By Abhirup Roy
SAN FRANCISCO, March 12 (Reuters) – Rivian will begin delivering its more affordable R2 line of SUVs this spring with a variant priced at $57,990 and roll out cheaper options by 2027, as the electric vehicle maker looks to widen its customer base and take on Tesla’s best-selling Model Y.
Shares of the company were down nearly 4%.
The R2 is seen as critical for Rivian, known for its high-end R1 electric SUVs and pickup trucks, particularly following the expiry of key EV tax credits last year.
A keenly awaited $45,000 variant with over 275 miles of range, expected to significantly broaden Rivian‘s customer base, will also be available by late 2027, the company said on Thursday.
The launch variant is a 656 horsepower dual-motor all-wheel-drive Performance trim that offers about 330 miles of range. Rivian also unveiled a Premium trim of the R2 at $53,990, to be available late this year, and a rear-wheel-drive Standard at $48,490 with deliveries starting in the first half of 2027.
Meanwhile, Premium variants of Tesla’s Model Y start at $44,990, the Performance at $57,490 and stripped-down Standard versions, introduced last year, at $39,990.
TAX POLICY IMPACT
Last month, Rivian said R2 SUV sales would drive a 53% jump in deliveries this year to between 62,000 and 67,000, implying about 23,000 R2 deliveries. It also expects the R2 to drive the bulk of the deliveries in 2027.
But analysts caution U.S. policy changes, including import tariffs on auto parts, removal of EV tax credits and elimination of fines for companies that fail to meet emission standards, have raised prices and hurt sales.
“While Rivian has over a 100,000-unit order backlog for R2, we note that the majority of these orders were likely placed assuming the $7,500 EV credit, with the vehicle now significantly more expensive,” Barclays analyst Dan Levy said in a note on Wednesday, forecasting 16,500 R2 deliveries this year.
The R2 was originally slated to be produced at Rivian‘s new Georgia plant, but the company eventually chose to do so at its existing plant in Normal, Illinois. R2 production will expand to the Georgia facility by 2028.
Hardware for Rivian‘s Autonomy+ driver assistance system is built into all R2 trims, the company said, with the subscription service priced at $49.99 per month or $2,500 as a one-time fee. Lifetime access is included with the launch edition.
In March 2024, Rivian had also teased a smaller, more affordable compact crossover called the R3 alongside the R2.
(Reporting by Abhirup Roy in San Francisco; Editing by Jonathan Ananda)
Comments