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The CEO of Rivian, one of the few electric-only car manufacturers in the US, recognizes that the industry has an affordability problem, and he doesn’t expect you to solve that problem by making more money.
“I do believe there’s an extreme lack of choice in the market,” Rivian founder and CEO RJ Scaringe said in a Friday talk at the Atlantic Festival in Washington. He suggested EV shoppers with a budget of no more than $50,000 only have one compelling choice, the Tesla Model 3.
(You’re not actually limited to a Tesla in that price bracket, but many of the non-Tesla options require compromising on range or charging speeds.)
That read on the EV market followed a question from Scaringe’s onstage interviewer, Atlantic staff writer Derek Thompson, about how much EV sales are struggling. The CEO allowed that this growth, while continuing, is “just not as fast as what people had anticipated.”
Rivian’s current lineup is part of the affordability issue, with prices starting at about $70,000 for its R1T pickup and $77,000 for its R1S SUV. “The fact that we started with a flagship product at a high price point shouldn’t be any surprise,” Scaringe explained.
Help is on the way with Rivian’s R2 SUV, a more compact vehicle that will go for $45,000 and up when it ships in 2026. Later on, the four-door hatchback R3 will have a still-lower starting price, which Scaringe says will benefit from “significant learnings” about manufacturing EVs.
The EV industry’s slower-than-expected transition to the Tesla-designed North American Charging Standard (NACS) might also explain EV sales growth falling short of hopes, but that did not come up in the conversation.
Rivian was among the first automakers to announce a switch to NACS and gain access to Tesla’s Supercharger network, but it won’t sell vehicles with NACS ports built in until 2025.
Scaringe suggested that regulations could accelerate EV adoption, using California as an example: “In about 10 years, in the state of California you will not be able to buy a car with an engine in it.”
That’s not correct: While the state will require that all new light-duty vehicles sold in 2035 to qualify as zero emission, the California Air Resources Board’s rules implementing that mandate allow for up 20% of a carmaker’s sales to be plug-in hybrids with at least a 50-mile battery range.
Long-term, Scaringe predicted that declining costs for batteries will combine with the mechanical simplicity of electric cars—in which entire categories of gas-vehicle maintenance don’t exist—to make the triumph of EVs inevitable.
“I do believe we’re going to see the cost curve get to the point that the most economic decision you can make is to buy an electric vehicle,” he forecast.
Scaringe spoke before a supportive audience that did not seem to need much of a sales pitch for EVs now, but he told Thompson that he faced much more skepticism when he started Rivian in 2009.
“I would get asked silly questions, like can they handle the bumps, can they go off road, can they get wet?” he said. “Customers weren’t yet even thinking about electrification.”
Rivian continues to struggle relative to Tesla, with a 2023 production total of 57,232 vehicles versus 1,845,985 at Tesla, and it’s yet to turn a profit. Rivian, however, has a fleet customer that Tesla can’t match: Amazon, which has signed up for 100,000 Rivian electric vans. Scaringe said that order will “essentially electrify their entire delivery fleet,” drawing applause.
Thompson also asked about the power sources for the electricity going into the batteries of EVs, asking if they still made environmental sense for people living in states that rely heavily on coal power plants.
“It’s such a point of confusion around electrification,” Scaringe said, explaining that a gas engine functions as “a micro power plant” that can’t generate power to turn the wheels at nearly the same efficiency as even a coal power plant.
And those fossil-fuel power plants continue to exit the market as renewable energy rises. The smokestacks of one such retired facility stand about a mile to the southwest of the Atlantic Festival’s waterfront venue, with two other ex-coal plants shuttered within a five-mile radius.
Scaringe noted that the upcoming ability of Rivian vehicles to serve as whole-home batteries can help increase the efficiency and reliability of a renewable-centric electric grid.
More than once in the talk, Scaringe pronounced himself fascinated by how fast clean-energy change is coming to both his own industry and to society as a whole. As he put it at the end of the talk: “The inflection point that we’re living in is really cool.”
Source Agencies
