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In the world of electric vehicles, Tesla might be the giant, but it’s not the only player in town. Names like Rivian want to chase down Tesla's dominance in the EV space. As one of the biggest brands in the electric world, Rivian’s announcement about five new vehicles is giving current customers and those looking for a new EV model something to look forward to.
Rivian has always planned to move beyond the R1T and R1S, and now the company is discussing how this will become a reality. The move is reminiscent of how Tesla went beyond the Model X and Model S and introduced less expensive models with the Model Y and Model 3. Rivian is doing the same thing with a smaller SUV and likely a compact van, sedan, and wagon, which the company hopes will help it expand significantly in the EV world, bringing additional profits.
24/7 Insights
- Rivian will introduce at least five new vehicles in the coming years.
- The first model, the Rivian R2, will be available to customers in 2026.
- Updates to the R1T and R1S are coming in late 2024.
- Also: Discover "The Next NVIDIA"
Why Is This Important?
Rivian is looking to take on Tesla for the EV throne.
The automobile industry is at the top of 24/7 Wall St.'s minds. Not only are car brands among our top articles for coverage, but they are also big market movers. This story is a double whammy when you consider how Rivian's introduction of new models will impact other manufacturers. It is also likely to be Rivian’s only effort to grow outside Tesla’s shadow or disappear forever.
1. New Vehicles Are Coming
Rivian plant rolling out new cars after re-opening during COVID.
- Takeaway: Rivian’s documentation shows new models are coming.
To stay competitive, Rivian couldn’t just stick with its existing two models. It has to expand. As a result, the company is introducing at least five new cars in the next few years. They are billing these launches as “Midsize Platform” cars compared to the R1S and R1T, which are on the higher end of the market. Billed as the R2, R3, and R3X, these cars were first introduced in early 2024. The R2 will be first, but those looking to throw money at Rivian shouldn’t expect to see the first models hit the street until the first half of 2026.
2. Expanding Beyond the R1T and R1S
The R1T and R1S have been a hit, but Rivian must consider what is next.
- Takeaway: Rivian is putting its models into four unique boxes.
As part of Rivian’s expansion plans, it’s putting its vehicles into four separate categories. The first is Gen 1, which is essentially its existing model lineup plus an electric panel van used by Amazon. The second is Gen 2, which is Rivian’s long-planned updates to the R1T and R1S, plus a third model that is still a mystery. The third category is its “Midsize Platform,” which will be the architecture that will support the R2, R2, and R3X. Last up is the “Affordable Mass Market,” which remains a complete mystery, though it’s expected to have three separate vehicles.
3. Volkswagen Investment
The Volkswagen investment is a huge cash infusion for Rivian.
- Takeaway: Volkswagen's $4 billion investment gives Rivian some breathing room.
With a $5 billion investment from Volkswagen Group, Rivian is well-positioned to deliver on the promises of its roadmap. The initial investment of $1 billion is in unsecured convertible notes that Volkswagen can convert into equity from Rivian. The other $4 billion will be broken up into two parts. The first $2 billion will be used for conversion into Rivian shares, while the other $2 billion will be specific to the joint venture. The entire deal is expected to be closed and finalized by the fourth quarter of 2024, but the key is that this investment gives Rivian a strong runaway of funding to continue with its roadmap plans.
4. R2 and R3 Models
The R2 and R3 models will be critical if Rivian wants to grow.
- Takeaway: Rivian is pinning a lot on the launch of the R2 and R3 models.
Rivian hopes that introducing the R2 and R3 models will better appeal to a larger group of people. The goal is to bring the same level of performance from the R1S and R1T but do so at a price point that is far more attractive to the mass market. With the R1S and R1T starting at right around $70,000, these models are out of line for most buyers who don’t need the latest and greatest in the electric vehicle world. Intending to introduce the R2 at around a $45,000 price point, there is significantly more attention at this price point, especially if Rivian can deliver on range promises.
5. Mirroring Tesla’s Success
Rivian hopes to mirror Tesla's success with Model Y.
- Takeaway: Rivian can mirror Tesla’s success if it's smart.
While Tesla was undoubtedly successful with the Tesla Model X and S, the company's success went into the stratosphere with the Model Y and Model 3. Today, the Model Y is the best-selling electric vehicle in the US and the best-selling vehicle, period. The lower price tag of the Model Y compared to the Model X and S allows far more buyers to jump into a Tesla vehicle without worrying about breaking the bank. If Rivian can deliver something similar with the R2, it will likely mirror Tesla’s success by grabbing a new market of buyers priced out of the R1S and R1T.
6. Predicted Compact EV Truck
There is hope that Rivian will have a smaller pickup truck.
- Takeaway: It’s unknown if Rivian will introduce a compact EV truck.
At least for now, there is little more than speculation about whether Rivian will make a compact EV truck. Ultimately, any model would likely be a compact R1T, something like an R2T, but there is no definitive evidence this will happen anytime soon. For the moment, Rivian is being tight-lipped about whether something will happen, but if there is enough demand, the company might have to act and release something that is more pickup than SUV.
7. Predicted Compact SUV Model
The predicted R3X model is going to be big for Rivian.
- Takeaway: The Rivian R3X is a beautiful compact SUV model.
If there is any belief that Rivian will release a compact SUV model, it’s very likely the R3X can fit the category. Billed a more rugged model of the R3, pricing is expected to be around $45,000, around $5,000 more than the $40,000 price tag the R3 is expected to launch with. Ultimately, the R3X will likely have around 300 miles of range and a fast charge from 10 to 80 percent in 30 minutes. As the R3X is expected to be built on the same vehicle platform as the R2, it should cut down on production costs overall, meaning it should cost less. Last but not least, we know the R3X will come with a tri-motor configuration and will ship with a North American charging standard port.
8. Speculation Abound on Sedan and Wagon Models
There is a lot of hope that Rivian can transfer its SUV strengths over to a sedan.
- Takeaway: If Rivian wants to compete with Tesla, it has to introduce a sedan.
If Rivian wants to follow in Tesla’s footsteps, it will need a sedan to compete. While there is no question sedans are less popular today than they have been over the last few decades, they are still selling in huge numbers. Suppose Rivian can deliver a competitor to the Model 3. In that case, there is every expectation that it will help increase its market share and attract buyers who don’t want a compact SUV. The same can be said for a potential wagon model, another vehicle Rivian has yet to provide any true hints on.
9. The Compact Van
Rivian's deal with Amazon can lead to other large commercial agreements.
- Takeaway: Rivian has not yet confirmed a compact van exists.
While Rivian has already introduced its EV van with Amazon, there is plenty of speculation it might release a more compact model. This would be great for companies that don’t need Amazon's cargo space but still want the benefits of an EV van that doesn’t require frequent gassing. Rivian hopes to have around 100,000 commercial vans on the road by 2030 with Amazon, but it can likely deliver many more if it offers multiple sizes for varying business needs.
10. Move to Mass Market Vehicles
If Rivian can price new vehicles affordably, it can grab easy market share.
- Takeaway: Rivian is aiming to deliver an inexpensive vehicle.
The secrecy surrounding Rivian’s move to mass-market vehicles is interesting. With the R2, R3, and R3X expected to cost around $45,000, there is plenty of speculation about how low Rivian will price a mass-market vehicle. If Rivian can deliver an EV with a strong range under $35,000 or $30,000, it will have an immediate advantage over Tesla and other EV brands. Right now, the below $30,000 price is a sweet spot for converting ICE owners to EVs, but very few companies are playing in this space.
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