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Rivian Bets Big on $45K R2 SUV for Growth
13 Feb
Summary
- Rivian's stock jumped nearly 20% following projections of cheaper models.
- The new R2 model will start at nearly $45,000, competing with Tesla.
- Industry-wide shift to affordable EVs aims to counter subsidy expiry.
Rivian's stock experienced a significant surge of nearly 20% on Friday, fueled by the company's strategy to attract more buyers with a new, more affordable R2 model. This vehicle, set to launch in the second quarter, will start at approximately $45,000, positioning it as a competitor to Tesla's Model Y.
The automotive industry is witnessing a widespread shift towards lower-priced electric vehicles. This trend is a direct response to decreased demand after the expiration of a $7,500 federal tax credit and other policy changes. Automakers are prioritizing the development of more accessible EVs to revitalize sales.
Ford is accelerating the development of its $30,000 EV model, while General Motors has reintroduced its affordable Bolt EV for under $30,000. Tesla has also adjusted its strategy, focusing on stripped-down variants of its mass-market Model Y and Model 3.
Rivian anticipates its R2 SUVs will drive a substantial increase in deliveries, projecting a 53% jump by 2026. Despite facing challenges, the company's fourth-quarter results suggest a strengthening business outlook. The R2 launch is seen as crucial for Rivian's growth and market position in the competitive EV landscape.
