Great News for Rivian Investors

Despite the narrative that start-up electric vehicle (EV) makers are struggling, and that the EV growth rate in the U.S. has slowed, Rivian Automotive (NASDAQ: RIVN) continues to tally up positive developments. Edmunds.com named the R1T launch edition its favorite EV among start-ups . What's more, Rivian inked a joint venture deal with global automaker Volkswagen for up to $5 billion , and it topped second-quarter delivery estimates.

But as investors turn to the next step in the company's vision, the launch of the R2, some great news has just been announced.

Come one, come all

Rivian's first-generation R1T electric truck and its R1S electric SUV helped to promptly put the EV maker on the map. The vehicles were not only well received by critics and customers, but both quickly went into production by the thousands and were delivered with few hiccups.

That said, it's become fairly clear that there are fewer and fewer early adopters to rope in for incremental sales, especially at the high end of the EV market, which is saturated with high-priced options. People are begging for a more competitively priced and affordable EV. That's where Rivian's R2, which is expected to launch in the first half of 2026, comes into play.

The good news is that the R2, which starts at $45,000 and is roughly half the cost of its R1S and R1T at $74,900 and $69,900 respectively, is already drawing in buyers at a rapid rate. During Rivian's third annual "Family and Friends Day" at its Normal, Illinois plant, Tim Fallon, the Vice President of Manufacturing, said that pre-orders are already well over 100,000.

Rivian's CEO had previously stated that the R2 logged over 68,000 reservations in less than a day after the company unveiled the R2 in March, and that the reservation number has climbed organically to what it is today.

Rivian is already taking steps to prepare for this anticipated surge by upgrading its Normal plant to increase production efficiency by 30% and boost plant production capacity to 215,000 units annually, up from roughly 150,000. The R2 is expected to make up the majority of that future production at around 155,000 units, while the R1T and R1S will make up roughly 85,000 units.

With news that reservations continue to climb and are already well over 100,000, how does Rivian plan to bridge the gap between now and the first half of 2026, when the R2 will drive out of the factory into consumer hands?

Bridging the gap

"Whatever the brand is, you have to refresh your products or they're going to fade, and that's what's happening with Tesla now," said Tom Libby, associate director of industry analysis at S&P Global Mobility, according to Autonews .

More good news for Rivian investors is that the company refreshed and reengineered its R1S and R1T in June. The company introduced hundreds of hardware improvements, performance upgrades, a redesigned software experience, and improved in-house drive systems. In an effort to improve margins, the company also introduced two entirely new premium Ascend trims, a new Storm Blue exterior paint, and blackout trim options.

Checking boxes

For investors, there's a list of items for Rivian to check off as it goes along, to keep investors optimistic about the road ahead. Rivian needed to refresh its vehicles to stay competitive during the gap between its first-generation vehicles and its R2 -- and once the R2 production is stable, the introduction of the R3X, which will launch before the base R3.

Rivian also needed to lower costs and improve production efficiency, which it has completed, to help generate positive gross margins by the end of this year's fourth quarter. If Rivian can check that box this year, the road ahead looks much brighter for investors until the R2 can take the company's sales to new heights. Stay tuned -- Rivian remains a bright spot in the start-up EV industry .

Daniel Miller has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tesla. The Motley Fool has a disclosure policy .