Electric vehicle maker Rivian began delivering a cheaper SUV on Tuesday, aiming to take customers away from Tesla and others.
The long-awaited R2, which will eventually be available for less than $45,000, could help increase market share for the Irvine company, best known for vehicles priced around $77,000.
The first R2s to roll off the company's production line in Normal, Illinois, are the high-performance version, starting at $57,990. Rivian said the R2 Premium will arrive in late 2026 for around $54,000, followed by an R2 Standard version in 2027 priced at $44,990.
“Rivian is really trying to prove itself,” said Ivan Drury, chief insights officer at Edmunds. “They've moved beyond that initial stage and are hoping to move into mass-market products.”
The R2 Performance is still an expensive vehicle for many Americans, but it's a step below Rivian's nearly $77,000 R1S. It's typical for an automaker to launch the most expensive version of a new vehicle first, experts said.
Whether the R2 will be the success Rivian hopes will not be clear until late 2027, once standard versions become widely available. CEO RJ Scaringe said the company aims to compete not only with other electric vehicle makers, but also with traditional auto companies such as Jeep and Subaru.
“More regular people will be interested in the R2, especially the lower-priced models,” said automotive analyst Brian Moody. “There will always be early adopters, but there are many more customers in the $45,000 to $55,000 range.”
According to Cox Automotive, the average transaction price for a new electric vehicle in the United States is $55,000, compared to $49,000 for a gasoline-powered vehicle. Sales of used electric vehicles have increased lately due to their value, with an average transaction price of around $36,000.
Although there is a lot of hype surrounding the launch of R2, investors have not been impressed. Rivian shares fell 7% on Tuesday.
There has been a general cooling of the electric vehicle market. Major automakers, including Honda and Ford, have reduced their electric vehicle options as enthusiasm for the vehicles has waned under the Trump administration. A $7,500 tax credit for electric vehicles expired in September.
Drury added that the announcement of a new product would generally generate more buzz than the first deliveries of a vehicle that has already been in the public eye.
“It's just that they kept a promise, and the market itself is not what it was when they first came up with the vehicle,” Drury said.
Rivian lost $3.6 billion last year and has not been profitable since its founding in 2009. Scaringe said the company will reach profitability per unit of production with the R2 this year, but estimated that the company will not turn an overall profit until closer to 2030.
Karl Brauer, an automotive industry expert at ISeeCars.com, said the premium and standard versions of the R2 will likely sell in much larger volumes than the high-performance version.
“In theory, it's an exciting time, because they're releasing this new version, but it's the most expensive one,” Brauer said. “I don't have any indication that there are going to be any big, high-volume sales.”
