Rivian R2 Demand Tops Expectations as Autonomy and Robotaxi Plans Advance

Key Points

• R2 demand is exceeding Rivian’s expectations: Reservation conversion rates for the electric SUV have been strong as the company introduces additional trims and continues its production ramp in Illinois.
• Rivian is advancing autonomy capabilities: Supervised point-to-point driving is targeted for late 2026, while an eyes-off system is planned for 2027. The company also expects its custom RAP1 processor and next-generation hardware to support future driver-assistance features.
• Uber partnership supports robotaxi ambitions: Uber is expected to provide up to $1.25 billion in equity funding, with plans involving an initial 10,000-vehicle purchase, options for 40,000 more, and L4 robotaxi testing in several U.S. cities.

Rivian Automotive NASDAQ: RIVN said early customer and media feedback for its R2 electric SUV has been strong as the company ramps production and works toward broader autonomy capabilities, including supervised point-to-point driving later this year and an eyes-off system targeted for 2027.

Speaking at a Goldman Sachs event, Chip Newcom, Rivian’s vice president of investor relations, said the company has been collecting $100 refundable deposits from prospective R2 buyers and inviting customers in waves to configure vehicles and submit purchase intentions. Conversion rates from those reservations have been “very good” and are trending ahead of Rivian’s prior expectations, he said.

Newcom said interest has continued as new vehicle trims are introduced, including the Coastal Cloud trim. While he described the R2 launch as still being in its early stages, he said the initial reviews and feedback suggest the vehicle is achieving the intended product-market fit.

R2 Production Ramp Remains Underway

Rivian is continuing to ramp R2 manufacturing at its Normal, Illinois, plant and still expects to add a second production shift during the third quarter. Newcom said the company is managing the supplier ramp process and noted that vehicle output can move only as quickly as the slowest supplier in its supply chain.

The company’s longer-term cost objective remains a roughly 50% reduction in R2 bill of materials compared with the R1 platform once R2 reaches full production scale. Newcom said Rivian incurred about $100 million in incremental cost of goods sold during the second quarter related to the R2 ramp and expects further ramp-related costs in the third quarter.

Rivian expects those costs to begin reversing in the fourth quarter as it works toward becoming automotive gross-profit positive on an exit-rate basis by year-end. According to Newcom, increased R2 deliveries and better fixed-cost absorption across the Normal plant’s paint, stamping and other operations will be key contributors.

“It’s all about scaling and building more R2s,” Newcom said when asked whether the target relies on unusual pricing or cost-reduction assumptions.

Autonomy Development Targets Supervised Driving This Year

James Philbin, Rivian’s senior vice president of autonomy and AI, said the company is making progress on its supervised point-to-point driving feature, which it plans to introduce toward the end of the year. The work includes scaling models and data, validating system performance and testing vehicles on public roads.

Philbin said the remaining technical focus is on ensuring the system behaves in a manner that feels natural to drivers while maintaining safety. That includes avoiding overly conservative operation and appropriately handling vehicle speed. He said the technology has shown encouraging performance in situations including construction zones and narrow-road negotiations, though further validation is required before release.

Rivian’s target for eyes-off driving in 2027 is based on continued development of the same end-to-end software system, Philbin said. The company expects to build confidence through exposure to more long-tail driving scenarios and a greater number of miles.

Philbin added that Rivian has access to GPU capacity through Amazon Web Services, supported by Rivian’s relationship with Amazon, that should meet its AI training needs over the next six to nine months. He said the company will continue to monitor the market for computing capacity beyond that period.

Rivian is also seeing Autonomy+ adoption track better than expected, Philbin said, describing the products as “sticky” once customers become accustomed to using the features. He said the R2 could appeal both to customers migrating from internal-combustion vehicles and to EV buyers seeking more advanced driver-assistance functions.

Custom Silicon and Robotaxi Plans

Vidya Rajagopalan, Rivian’s senior vice president of electrical hardware, said the company developed its RAP1 custom processor to improve cost, performance and development speed. Because Rivian designs the hardware alongside its vehicle and autonomy software, it can tailor the silicon to physical-AI and autonomous-driving applications rather than rely on data-center-oriented merchant chips, she said.

Rajagopalan said Rivian has had the silicon in-house for more than a year and a half and expects hardware characterization testing to be substantially complete within about a month and a half. The company has vehicles operating with the chip and has exercised public features including Universal Hands-Free, Lane Change on Command and Highway Assist on the platform.

She said the Gen 3 system remains on track for late 2026, with lower-performance configurations expected to cost less than Gen 2 hardware. Rivian has not announced when Gen 3 architecture might reach the R1 platform. Point-to-point functionality, however, is expected to be available on both Gen 2 and Gen 3 systems at launch, according to Rajagopalan.

On Rivian’s partnership with Uber, Newcom said Uber is expected to provide $1.25 billion in equity capital over several years. Rivian has already received $300 million and expects another $250 million upon reaching a milestone later this year. The remaining funding is tied to technical milestones related to an L4-capable R2 robotaxi and expansion to as many as 25 markets globally, including at least one in Europe.

The agreement includes an initial plan for Uber or its fleet partners to purchase 10,000 vehicles, with an option for another 40,000. Newcom said Rivian also expects to receive software licensing fees for vehicles operating with its driver system, though the company has not disclosed pricing for those fees.

Rivian plans testing in San Francisco, Miami and Chicago by the end of the year, Philbin said, with expert-driver teams already collecting data and validating the system. The company sees robotaxis as a step toward personal Level 4 vehicles rather than its ultimate destination.

About Rivian Automotive (NASDAQ:RIVN)

Rivian Automotive, Inc is an American automotive technology company specializing in the design, development and manufacture of electric vehicles. The company is best known for its all-electric R1 platform, which underpins the R1T pickup truck and R1S sport utility vehicle. In addition to consumer products, Rivian has secured a significant commercial contract to produce electric delivery vans for a leading e-commerce provider, underscoring its capability to serve both retail and fleet customers.

Founded in 2009 by engineer and entrepreneur Robert “RJ” Scaringe, Rivian has grown from a research-focused startup into a publicly traded corporation.

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