Rivian CEO RJ Scaringe Zeroes In On $48K As 'Sweet Spot' For R2 Pricing

Rivian Automotive Inc (NASDAQ:RIVN) CEO RJ Scaringe previously said that the EV maker’s upcoming R2 vehicle will be an SUV, smaller than its R1S SUV, and cheaper. However, in an interview published on Tuesday, the CEO has finally zeroed in on $48,000 as the “sweet spot” the company is aiming for.

What Happened: "The average transaction price of a vehicle, any vehicle in the United States, is around $48,000," Scaringe told Forbes. "We think that's a really important sweet spot, to be in that range, to create a viable option for customers that are coming out of combustion-powered vehicles getting into something very different."

The R2 is scheduled to be unveiled on March 7 at an event in Laguna Beach. It will eventually enter production in 2026.

The vehicle is expected to be Rivian’s candidate to compete against Tesla’s best-selling Model Y SUV. Both of Rivian’s existing vehicles- the R1T truck and the R1S SUV- are priced at the higher-end around $70,000, making them closer in price to Tesla’s more premium Model X SUV than its mass-market offerings.

Scaringe has also previously said that the new vehicle is being designed with the $7,500 federal EV tax credit in mind. All versions of the Tesla Model Y are already eligible for the credit. Rivian’s R1 vehicles, however, qualify for only a $3,750 tax credit.

What We Know About R2: The R2 will be more compact while retaining the brand’s essence, as detailed by a company executive during the company’s last earnings call in November.

"There's an extreme vacuum of choice we feel in the sort of $45,000 to $50,000 price range for midsize SUVs," Scaringe then said. It is a price bracket held firm by Tesla with its lower-end electric vehicles. While Tesla’s Model 3 currently starts at $38,990, the Model Y begins at $42,990.

According to a January report from consultant Cox Automotive, EV prices are nearing parity with combustion engine vehicles. As of the end of 2023, the average EV price was at about $50,798 as compared to the average combustion engine vehicle price of $48,759.

Check out more of Benzinga’s Future Of Mobility coverage by following this link.

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