Good news for Rivian investors

Despite the narrative that electric vehicle (EV) startups are struggling and that EV growth in the US has slowed, Rivian Automobile (NASDAQ: RIVN) continues to deliver positive developments. Edmunds.com named the R1T launch edition its favorite EV among startups. Additionally, Rivian signed a joint venture deal with global automaker Volkswagen for up to $5 billion, and it beat second-quarter delivery estimates.

But now that investors are focused on the next step in the company’s vision, the launch of the R2, some exciting news has also been announced.

Come on, come on everybody

Rivian’s first-generation R1T electric truck and its R1S electric SUV helped quickly put the EV maker on the map. Not only were the vehicles well-received by critics and customers, but both quickly went into production in the thousands and delivered without much trouble.

That said, it’s become pretty clear that there are fewer and fewer early adopters to jump on for incremental sales, especially at the high end of the EV market, which is saturated with expensive options. People are clamoring for a more competitively priced and affordable EV. That’s where Rivian’s R2, expected to launch in the first half of 2026, comes in.

The good news is that the R2, which starts at $45,000 and costs about half as much as the $74,900 and $69,900 R1S and R1T, respectively, is quickly attracting buyers. At Rivian’s third annual “Family and Friends Day” at its factory in Normal, Illinois, vice president of manufacturing Tim Fallon said pre-orders had already topped 100,000.

Rivian’s CEO previously said that the R2 had already registered more than 68,000 reservations in less than a day after its launch in March, and that the number of reservations has increased organically to its current level.

Rivian is already taking steps to prepare for this expected increase by upgrading its Normal factory to increase production efficiency by 30% and increasing the factory’s production capacity from approximately 150,000 to 215,000 units per year. The R2 is expected to make up the majority of that future production at approximately 155,000 units, while the R1T and R1S will make up approximately 85,000 units.

With reservations continuing to climb and now well above 100,000, how does Rivian plan to bridge the gap between now and the first half of 2026, when the R2 rolls out of the factory and into the hands of consumers?

Bridging the gap

“Regardless of the brand, you have to renew your products otherwise they will disappear and that is what happens with Tesla “Now,” said Tom Libby, deputy director of sector analysis at S&P Global Mobility, according to Car news.

The story continues

More good news for Rivian investors is that the company refreshed and redesigned its R1S and R1T in June , introducing hundreds of hardware improvements, performance upgrades, a redesigned software experience, and beefed-up powertrain internals. In an effort to improve margins, the company also introduced two all-new premium Ascend trim levels, a new Storm Blue exterior paint job, and blackout trim options.

Checkboxes

For investors, there’s a list of items Rivian can check off to keep investors optimistic about the road ahead. Rivian needed to refresh its vehicles to stay competitive during the gap between its first-generation vehicles and its R2 — and once R2 production stabilizes, the introduction of the R3X, which will launch before the base R3.

Rivian also had to cut costs and improve manufacturing efficiency, which it did, in order to generate positive gross margins by the end of the fourth quarter of this year. If Rivian can check that box this year, the future looks a lot brighter for investors until the R2 can propel the company’s sales to new heights. Stay tuned — Rivian remains a bright spot in the emerging EV industry.

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Daniel Miller has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tesla. The Motley Fool has a disclosure policy.

Great News for Rivian Investors was originally published by The Motley Fool