Get the first look at the R2, Rivian's $45,000 SUV. CEO RJ Scaringe gave CNBC an early peek

LAGUNA BEACH, Calif. – In a high-stakes pivot aimed at the mainstream consumer, all-electric automaker Rivian has unveiled the R2, a midsize SUV with a crucial $45,000 starting price. The vehicle represents the company's most critical effort yet to move beyond its high-end, niche market roots and prove it can build a profitable, high-volume product for the masses.

Rivian is navigating a treacherous landscape for EV startups. The company faces intense investor scrutiny over its significant cash burn, relatively low production volumes, and a market that is seeing a resurgence in hybrid sales amid wavering federal support for EVs.

Against this backdrop, the R2 is not just a new model; it is the strategic centerpiece of Rivian's future. In an exclusive early look and test drive with CNBC, CEO RJ Scaringe presented the vehicle as the answer to these challenges—a product designed to be both aspirational and accessible.

The R2: Distilling the Rivian DNA

At first glance, the R2 is unmistakably a Rivian. It carries the brand's signature design language, appearing as a more compact and streamlined version of its larger, nearly $80,000 sibling, the R1S.

The familiar horizontal light bar and "stadium" headlights are present, reinforcing the family resemblance. The vehicle maintains a long, flat roofline, which Scaringe noted allows a 6-foot-1-inch person to sit comfortably in the rear. The interior echoes the minimalist, premium aesthetic of the R1, but with key differences tailored for a broader market. The R2 is a five-seater, two fewer than the R1S, a change that aligns it with the core of the midsize SUV segment.

"It's a smaller vehicle," Scaringe told CNBC. "But I think this is the best vehicle we've developed to date. Of course it's cheaper, but it doesn't mean it's not an aspirational product."

Performance and Practicality

During a test drive near Rivian's Palo Alto office, the R2 demonstrated the brisk acceleration characteristic of modern EVs. Scaringe highlighted its agility and low-to-the-ground feel. "It's quicker than it needs to be," he said after a burst of acceleration on the freeway, suggesting its performance will be a key selling point in its class.

While not designed for the extreme off-roading of the R1, the R2 is engineered to maintain the brand's "adventure" ethos. "It's a Rivian, so it still has to be adventure ready," Scaringe explained. "It can go out and be on a trail. It's just not going to be doing extreme rock crawling in the way that an R1 can do."

The vehicle also introduces several unique and practical features.

• Dual Glove Compartments: Addressing a common complaint from R1 owners, the R2 includes two glove compartments. In a nod to maintaining a premium feel despite the lower price, they feature a velvet-like lining, a detail Scaringe said costs $11 per vehicle.
• Full-Drop Rear Windows: In a rare design feat, the rear passenger windows retract completely into the door panels. Scaringe noted the company spent significant engineering effort on the placement of the rear wheels to make this possible.

Engineering for Profitability

The most critical aspect of the R2 is its underlying architecture, which has been radically simplified to achieve its $45,000 price point profitably. This focus on cost reduction is paramount for a company that has alarmed investors with its burn rate.

Scaringe detailed a "dramatic reduction in the cost structure," driven by fundamental design choices.

• Simplified Computing: While traditional cars can have over 60 electronic control units (ECUs), Rivian reduced this to 17 in its first-generation vehicles. The R2, built on the company's second-generation platform, further slashes that number to just seven.
• Reduced Wiring: This architectural simplification enabled Rivian to cut the length of wiring in the vehicle by two miles compared to the previous generation.
• Strategic Trade-offs: The decision to spend $11 on glove box lining exemplifies the company's strategy: invest in tangible, customer-facing details while aggressively cutting costs in unseen areas like wiring and component complexity. "The top-line number, the starting price of $45,000, has to be achieved," Scaringe emphasized. "And we have to do it profitably."

The Road Ahead: From Niche to Volume

Rivian's success to date has been in the premium segment. Scaringe pointed out that the R1S is the "best-selling premium electric SUV in the United States" and a top seller of any premium SUV in California.

The company's hope is that the R2 can replicate that desirability in the much larger and more competitive mid-price SUV market. A $45,000 starting price places it in direct competition with top sellers like the Tesla Model Y, Ford Mustang Mach-E, and Hyundai Ioniq 5.

For Wall Street, the R2's unveiling is a pivotal moment. The vehicle's design and features appear compelling, but the true test will be in execution. Investors will be watching closely to see if Rivian can successfully ramp up production, maintain quality control, and, most importantly, deliver the vehicle at its target cost structure.

The R2 is Rivian’s calculated gamble to secure its future. The first look suggests the product has the potential to resonate with a wide audience, but its ultimate success will determine whether Rivian can transition from a celebrated startup into a sustainable, high-volume force in the automotive industry.