Rivian R2 Demand Tops Expectations as Autonomy and Robotaxi Plans Advance

Rivian Automotive NASDAQ: RIVN said early customer and media feedback for its R2 electric SUV has been strong as the company ramps production and works toward broader autonomy capabilities, including supervised point-to-point driving later this year and an eyes-off system targeted for 2027.

Speaking at a Goldman Sachs event, Chip Newcom, Rivian’s vice president of investor relations, said the company has been collecting $100 refundable deposits from prospective R2 buyers and inviting customers in waves to configure vehicles and submit purchase intentions.

Conversion rates from those reservations have been “very good” and are trending ahead of Rivian’s prior expectations, he said.

Newcom said interest has continued as new vehicle trims are introduced, including the Coastal Cloud trim.

While he described the R2 launch as still being in its early stages, he said the initial reviews and feedback suggest the vehicle is achieving the intended product-market fit.

Rivian is continuing to ramp R2 manufacturing at its Normal, Illinois, plant and still expects to add a second production shift during the third quarter.

Newcom said the company is managing the supplier ramp process and noted that vehicle output can move only as quickly as the slowest supplier in its supply chain.

The company’s longer-term cost objective remains a roughly 50% reduction in R2 bill of materials compared with the R1 platform once R2 reaches full production scale.

Newcom said Rivian incurred about $100 million in incremental cost of goods sold during the second quarter related to the R2 ramp and expects further ramp-related costs in the third quarter.

Rivian expects those costs to begin reversing in the fourth quarter as it works toward becoming automotive gross-profit positive on an exit-rate basis by year-end.

According to Newcom, increased R2 deliveries and better fixed-cost absorption across the Normal plant’s paint, stamping and other operations will be key contributors.

“It’s all about scaling and building more R2s,” Newcom said when asked whether the target relies on unusual pricing or cost-reduction assumptions.

James Philbin, Rivian’s senior vice president of autonomy and AI, said the company is making progress on its supervised point-to-point driving feature, which it plans to introduce toward the end of the year.

The work includes scaling models and data, validating system performance and testing vehicles on public roads.

Philbin said the remaining technical focus is on ensuring the system behaves in a manner that feels natural to drivers while maintaining safety.

That includes avoiding overly conservative operation and appropriately handling vehicle speed.

He said the techn...