Rivian CEO Agrees With Elon Musk On EV Affordability: 'There's Not Enough Vehicles Across Price Points...To Give People Viable Alternatives'

Rivian Automotive Inc (NASDAQ:RIVN) CEO RJ Scaringe is seemingly on the same page with Tesla Inc (NASDAQ:TSLA) CEO Elon Musk on affordability being the key factor affecting EV adoption.

What Happened: In an interview with CNBC on Friday, Scaringe highlighted the lack of choice across price points as one of the key deterrents for people looking to switch to an EV.

"What I think we're witnessing today is a lack of choice," Scaringe told Jim Cramer. "There's not enough vehicles across price points and form factors to give people viable alternatives to their combustion vehicles that they've been buying."

With the R2, Rivian is looking to address the lack of lower-priced EVs priced below $50,000. The vehicle is also being developed with the $7,500 federal EV tax credit in mind, Scaringe said.

During Rivian’s third-quarter earnings call, CFO Claire McDonough announced that R2 platform production would commence in 2026, with product unveilings expected in early 2024. The R2, while retaining the brand’s essence, will be more compact and available at a lower price point.

Rivian’s current offerings, the R1T electric truck, and the R1S SUV, are both priced over $70,000. Certain battery options of the two vehicles are eligible for a tax credit of $3,750.

Why It Matters: Scaringe’s perspective is largely similar to that of Elon Musk who has often highlighted high price of EVs as a key hindrance to large-scale EV adoption. During Tesla’s recent fourth-quarter earnings call on Wednesday, the CEO noted that Tesla vehicles are still priced over popular combustion vehicles such as the Toyota RAV4, Corolla, or the Honda Civic.

“People are really stretching their wallets to be able to afford a Tesla,” Musk said.

Tesla is also presently working on a cheaper next-gen vehicle which is expected to start production in the second half of 2025. Tesla’s cheapest offering currently is the Model 3 sedan which starts at $38,990.

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Image: Nerijus jakimavičius from Pixabay