Rivian announces highly anticipated R2 launch, but with a catch
There has been a considerable amount of hype and anticipation on Wall Street for this year's launch of Rivian Automotive, Inc.'s (RIVN) more affordable R2 midsize electric SUV, which the company is betting big on making it a legitimate threat to Tesla's (TSLA) dominance of the EV market in the United States.
Rivian's current R1 models are luxury SUVs starting at $77,000 and reaching $122,000 for the most expensive one. Meanwhile, the R2 is slated to have a starting price of $45,000 for its most affordable model.
In a client note in August, Needham analyst Chris Pierce predicted that the R2 “will be substantially expanding RIVN's TAM (total addressable market) beyond the more expensive R1 vehicle.”
“The size of the potential market opportunity for the R2 is encouraging when looking across current EV and ICE (internal combustion engine) offerings at similar price points, and even more so versus modest consensus FY26 R2 delivery estimate,” Pierce added.
Rivian on Thursday introduced its new R2 fleet, which has three models: R2 Performance, R2 Premium and R2 Standard.
The R2 lineup will offer up to 656 horsepower, which means it can go 0–60 mph in as quick as 3.6 seconds. It has a highway acceleration from 50-70 mph in as quick as 1.55 seconds.
Rivian estimates that the R2 has a driving range of up to 345 miles.
“R2 embodies so many of our learnings that we have accumulated—the passion and attention to detail from our team is visible everywhere,” Rivian founder and CEO RJ Scaringe said in a statement.
The R2 Performance has a starting price of $57,990, the R2 Premium starts at $53,990 and the R2 Standard begins at $48,490.
But the rollout of the new fleet comes with one major catch: A more affordable version of the R2 Standard, the much vaunted $45,000 model, will not actually be released until late 2027, making it nearly two years before it hits the market.
In fact, the first available R2 Standard model won't be released until the first half of 2027. This means that Rivian won't actually be releasing a vehicle with a starting price below $50,000 this year.
Nonetheless, despite the delay on its most affordable models, the fact that its most expensive R2 vehicle has a starting price roughly $20,000 less than the cheapest R1 might be enough to keep Wall Street bullish on the rollout.
Benchmark analysts, led by Mickey Legg, reiterated their Buy rating for RVN shares in a client note on Thursday that was written just before Rivian revealed the R2 lineup.
However, Legg was anticipating that "the initial R2 pricing is likely to come in above the widely cited $45K target given a simplified launch configuration on dual-motor AWD, with a clearly articulated roadmap to a $45K single-motor entry over time."
By providing this "clearly articulated roadmap" to its most affordable model on Thursday, Benchmark sees the R2 rollout event as being "an important catalyst supporting Rivian's mass-market strategy."
"R2 is positioned as a direct competitor to the Tesla Model Y, targeting a segment with limited differentiated EV options that combine utility, performance, and brand appeal," Legg added.
Rivian's stock is down more than 24% so far this year as part of a broader bearish view of the EV market.