Rivian bets on lower-cost R2, R3 crossovers to stem losses

Rivian Automotive is developing lower-cost crossovers on a new midsize platform as the electric vehicle startup seeks to scale its operations and reach profitability after burning through billions of dollars.

The midsize R2 crossover is scheduled for production in the first half of 2026 with a starting price below $50,000 including shipping. Rivian's current R1 vehicles start at just over $70,000 with shipping.

Rivian launched the R1T pickup, R1S crossover and delivery vans for Amazon, its biggest shareholder, in late 2021. As of April, Rivian said it had built a total of 100,000 vehicles since the launch.

The EV maker expects flat production this year at 57,000 vehicles across the three models at its Normal, Ill., factory. In the first half, the startup posted a net loss of nearly $3 billion.

Rivian freshened its R1 vehicles in the second quarter but the changes were mostly under the skin to cut costs. Rivian refers to its 2025 R1 models as the second generation.

The next step in the automaker's road to profitability is scaling up production with the R2 in Illinois. Rivian plans to follow that with an even lower-cost crossover, the R3, at a future Georgia factory.

"Rivian's product line is fresh enough to not need substantial updates, but it's also too expensive to provide meaningful revenue and market share," said Karl Brauer, executive analyst at iSeeCars. "This puts more pressure on the R2 and R3, which can't arrive too soon."

R1T/R1S: Rivian updated its R1T pickup and R1S crossover for the 2025 model year. The changes are mostly under the skin, but they add up to a freshen for two closely related vehicles.

"These new R1 flagship vehicles have hundreds of hardware improvements," the company said. They include "performance optimizations, a fully redesigned software experience, new in-house developed drive systems and design elements."

The freshened R1T maintains its starting price of $71,700 with shipping. The freshened R1S is $1,000 more than the 2024 model — $77,700 with shipping.

The R1 vehicles likely won't see a redesign before 2029, said Sam Fiorani, vice president of global vehicle forecasting at AutoForecast Solutions. "With the company's current cash-flow issues, getting the R2 volume models into production and into consumers' hands should be the priority," he said.

Robby DeGraff, manager of product and consumer insights at AutoPacific, expects a freshen of the R1 vehicles around 2027 and a redesign around 2031.

R2 production should start in early 2026 at the Illinois plant, Fiorani said. Rivian could add R2 production at its planned Georgia plant if needed, but not before 2028, he said. No significant updates are expected before the end of the decade.

Electric Delivery Van: A lithium iron phosphate battery pack, designed to save costs, was introduced in 2023 in the commercial vans Rivian makes for Amazon. The vans also changed to an in-house electric motor that year, replacing units from a supplier. Rivian is looking for new customers for the vans. Fiorani said work vans typically go long periods with minimal changes and no refresh or redesign is expected for many years.

R2: Rivian revealed the two-row midsize crossover in March, about two years before the scheduled start of production at the Illinois factory, which is undergoing expansion. The R2 is similar in appearance to the boxy R1S. The R2 has seating for five and is about the size of the Tesla Model Y, the bestselling EV in the U.S. Rivian said the R2 will have a range of up to 330 miles and customers will have a choice of one, two or three electric motors. Base models will have a single motor driving the rear wheels. Higher trim level models will have two motors and all-wheel drive. Three-motor variants will have two motors at the rear and one at the front for blistering acceleration. Rivian said performance versions will be capable of 0 to 60 mph sprints in under three seconds.

R3: The smaller crossover was a surprise "one more thing" at Rivian's presentation of the R2 in March. Rivian said it will be less expensive than the R2, but did not disclose pricing. The R3 will have a single motor driving the rear wheels on the base model and two or three motors on higher trim levels with awd. Rivian also presented a performance version of the R3, the R3X, which is wider to accommodate bigger wheels and tires.

Fiorani doesn't expect production of the R3 to begin before 2028 because it's assigned to the future Georgia plant where Rivian has paused construction to save money and to focus on the expansion of its Illinois plant for the R2. DeGraff said Rivian could have the Georgia plant operating by 2027 for R3 production. Pricing for the R3 should start around $35,000 before shipping for the base model. It's possible the R3X could launch first, DeGraff said, since it should be the more profitable model.