- Rivian said on its earnings call this week that the electric R2 SUV will still begin production in the first half of 2026 and will still start at around $45,000.
- The company has started assembling “validation builds” of the R2 and has completed the extension that will house R2 production at its facility in Normal, Illinois.
- While the LG Energy Solution batteries that will be used in the R2 will initially come from South Korea, Rivian says the batteries will be sourced from a new factory in Arizona starting in 2027.
While Rivian’s electric R1T truck and R1S SUV have had a successful four years on sale, the California-based startup is banking on the more affordable R2 SUV to secure the brand’s future. Revealed last March, the R2 promises over 300 miles of range, an optional all-wheel-drive tri-motor performance model, and a starting price of around $45,000. Since the R2’s debut, a lot has changed in the automotive landscape, from slowing EV growth to uncertainty surrounding tariffs. But on Rivian’s earnings call this week, CEO R.J. Scaringe asserted that the R2’s development is “well underway” and that the compact electric SUV remains on track for production in the first half of 2026, as first reported by InsideEVs.Production UpdatesOn the call, Scaringe stated that Rivian had begun putting together “validation builds” of its competitor to the Tesla Model Y and that the assembly line for these prototypes was utilizing “mostly production tooling.” This is solid progress given that production of customer-ready units isn’t expected to start for at least another seven months. While Rivian originally planned to start production of the R2 at a new factory in Georgia, the company will now—at least initially—assemble the R2 at its existing facility in Normal, Illinois. The Georgia factory is still being built and will begin churning out new Rivians in 2028, the company said after it was approved last fall for a $6.6 billion loan from the U.S. Department of Energy.The Normal plant will be expanded to handle a capacity of up to 155,000 R2s per year, and Rivian COO Javier Varela stated that the new extension, which will house the assembly line and paint shop, has already been completed. Rivian will now begin installing production equipment inside, and Varela also said the company has already sourced all of the new manufacturing equipment needed for the R2, which it is now testing and calibrating. Sticking to $45,000While the Rivian R2 will be built in the United States, the recently imposed tariffs will still affect imported automotive parts, which are found within almost every car built in the U.S. Regardless, Scaringe said on the earnings call that Rivian is not planning to raise the $45,000 starting price for the R2 despite these challenges.RivianRivian did admit that the uncertainties regarding trade regulations could lead to lower demand for its vehicles, as the company adjusted its 2025 forecast from 46,000–51,000 vehicles down to 40,000–46,000 vehicles. But Rivian is committed to maintaining the planned $45,000 starting price for the R2 and says it has enough time before production starts to brainstorm ways to deal with increased costs from the tariffs.One key factor will be the R2’s batteries. Last fall, Rivian signed a deal with LG Energy Solution to use its advanced 4695 cylindrical cells for more than five years, which the battery supplier says are more energy-dense and space-efficient. While the initial supply of batteries will come from LGES’s facilities in South Korea, Scaringe said that in early 2027 it will begin to source the same batteries from a new facility in Arizona, helping reduce costs from tariffs.A Game-Changer for RivianIf Rivian can keep the R2’s starting price to $45,000 as promised, the compact electric SUV could be a pivotal model for the nascent company. While Rivian still expects to lose between $1.7 and $1.9 billion this year, the company believes the mainstream R2 will put it on a path toward profitability. Rivian’s deliveries seem to have plateaued at around 50,000 units per year, and the $70,000-plus required to buy an R1T or R1S limits its future growth. The R2’s lower entry point could vastly expand Rivian’s customer base, and the increased scale that higher volume brings will help the company diffuse its costs across more product lines. Rivian aims to expand even further downmarket with the subcompact R3 and sporty R3X, which are due to arrive in 2027.More on Rivian’s LineupCaleb Miller began blogging about cars at 13 years old, and he realized his dream of writing for a car magazine after graduating from Carnegie Mellon University and joining the Car and Driver team. He loves quirky and obscure autos, aiming to one day own something bizarre like a Nissan S-Cargo, and is an avid motorsports fan.
Source: caranddriver.com
