By Chris Kirkham and Abhirup Roy
LAGUNA BEACH, California (Reuters) -Rivian on Thursday unveiled its smaller and cheaper R2 SUVs and R3 crossovers amid a slowdown in demand for EVs and likewise mentioned it will begin producing the R2 at its present facility to hasten deliveries within the first half of 2026.
Rivian shares had been up 11.5% at $12.30 on Thursday afternoon.
The R2’s beginning value of $45,000 is properly under the corporate’s flagship R1 SUVs and pickups. The brand new car is seen as important to Rivian’s success amid a pointy slowdown in EV demand on account of excessive rates of interest. Electrical automobiles are usually dearer than gasoline-powered automobiles.
Rivian had beforehand deliberate to provide the R2 – a five-seater model of the automaker’s bigger R1S SUV with greater than 300 miles (483 km) of vary – at a yet-to-be-constructed $5 billion plant in Georgia.
However some analysts have questioned the necessity for constructing the manufacturing unit amid slowing demand for EVs.
Rivian had beforehand mentioned solely that the R2 would launch in 2026, with out specifying when, however on Thursday it mentioned by beginning manufacturing in Regular, Illinois, it was accelerating its timeline to the primary half of the yr.
“We’re capable of obtain that accelerated timing by leveraging our manufacturing capabilities in Regular, utilizing our Illinois web site to launch R2 and get that into market as rapidly as we are able to,” CEO RJ Scaringe mentioned.
Rivian mentioned the choice to provide the R2 in Illinois would assist the corporate minimize the quantity of capital wanted and scale back danger.
“This actually takes some stress off the continued large money funding wanted for the Georgia plant,” Vitaly Golomb, a Rivian investor and an electrical and autonomous mobility professional. “I’d additionally hope that they’re being conservative and can be capable of pull ahead the supply dates even additional.”
The transfer will assist the corporate save greater than $2.25 billion, it mentioned, including that it had ample capital to fund operations by way of the launch of the R2.
The Illinois plant, the place Rivian additionally makes its electrical supply vans, can produce 150,000 automobiles a yr, a Rivian spokesperson mentioned. With the addition of R2, Rivian mentioned it anticipated whole annual capability of 215,000 models on the plant.
The deliberate facility in Georgia “stays an especially necessary a part of its long-term technique,” the corporate mentioned.
Rivian produced 57,232 automobiles final yr and mentioned development this yr can be flat because it tackles slowing demand and a number of weeks of manufacturing downtime to make upgrades supposed to chop prices and enhance margins.
Regardless of the immense reputation of SUVs and pickups in america, ramping up manufacturing and producing demand past the preliminary wave of fans has been an uphill battle.
Providing reasonably priced EVs at scale is seen as key to attracting clients nonetheless unwilling to change over from their cheaper gas-guzzling automobiles.
In a shock transfer, Rivian additionally unveiled its R3 crossover and a extra highly effective R3X variant on Thursday. The R3 will price lower than the R2 and launched after that car. The corporate didn’t disclose every other particulars.
A crossover refers to a car constructed on a automotive platform however with elevated trip top and talent to deal with tough terrain like an SUV.
(Reporting by Chris Kirkham in Laguna Seaside, California, and Abhirup Roy in San Francisco; Further reporting by Zaheer KachwalaEditing by Matthew Lewis and Lisa Shumaker)
