During its earnings call this week, Rivian reaffirmed that production of the electric R2 SUV is set to begin in the first half of 2026 and that the starting price will remain around $45,000. The company has begun assembling “validation builds” of the R2 and has completed the construction of the extension at its Normal, Illinois facility that will be used for R2 production. Although the LG Energy Solution batteries for the R2 will first be supplied from South Korea, Rivian states that beginning in 2027, they will be sourced from a new facility in Arizona. Rivian’s electric R1T truck and R1S SUV have sold well over the last four years, but the California-based company is betting that the R2 SUV, which is less expensive, will be the brand’s future. The R2 was first shown in March of last year. It will likely have a range of more than 300 miles, a starting price of around $45,000, and a racing version with three motors that can be used on all four wheels. Since the R2 came out, a lot has changed in the auto industry, such as the slowing rise of electric vehicles and the confusion over tariffs. However, during Rivian’s earnings call this week, CEO R.J. Scaringe stated that the R2’s development is “well underway” and that the tiny electric SUV will still go into production in the first half of 2026, as InsideEVs initially reported. Production Status Updates A person on the call with Scaringe said that Rivian has started making “validation builds” of its car that competes with the Tesla Model Y. The prototypes were put together on an assembly line that used “mostly production tooling.” Making units that are ready for customers will take at least seven more months, so this is a big step forward. Rivian will now, at least initially, assemble the R2 in its current location in Normal, Illinois, rather than beginning production at a new factory in Georgia, as was previously planned. As of October 2018, the company said that the Georgia plant is still being built and will start making new Rivians in 2028. This comes after getting a $6.6 billion loan from the US Department of Energy. According to Rivian COO Javier Varela, the new expansion, which will include the assembly line and paint shop, is already completed. The Normal facility will be expanded to have a capacity of up to 155,000 R2s annually. Varela stated that the company has already identified all of the new manufacturing equipment required for the R2, which is presently being tested and calibrated, and that Rivian will shortly begin installing production equipment inside. Keeping It at $45,000 Although the Rivian R2 will be made in the United States, the new tariffs on foreign auto parts will affect almost all American-made cars. Scaringe said on the results call that Rivian had no plans to raise the R2’s starting price of $45,000, even though there were problems. Rivian lowered its 2025 forecast for vehicles from 46,000 to 51,000 to 40,000 to 46,000 because it knew that the confusion surrounding trade restrictions could cause a drop in demand for its cars. Rivian, on the other hand, is resolute about keeping to the R2’s $45,000 starting price and argues it has plenty of time before production begins to figure out how to cover the increased costs caused by tariffs. The batteries in the R2 will be very important. LG Energy Solution and Rivian agreed in October of last year to use the battery supplier’s state-of-the-art 4695 cylindrical cells for more than five years. These cells are more energy-dense and take up less room. Although LGES’s South Korean plants will supply the first batch of batteries, Scaringe noted that in order to reduce tariff costs, the business will begin procuring the same batteries from a new factory in Arizona in early 2027. A Big Change for Rivian The R2, a tiny electric SUV, might be a major model for the nascent company if Rivian can keep the $45,000 starting price guaranteed. It thinks that the popular R2 will help it become profitable, even though it plans to lose $1.7 to $1.9 billion this year. The fact that an R1T or R1S costs at least $70,000 and sales have stopped at about 50,000 per year limits Rivian’s ability to grow in the future. The lower starting point of the R2 could attract many more customers for Rivian, and thanks to the higher volume, the company will be able to spread its costs over a wider range of products. Rivian wants to make the fast R3X and the small R3 even less expensive when they are released in 2027.
