Rivian shares surge as company reveals new EV models, $2.25 billion in cost savings


Rivian CEO RJ Scaringe reacts at an event to unveil a smaller R2 SUV in Laguna Beach, California, U.S., March 7, 2024.

Mike Blake | Reuters

Shares of Rivian Automotive surged roughly 10% Thursday as the EV maker unveiled three new vehicles and announced more than $2 billion in savings related to pausing construction on a plant in Georgia.

Two of those EVs came as a surprise to consumers and investors. Rivian CEO RJ Scaringe, in announcing the company’s upcoming R2 SUV, also revealed two additional crossovers called the R3 and R3X, a performance variant.

The R2 is expected to start at about $45,000 when it goes on sale during the first half of 2026. It’s expected to be the fourth product for Rivian following a commercial delivery van and larger, more expensive R1S SUV and R1T pickup for consumers. The R1 vehicles start at roughly $70,000 and can top $100,000.

The Rivian R3 electric vehicle is unveiled at the Rivian South Coast Theater in Laguna Beach, California, on March 7, 2024.

Patrick T. Fallon | AFP | Getty Images

Scaringe disclosed few details about the surprise R3 crossovers, but told CNBC’s Phil LeBeau that the R3 will be priced lower than the R1.

“These represent our future,” Scaringe said during a livestreamed event from Laguna Beach, California.

The announcements come at a crucial time for Rivian as it attempts to expand its customer base amid slower-than-expected EV sales in the U.S. after automakers flooded the first-adopter market with pricey all-electric vehicles in recent years.

Rivian’s sales pace has slowed in recent quarters, and the company widely disappointed investors last month by missing quarterly estimates and forecasting slightly lower production this year compared to 2023 due to plant downtime.

The Amazon-backed company has been burning through cash to improve current EV production and narrow losses.

Shifting production of the R2 from the in-development plant in Georgia to the company’s plant in Normal, Illinois, will save $2.25 billion, Rivian said in a press release. It will also allow the vehicle to begin production earlier, it said.

The company said it will pause construction on the Georgia plant, to be resumed “later.”

Rivian CEO RJ Scaringe speaks at an event to unveil a smaller R2 SUV during an event in Laguna Beach, California, U.S., March 7, 2024. 

Mike Blake | Reuters

The R2 will operate on a new EV platform but looks like a smaller version of the R1S SUV. It will be capable of more than 300 miles of all-electric range on a single charge and 0-60 mph time in under3 seconds, the company said.

“R2 represents the essence of our brand, while targeting the significant midsized SUV segment, a massive market with limited compelling EV options beyond Tesla,” Rivian CEO RJ Scaringe told investors last month. “R2 has been developed with vertically integrated propulsion platforms, electronics and software to create an incredible user experience.”

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