Why Rivian’s CEO isn’t worried about Trump’s EV policy

[ResidentialBusiness]

The Trump administration’s fight against electric vehicles includes everything from trying to get rid of the EV tax credit to freezing funding for charging stations. But EV company Rivian says its strategy hasn’t changed.

We talked to CEO RJ Scaringe about why his long-term vision isn’t dependent on current policy, and the company’s future plans for its products. The company makes luxury SUVs and trucks, including 2024’s bestselling premium SUV in California (electric or gas); next year, it will launch a more affordable vehicle that starts at $45,000.

Construction on a new factory outside Atlanta is set to begin in 2026, with a $6.57 billion loan guarantee that the Department of Energy finalized just before Biden left office—that legally, Trump shouldn’t be able to take away.

The Trump administration is pushing to cut EV incentives, including the $7,500 federal tax credit. What impact do you think that will have on the EV market in the U.S.?

There’s a lot of emphasis right now on the very short term—what happens in the next months or even weeks with policy. But the way we make decisions as a company, we’re looking at this on a much more long-term basis. The product roadmap we built, the technology we’ve developed, the way we’re designing and building and growing the businesses, is really being architected around a long-term view that the market will move over time to 100% electric.

RJ Scaringe [Photo: Rivian]

In that transition, it’s critical that there’s a collection of great companies being built in the United States, employing the U.S. workforce, developing the technology, building the products, and making sure that we as a country maintain leadership and what undoubtedly and unavoidably is going to be the core of personal transportation. Combustion will become an increasingly small percentage over time.

Even though you’re focused on the long-term view, how much do you think current policy matters in terms of pushing EVs forward faster?

Policy, of course, matters, but it’s not the only driver, especially in a situation like this where the end state is so clear. We’re paying very close attention to [policy]. But we will adjust around whatever the policy is. When I started the company [in 2009], I didn’t start with any idea that there would be policies that are either tailwinds or headwinds. We just said that this is something that needs to happen. And it’s going to happen with the collective efforts of companies that are innovating with technology and creating compelling products.

I think the other thing to recognize, in all the noise and the discussion of electrification and how it’s become politicized, there’s one thing that’s very consistent that’s on all sides of the political spectrum: Creating jobs in new technology, creating manufacturing in the United States, building a really robust ecosystem of companies that are facing that future state is something everyone’s aligned on. We have a plant today in Normal, Illinois and a plant that we’re building just outside Atlanta, Georgia, with support from both states. They’re different very different states politically, but the amount of excitement and reception we have in both states is outstanding.

If some legacy automakers pull back from EVs because there are fewer incentives, does that give you a competitive advantage?

We talk about making decisions in the context of our [kids’ futures] . . . I think it’s really important that every manufacturer is investing heavily in electrification and creating products that are so compelling and so exciting that regardless of whether they’re electric or gasoline they’re going to draw customers in. If we really want to accelerate the speed at which we electrify, the speed at which that transition happens, it’s going to require a lot of choices [for consumers]. Certainly, a lot more than we have today. I say all that because I do think it’s important that other manufacturers invest. If I looked at it purely through the lens of what’s best for Rivian, I think that manufacturers pulling back, myopically, is actually better for Rivian. It [hurts the] competition. But I don’t think that’s good for the world.

If some other U.S. automakers do retreat temporarily from EVs, how much is China’s EV industry likely to get farther ahead?

If you’re optimizing for the next quarter, I think you can make bad decisions as a business and bad decisions for us as a country. But every business is going to make decisions [based on] what they believe is going to maximize value for their shareholders. It’s not an easy challenge, especially in a world where you’ve got a legacy business that is maybe highly profitable, and you’ve got a lot of experience. It’s a hard decision to say we’re going to go build products that, by definition, pull demand from our legacy products. Those new products, by virtue of being lower volume and the technology being different, may not have the same profitability to start. Over time, I think electric vehicles—given the dramatically enhanced simplicity and fewer parts—will become not only cost-competitive, but they’ll have a cost advantage relative to combustion-powered vehicles. But there’s a lot of work to do in battery technology to get there.

[Photo: Rivian]

How long will that take? Isn’t it right that some EVs are at cost parity with their counterparts now, if you look at total cost of ownership? How far away are competitive sticker prices?

I think it depends on the segment. In the premium segment, it’s there. As evidenced by us. We only sell our flagship products today (our R1T, R1S) and the average transaction price is over $90,000. It’s the bestselling premium SUV in California—not premium electric SUV, premium SUV. It’s doing really well. If you look at other premium SUVs, you could even say it’s priced at a discount. It’s much higher performance. In a premium product like that, there’s a lot of other contributors to cost, so that the relative cost of the battery to the rest of the vehicle is not as significant. To get to cost parity on something that is a $20,000 car, $25,000 car, the battery then makes up such a a large percentage of its price that today it is still difficult. I think over time we’re going to solve that, but it’s a few years out. Whether it’s three years out or five years out, when you squint, you can see it. We’re getting close to it. It’s not, like, 20 years away.

You’re launching a more affordable EV next year, right?

Yes, and I’m so excited. It’s probably the most excited I’ve ever been for a product we’re developing, which is funny because I didn’t think I could be more excited than when we launched the R1, something I’d been working on since I started the company. R2 takes all of the learnings from R1. The cost for us to make it is less than half of R1, and the price is quite a bit lower—it starts at $45,000.

[Photo: Eric Anderson/Rivian]

You mentioned the idea of designing a car that’s compelling not just because it’s electric but for other reasons. What does that involve?

It’s important to have a really clear vision for what both the product and the company stand for and represent. I mean that not just in philosophical ways, but in terms of product/attribute tradeoff. The best products, whether they’re cars or electronics or furniture, are the products that feel really holistically thought through. Where despite the fact that maybe hundreds or maybe even thousands of people have worked on that product, it feels like a singular vision. Apple has done an amazing job of this. Of course, I think we did a really nice job on it with our R1 products. What we’re trying to do with R2 is to capture that.

For us, it’s really blending the aspiration of something that feels premium—the materials are nicely executed, we’re thoughtful in the selection of materials—but at the same time, the fact that it’s aspirational doesn’t take away from its usability. You can get it dirty. You can fit a lot of gear into it. We often think of it as a platform to go generate the kinds of memories that you’re going to want to hold on to for many years to come—the kinds of things you want to take photographs of. [The cars also] accelerate incredibly well. They’re very capable on road. They’re very capable off road. But we really want all the attributes, all the characteristics of that mosaic, to come together into this feeling. Like this vehicle is your adventure partner.

When you look into the future, how do you see EV technology continuing to change? With battery technology, for example, how is that evolving?

The most important element is getting cost down, both through the chemistry in the batteries and the rest of the battery pack—concepts like “cell to pack” where we’re minimizing the amount of structural overhead that exists in the pack to take the overall cost down. And we see with our own products that the cell costs have come down, the pack costs have come down, modules have been massively simplified. I expect that innovation to continue. Of course, [there’s] competition between all the different manufacturers—everyone’s trying to drive cost down on this system. We have thousands and thousands of people across many different companies that are working on this problem. It’s great to see the healthy and, I’d say, highly productive competition between different companies in trying to address costs.

What about something like solid state batteries? Are they likely to be in cars in the market soon?

I think it’ll make its way into cars. It depends on how you define soon. I’d say within the next 10 years, for sure, but within the next two years, not likely, and not at scale. You may see some premium applications sooner, but they’re going to be really expensive because there’s lots of different ways you can accomplish solid state, but the industrialization of solid state still has a ways to go.

Last year, you made a $5.8 billion deal with Volkswagen that lets VW access your vehicle software. How do you think about technology differently than some of the legacy automakers?

We don’t have large teams of people that used to do something in the old way—we’ve only architected the business around a future state. So, obviously, that means we don’t have an engine design department. And our propulsion team has only ever worked on electric propulsion. There’s not an electric division and a gas division. The existing manufacturers can develop motors, develop battery systems. I think a more challenging aspect for them has been building out software teams and the computer design teams, the electronics design teams. And the reason is it’s so different from what they’ve done historically.

[Image: Rivian]

How does your “zonal” electrical architecture work?

Over time, [other car companies] had this massive proliferation of what are called ECUs—effectively little computers across the car. A modern car might have 75 to somewhere north of 100 ECUs. It was never architected in a proper way. [We have controllers in a few larger zones] versus all these little computers, and we built an entire software operating system and software stack around it that is a very different topology than what incumbents have. It represents various essential cost savings, but importantly, makes managing software many orders of magnitude easier.

[Photo: Elliot Ross/Rivian]

What’s coming next for Rivian?

We have some products that we’re already planning that essentially extend our brand into different segments, different form factors. Obviously, it should be different price points. [Editor’s note: One of the next products is the R3, an even more affordable car.] With the form factor and the overall aesthetics of the [R3], you sort of find yourself saying, is it a hatchback, is it a crossover, is it an SUV? We really wanted something that gave us a chance to demonstrate what we felt really strongly about, which is that the brand we’re building and the company we’re creating has a lot of elasticity. It represents an idea that’s bigger than just a single segment of cars. It’s this idea of, as I said before, enabling the kinds of adventures you want to take photographs of.

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