is the financing APR rate. They want everyone to finance so their won't be a huge influx of lease returns in 3 years, thus adding highly discounted R2's, which will effect their new car sales. Rivian also has to realize that the competion is getting fierce. One example: Subaru is offering their Top of the line, similar in size Trailseeker for $48,800. with 0% financing for 72 months. They are also offering a $445 lease on their premium version with $3095 down. Albeit the R2 is in a different league with the build quality amenities, I still think rivian should lower their rates.

Yeah, definitely. Toyota/Subaru seems to be taking EVs a little more seriously these days and they’re priced competitively. I honestly hope they do well, because without competition the buyer always loses.

I think one of the things that Rivian is hung up on is that they want to continue to sell their R1 line. If I were them I would go all in on the R2 and just let it cannibalize the Gen 2 R1T/S. Then a few years down the road, after the release of the R3, turn around and release a Gen 3 R1T/S that has all of the upgrades from the R2 and then some starting at a more reasonable price. That way you could potentially upsell all of your R2 owners who need more space, more capability, etc.

Or there’s always the option of an R2X along side the R3X to capture more of the upscale market while staying on the same platform. There are many ways Rivian could go, but I hope they chose wisely and continue to grow, expanding into markets like the UK and Europe where EVs are really taking off.

 

[Jeremy3292]

How much do we think R2X will be? $70k? Very pricey. R1 territory.

 

[DuoRivian]

How much do we think R2X will be? $70k? Very pricey. R1 territory.

Let’s say tri motor R2 is $70k with an upgraded interior (like ascent) that is still $8k cheaper than base R2 with more range, faster and potentially a higher quality interior so there will be some market for that.

 

[Eric9610]

How much do we think R2X will be? $70k? Very pricey. R1 territory.

I have a bold prediction... R2 will not have a tri motor version and the R3X will be a dual performance model.

 

[R2D2TOO]

I explained it already in the below (above) post. Gas prices lag crude oil prices; crude prices are the best indicator obviously of future gas prices. Your graph also is only the last year when gas prices were low. Expand the graph out to 5 years:

www.oilprice.com

Brent and WTI have retreated heavily over the last few weeks from their highs of $110ish down to $80ish today. Pre-war they were in the $65ish range and that was when gas was cheap.

They hit $110 in 2022 also, and then were in the $80s and $90s in 2023 and 2024. Only started getting into the $70s and $60s last year. So $80 a barrel is pretty "normal"

Yes, you did explain. And assuming the very recent direction continues for a while, you might very well be justified in describing the price of gas as “tanking” at some point. However, your 5 year chart shows it to be a high price - one that is exceeded only back in peaks during a few months 2022. So it is not “tanking” as of yet, but the current direction is a good one. That is has retreated is a more accurate description.

Again, I hope you are right. But as of now the price of gas is still high, issues in supply still exist, and stability in the strait is far from guaranteed.

 

[DuoRivian]

I have a bold prediction... R2 will not have a tri motor version and the R3X will be a dual performance model.

That’s bold as R3X was thought to be tri motor. We will see in a couple of years time.

 

[Gen(R3)Xer]

When the R2/R3/R3X was revealed, RJ said the R3 would start around $10k cheaper than the R2. Since the R2 has pretty much remained exactly priced as they said 2 years ago, I'd guess the R3 pricing will be accurate and will start around $35k. If we scale up the R3 Premium and Performance similar to the R2, thats $44k and $48k. I'd guess the R3X would start around $52-$53k.

I’m not sure how they’ll price the R3X. They won’t want it to eat into higher trim R2’s right away and if the R1S Dual vs R1T Tri is any indication there will be a significant markup.

 

[Eric9610]

That’s bold as R3X was thought to be tri motor. We will see in a couple of years time.

You have to think everything on the R3 will be 1 tier down. It is bold but info has not been confirmed, and I think it's an extreme niche segment. If an R2 P has only say 20k volume, then a tri motor is maybe 10k or less.

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