Rivian is walking a long, tough road to becoming a full-scale automaker.
The California-based electric vehicle startup fought to get the original Rivian R1T and R1S on the road, and in doing so, had to overcome pro-dealer laws in many states. It has had to build up service and sales infrastructure all on its own. Now, it's getting ready to sell its make-or-break mainstream EV, the Rivian R2, at a time when the future of the American electric market just got a lot murkier.
At every step of the way, CEO RJ Scaringe says one group has stood in Rivian's way: Legacy automakers, like Ford, General Motors and Toyota. The companies fought to block Rivian from selling directly to consumers, and they fought to get emissions regulations rolled back.
That's because traditional automakers made their names selling internal-combustion cars, and they've been more than willing to battle Rivian, Tesla and any national or local lawmaker to get their way. Scaringe argues that this is for a simple reason: Existing automakers don't actually want to sell EVs.
"You see, all of the incumbents, they're the biggest adversaries in any of the EV policies. All of the work that we're trying to do to even get it to just be a fair game on things like vehicle registration costs, the folks we spend the most energy on fighting against in D.C. are actually car companies," Scaringe said.
"And so that's very, very telling, because it's reflective of their desire, which is that this whole EV thing would just go away," Scaringe added.
The implication is that these companies want to continue dominating the U.S. market with big gas trucks, free from any burdensome regulation and, ideally, from competition from feisty startups.
The electric vehicles most automakers offer, Scaringe argues, are emblematic of this. And since many are not particularly compelling on their own, he said that they'll struggle in a world where tariffs and the disappearance of the tax credit drive up prices.
Scaringe said that the rollback of the EV tax credits and the imposition of tariffs are likely bad for the competitiveness of the U.S. and the established automakers. The changes, however, are "for Rivian, probably a good thing from a competitive landscape point of view," he added in a round-table with reporters, including InsideEVs.
In theory, that makes sense. Other automakers pulling back on EVs gives Rivian more time to establish itself as a leader in the space, something the company is on its way to doing. Rivian's are certainly compelling, at least to me and many like me. The trouble is that the R1T and R1S are expensive. The R2, however, may arrive at the right time.
It's targeting a $45,000 starting price, though that will be for the rear-wheel-drive model. More importantly, unlike competitive electric vehicles from Ford, Chevy, Honda, Toyota and more, the R2 will be built in the U.S. And if if truly offers the same flagship-quality Rivian software and an interior in the same league as the R1, it may be compelling enough to be a hit even without the tax credit.
But cars like the Ford Mustang Mach-E and Chevy Equinox EV? Those will likely be a lot less compelling when you can't find $100-a-month lease deals on them. Having to subsidize these uncompetitive products while also keeping their gas products alive will pull funding away from making more competitive EVs, a trend we're already seeing.
"I think in 2030 we're going to have an even worse situation than we have today in terms of lack of choice and lack of competition," Scaringe said.
He says that right now, buyers can choose from over 300 options in the internal-combustion vehicle market, many of which are great. EV buyers don't have that kind of freedom yet.
"Today, under $50,000, are maybe two great choices with the [Tesla] Model 3 and Model Y[...] This massive market share that they have is not a reflection of a healthy market, it's a reflection of a market without choice," he said. "And so we think it couldn't be a better situation for R2 to be launching into."
Do Automakers Wish 'This Whole EV thing Would Just Go Away'?
I'm going to interrogate Scaringe's claim, because it's something I've heard whispered plenty of times, but never directly from a CEO.
It's something we often get a sense of here at InsideEVs as we deal with people at every level of the automotive corporate ladder. And many of them have been all too eager to blame a vaguely defined "slowdown" on their returns to gas power.
I buy it, at least partly. Let's get one thing clear: No organization "wants" anything. General Motors does not want anything because General Motors is not a person. The question, then, is do the actions of the organization suggest that the leaders want EVs to succeed.
Because make no mistake, the engineers working on flagship EV products want to make a great product. The business people, too, want to make something they're proud of. Yet they usually do not agree on what vehicles are worth investing in.
At some companies, it's clear that the gasoline proponents are winning. Stellantis just delayed the rollout of its electric pickup truck (again) so that it could bring back the V-8. The company's Jeep Wagoneer S, Dodge Charger Daytona EV and Fiat 500e are all products with extremely questionable positioning, and the two American-sized options feel half-baked at times.
The company is also more openly courting buyers who don't want to give up their gas-guzzlers, and has yet to demonstrate it can make a compelling EV for an American audience. I'd definitely say that, on balance, the decision-makers at Stellantis wish the EV thing would go away.
I struggle to say whether the same is true at Ford or GM. Their respective chief executives have repeatedly said that they get where things are headed next. Both companies seem to be taking the challenge of EVs seriously, but while Ford is saying the right things, it has not innovated on the product side.
GM has been far more aggressive about rolling out EV models, but it also sponsored the national convention of the political party that just kneecapped EV support from a federal policy level. Moreover, it just penned a record-setting investment deal for its next-generation V8s. Its EV sales are ballooning, but like many automakers, it is also offering a lot of incentives on its electric products. How it deals with potential changes to EV demand in America will be very telling.
The Germans have been more aggressive than the Americans overall, albeit with equally tumultuous results. Mercedes whiffed so hard with its EQ models that the leadership has pivoted back toward internal-combustion and hybrid options. The Volkswagen Group is in a weird place. The company was early on EVs, but the VW and Audi options felt like rough drafts. The Porsche offering and the latest Audi models have gotten way better, but their gas models are still the breadwinners. (At the same time, the VW Group clearly realizes it needs help delivering the future, which is why it has a multibillion-dollar software and technology partnership with Rivian.)
BMW has arguably made the best technological strides of any of them. Yet all of the German companies seem to recognize that engine-building is a core competency they can no longer use to outflank opponents.
Hyundai and Kia are bought in, though its dealers don't seem to be. Toyota is slowly getting more serious after years of foot-dragging. Honda has not even demonstrated that it can build the sort of EV Americans want, though even having a rebadged Chevy Blazer EV on Honda lots has proven that there's an audience for such a vehicle. But after the company dialed back its EV ambitions before even taking its first real step in the U.S, it's hard to take its electric ambitions seriously.
So, is Scaringe right? Do these companies really wish the EV problem would just go away? Honestly, I think so.
The EV transition was always going to be challenging. But it is now happening concomitant with a sea of other headwinds, including a rapidly shifting regulatory environment, the unexpected ascendance of Chinese automakers and the related but separate transition to software-defined vehicles.
These companies have to battle all of these challenges while also losing their key advantage: They are all some of the only companies on Earth with the know-how to build world-class internal-combustion engines.
All else being equal, a company like BMW or Chevy would like to sell you a product on the merits of its engine. Unfortunately for them, EVs are too good. The experience is smoother, quieter and simpler, and the technology is trending toward getting cheaper and more reliable than the best internal-combustion products. And regions like Europe and China don't care what they think; they're moving forward regardless.
But these transitions take time, and these companies are configured for short-term profit. Of course, they aren't on the side of change. Entrenched powers rarely are.
Contact the author: Mack.Hogan@insideevs.com.
