Rivian, the electric vehicle (EV) manufacturer, has announced plans to commence production of its new R2 electric SUV at its Normal, Illinois facility, expediting the launch process. Concurrently, Rivian (RIVN) has disclosed a delay in the construction of its anticipated $5 billion EV plant in Georgia, initially earmarked for the production of the R2 model. However, the delay is projected to have minimal impact.
The unveiling of Rivian’s more cost-effective R2 electric SUV took place on Thursday during a launch event held at its newly inaugurated Laguna showroom. This electric SUV embodies the distinctive design elements of Rivian’s Adventure Vehicle concept showcased in the R1 series, now packaged in a smaller and more budget-friendly format.
Constructed on a novel, more resourceful platform, Rivian’s R2 will be offered in single, dual, and tri-motor configurations, all boasting a range exceeding 300 miles (approximately 483 km). Measuring 4,715 mm in length, 1,700 mm in height, and featuring a wheelbase of 2,935 mm, the R2 exhibits dimensions smaller than those of the R1S model (5,100 mm length, 1,873 mm height, 3,075 mm wheelbase), placing it on par with the size of the Tesla Model Y.
With a starting price of $45,000, Rivian has opted to initiate production of the R2 electric SUV at its Normal, Illinois facility instead of its newly planned Georgia EV plant. This strategic decision is expected to yield savings of approximately $2.25 billion, a substantial sum that Rivian intends to allocate toward expediting the launch of the R2 model. Additionally, enhancements to Rivian’s Normal EV plant will enable an annual production capacity of up to 215,000 vehicles, marking a 43% increase from its previous capacity of 150,000 vehicles per year.
Consequently, Rivian has revised its production timeline for the R2 model, aiming for production to commence in the first half of 2026. Nevertheless, the company emphasizes the ongoing significance of its Georgia EV plant in its overall production strategy for both the R2 and R3 models. Construction at the Georgia facility will be postponed to prioritize the launch of the R2 in Normal.
During the R2 launch event, Rivian’s CEO RJ Scaringe concluded with a surprise announcement unveiling the R2’s counterpart, the Rivian R3, along with its high-performance tri-motor R3X electric crossover variant.
In a recent statement, Rivian’s CFO, Claire McDonough, expressed confidence in the company’s financial position, affirming that its cash reserves are projected to sustain operations through 2025. By opting to kickstart production of the new electric SUV in Normal, Rivian anticipates securing sufficient funding through the onset of R2 production.
Following an announcement made in November, Rivian intends to introduce upgrades to its plant during a scheduled shutdown in the current quarter, aimed at significantly reducing material costs later this year. The company anticipates achieving a “modest growth profit” by year’s end.
Despite the shutdown and plant overhaul, Rivian foresees vehicle deliveries remaining steady this year, with an estimated 57,000 units. The introduction of the R2 and R3 models is expected to facilitate Rivian’s expansion into new markets, including Europe, with more compact and affordable offerings.
Rivian’s strategic adjustment mirrors a similar decision made by Tesla, another prominent EV manufacturer, regarding the production of next-generation models at new facilities. Notably, Tesla redirected its plans for next-gen EV production from Gigafactory Mexico to Texas due to delays in the former’s timeline, a move that ultimately proved beneficial. Such strategic shifts enable manufacturers like Rivian and Tesla to leverage insights gained from establishing production at existing plants to streamline operations at future facilities.
