Rivian’s Chief Executive argued that the electric vehicle market currently suffers from a “lack of choice” during an exclusive interview with CNBC on Friday, January 26.
Need for more EVs
Rivian CEO RJ Scaringe had a chance to talk about the electric vehicle market’s situation with CNBC’s Jim Cramer.
The Rivian boss highlighted the need for electric automakers to roll out more models to expand customers’ choices.
“What I think we’re witnessing today is a lack of choice. 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.”
Rivian CEO RJ Scaringe
In that sense, Rivian is planning to expand its electric vehicle lineup with the imminent launch of its new R2 vehicles. According to the American electric automaker, these upcoming models will be more compact and affordable than its current R1 vehicles that sell from $70,000
Waning demand
Rivian CEO RJ Scaringe aligns with Elon Musk’s concerns over electric vehicles’ increasing prices as a major barrier that impedes large-scale uptake, as it continuously lowers customer demand.
The Tesla boss emphasized during the Q4 2023 Earnings Call on Wednesday that its offerings are still more expensive than those of its traditional vehicle counterparts, such as the Toyota RAV4, Corolla, or Honda Civic.
“People are really stretching their wallets to be able to afford a Tesla.”
Elon Musk
This affordability barrier plays a huge role in customers’ decisions when it comes to buying an expensive electric vehicle or a more affordable gas-powered car.
In fact, even the Musk-led company fell short of its earnings target in Q4 2024. It also warned investors of “notably” slower growth this year as it develops the long-promised next-gen platform.
Government support
Rivian CEO RJ Scaringe also asserted that supportive government policies are crucial for the electric vehicle industry to thrive, citing the Biden-Harris administration’s initiatives to hit at least 50% EV sales by 2030.
For instance, the Inflation Reduction Act’s tax credits of up to $7,500 for eligible EV models. In a significant development, the US government now also allows qualified buyers to benefit from the EV incentive at the point of sale by transferring the tax credits to the dealerships.
Rivian CEO Scaringe noted that they ensured the development of the upcoming R2 models to qualify for the tax credits. Therefore, these new models will likely have a price below $55,000 for cars and below $80,000 for trucks.
