Rivian, the electric vehicle (EV) manufacturer, has announced its latest offerings of smaller and more affordable SUVs and crossovers, the R2 and R3 models.
The company’s move comes amid a slowdown in demand for EVs, with high interest rates leading to a sharp drop in demand for these vehicles which are generally more expensive than gasoline-powered cars.
The R2, with a starting price of $45,000, is expected to play a crucial role in Rivian’s success and will be produced at the company’s existing facility in Illinois, rather than at the planned $5 billion plant in Georgia, which is yet to be constructed.
By doing so, Rivian will be able to deliver the R2 in the first half of 2026 while reducing the amount of capital needed and lowering the risk of the launch.
According to Rivian, the move will save the company more than $2.25 billion, and it has sufficient capital to fund operations through the launch of the R2.
The R2 is a five-seater version of the larger R1S SUV.
It offers more than 300 miles (483 km) of range and is priced well below Rivian’s flagship R1 SUVs and pickups.
Last year, Rivian produced 57,232 vehicles, and the company expects flat growth this year while tackling slowing demand and multiple weeks of production downtime to make upgrades intended to cut costs and improve margins.
Despite the immense popularity of SUVs and pickups in the United States, ramping up production and generating demand beyond the initial wave of enthusiasts has been a challenging task for EV manufacturers.
Offering affordable EVs at scale is seen as the key to attracting customers still reluctant to switch from their cheaper gas-guzzling vehicles.
In a surprising move, Rivian also unveiled its R3 crossover and a more powerful R3X variant.
The R3 will be priced below the R2 and launched after that vehicle.
However, the company did not disclose any other details about these models.
A crossover refers to a vehicle built on a car platform but with increased ride height and the ability to handle rough terrain like an SUV.
Rivian’s new offerings are expected to expand its customer base and give the company a much-needed boost in the competitive EV market.
