Founder and CEO RJ Scaringe on Rivian’s make-or-break moment

Rivian’s much-hyped make-or-break moment has arrived.

The electric-vehicle manufacturer on Tuesday will start deliveries of its second-generation vehicle, the R2 SUV. Company leaders (and investors) hope the product will be a breakout moment that brings widespread awareness to the brand, launches Rivian into the mass market, and drives the company toward profitability. CEO and founder RJ Scaringe has called it “maybe the most important thing we’ve launched to date.”

No pressure, right?

Scaringe has been successful at getting investors and VC firms on board with his ideas. As TechCrunch reported, the three companies he’s founded (Rivian, micromobility spinoff Also, and industrial AI and robotics startup Mind Robotics) have collectively raised $12.3 billion. Rivian, which Scaringe founded in 2009, raised nearly $12 billion in its 2021 IPO, and today has a market cap of over $22 billion. Now it’s time to convince mainstream consumers.

Morning Brew caught up with Scaringe at an event in Utah last week, just before R2 deliveries were scheduled to start.

This conversation has been edited for length and clarity.

You’ve said R2 is the most important launch to date. What’s at stake here?

We’ve spent a lot of time working on the vehicle, but I think it’s clearly not understood that we’re designing Rivian to be a much larger company, [with] a very large R&D budget. We’ve designed our teams around vertically integrating in almost every area of technical importance as we think about it. So we built all our electronics in-house, we built all of our software in-house, we’re building silicon in-house. We built our sensors in-house, motors, gearboxes, power electronics, wiring, everything.

Then we built a direct-to-consumer go-to-market channel, where we built sales, distributions—lots of distribution centers throughout the country, parts distribution, these big million-square-foot warehouses throughout the country, and then a big service network.

So, to do all that intentionally, we’ve spent a lot of money; our OpEx is high. We’re not making money today. And often people say that as if it’s a surprise to us, but we’re building a flagship product only today, and so the way that that all starts to make sense is we launched the high-volume product. And so when you say what’s at stake, it’s like the whole essence of how we’ve designed Rivian has been set up for R2. I think it sounds negative when you put it this way, but the future of the business is dependent on R2 scaling. So it’s very important for us, and we’ve done everything we can to cross all our Ts, dot all our Is on the product, and make sure it’s ready for that.

Looking back to R1 and some of the manufacturing challenges, what lessons learned are you applying to the production ramp for R2?

It’s just such a different company. When we launched R1, we built the plant and put it together through Covid…We were still learning how to work in-person again. We hired a whole new team to run the plant that had not worked in person much together. We then ramped. We then had a bunch of supplier challenges, which is the 2022 supply-chain crisis. We had no leverage with the suppliers. We were just a brand new company. But we also just didn’t have processes and systems, and the teams weren’t as mature.

And so when I look back on the Rivian of five years ago, it’s like the difference of looking at somebody graduating high school today and somebody that’s starting eighth grade, times an order of magnitude…We’ve now launched a bunch of other things and iterations, but we now have all these processes that allow us to avoid a lot of the heroics that were necessary just to get the lines to run.

And maybe the best personal evidence of this is, on R1, I was designing fixtures and on the floor making machines work, like brute force. Whereas on R2, we have really well-operating teams that went through a design validation build, multiple iterations, went through multiple manufacturing validation builds. We did all the ramp-up sign-offs on all the equipment, and so we’ve tested all the systems really well, such that there’s far fewer surprises. Now, of course, any launch as complex as this, you have thousands of different parts coming from hundreds of different suppliers. There are things you don’t expect, but the number of surprises is quite small, and so it’s very manageable…We hit the launch date—to the day—that we set years prior…despite a tornado hitting the plant a few days before…And we’re now continuing to ramp on schedule.

What is the plan to make Rivian a household name and reach that mass-market buyer?

A lot of it is in the product itself. We launched with a flagship product. The average selling price of an R1 is over $90,000, so because of that price, it is a more limited product in that it’s not a huge volume product, and it’s not something that…a large percentage of the population [is] looking to buy in terms of price point.

R2 is very different. R2 starts at $45,000, goes up to $57,000, but it’s right in the sweet spot. The average price for a new car in the United States is about $50,000, so suddenly this is the right price point to be mass-market in the US market, in the exact right segment. It’s a five-passenger SUV…Awareness is still nowhere near where we hope it’ll be in a couple years, but we can let awareness grow, because we have so much enthusiasm around what we’re doing. In the first year or two, there’s enough people that know about the brand to support our ramp-up, but then word-of-mouth, our own materials, the way we tell stories about the brand, will allow it to methodically become part of a broader awareness for what Rivian does.

You’re launching in a much different market than when you were developing and unveiling R2. What changes did you make to adapt to the fact that the EV market is much different in mid-2026 than it was a year ago?

I think there’s a lot of negative sentiment that exists, particularly in media, around EVs that is assigning causality to a lack of demand in EVs, when in fact it’s a lack of choice…The fact that [the Tesla Model 3 and Model Y] are selling at such high volume demonstrates that the right product, whether it’s electric or not, is capable of generating a lot of demand. So what’s happened in the US market is…there’s been very few highly compelling choices…It’s the design, it’s the packaging, it’s the capability, it’s the performance, it’s the price, it’s the technology, all of that integrating into a highly cohesive package that feels very desirable…I think the real limit to market share isn’t actually that customers are saying they don’t want EVs. I think it’s just that there [haven’t] been choices that fit their price, their form factor, their range, their tech requirements, and so our belief should not be a surprise—obviously, I’m the CEO of an electric car company—is that with the right product, the volume will come. And we think R2 is actually gonna capture a significant amount of US market share, and be a significant driver of lifting overall market share adoption, in much the same way that Tesla has had that effect with Model 3, Model Y.

You’ve gone all in on physical AI. What’s your vision for how AI will reshape our physical world?

AI entering into the physical world has been something we’ve dreamed about for awhile…But it hasn’t been until very recently…in the last three years…where we’ve had this big technology inflection point. So what has powered a lot of the growth in LLMs, and in a way that was unimaginable in 2022, which has now become a way of life, which is [that] I can get everything from relationship advice to medical advice to support being an executive at a company from an LLM. That was built on the idea of transformers and the idea of building these large, multibillion-parameter foundation models. And so while that moved most quickly into written word, video, and images, it’s now going to enter into the physical world.

We see that in how we’re developing self-driving in our vehicles. We made a big pivot to shift to this foundation model-based approach, or neural net-based approach. We see that in robotics. I started another company to focus on robotics. And the way I often characterize this is, because we’ve been talking about this for a while, it seems like it’s like a promise that keeps getting moved, but…I think the rate of progress in the next five years is well beyond what I think society is expecting, and so I think in some ways a bigger challenge isn’t going to be, “Is the technology going to get there?” It’s going to be thinking about how we make the technology shifts digestible for society…I think it’s going to rewire how we think of the basic fabric of society, and how it’s set up, in ways that we as a society don’t know the answer to.

I don’t think we understand how to think about our education systems in a world that has AI capable of doing so many different tasks. I don’t think we’ve been able to think about our tax systems properly. I mean, everything will need to change over the next decade, which is super exciting, because I think it gives us a chance to democratize a lot of things…It’s really going to change a lot of things that have historically created a lot of barriers for knowledge, barriers for information.