Rivian revealed its much anticipated downsized R2 electric SUV Thursday, with a few big surprises.
In order to get the R2 to market more quickly, Rivian will begin building its second-generation EVs at its plant in Normal, where the inaugural full-sized R1 line has been in production since 2021. Meanwhile, plans to build a $5 billion Georgia plant to build the R2 are “delayed,” a company spokesperson said Thursday.
The accelerated target delivery for the R2 rolling off the Normal line will be the first half of 2026, Rivian CEO and founder R.J. Scaringe announced during the live online unveil.
“We’ve been working hard to find ways to pull the timing on these programs forward, to get them to as many people as possible as quickly as possible,” Scaringe said. “We’re able to achieve that accelerated timing by leveraging our production capabilities in Normal, using our Illinois site to launch R2 and get that into market as quickly as we can.”
In addition to the downsized R2, Rivian introduced an even smaller R3 and souped-up R3X crossover, hoping to capture a larger share of the nascent EV market. The production timing and location for the R3 has yet to be announced.
The R2 is about 15 inches shorter than the full-sized R1S SUV. It also costs significantly less, starting at $45,000, versus the $70,000 starting price for the R1.
Rivian was set to break ground this year at the planned Georgia plant, hoping to begin production of the R2 in 2026. Instead, the downsized SUV will initially be produced in Normal, but Rivian remains committed to building the Georgia plant, Scaringe said.
“Our Georgia site remains really important to us, it’s core to the scaling across all these vehicles, between R2, R3, R3X,” Scaringe said.
Timing for the launch of the Georgia plant will be pushed back to focus on “the capital efficient launch of R2 in Normal,” the company said Thursday.
Rivian began production in September 2021 and builds its electric R1T pickup truck, R1S SUV and commercial delivery vans for Amazon and AT&T in a renovated 3.3 million-square-foot auto plant about 130 miles south of Chicago.
The unveiling of the R2 comes as Rivian plans for a three-week shutdown to retool its Normal plant.
The plant shutdown, which will run from April 8 to 28, is designed to accommodate a number of supplier and component changes to reduce material costs, while improving the speed of production.
As part of the retooling, Rivian plans to eliminate a third production shift and consolidate its 7,000 assembly line workers into two shifts.
“The shift change will begin when we return from the April shutdown, during which we will transform our R1 production to integrate new engineering design changes that we expect will significantly reduce our cost,” said Rivian spokesperson Kelli Felker. “All hourly employees will be offered a job on one of the two available shifts as we will increase capacity per shift.”
Last month, Rivian announced it was laying off 10% of its salaried workforce amid slowing demand industrywide for electric vehicles. California-based Rivian had more than 8,000 workers in Normal and about 16,700 employees overall, prior to the layoff announcement.
While the 7,000 hourly assembly workers were not affected, an undisclosed number of the 1,000 nonmanufacturing employees in Normal were given notice last month.
The Normal plant will need to be retooled again at some point to accommodate production of the R2, Felker said Thursday. The new line will be built alongside the R1 and electric delivery vans.
As to how the R2 line will affect staffing requirements in Normal, Rivian will have more information on that in the future, Felker said.
Last year, Rivian produced 57,232 vehicles. Its target for this year remains 57,000 vehicles as it navigates high interest rates, flattening demand for EVs and the planned three-week shutdown of the Normal plant in April.
Rivian generated $1.3 billion in revenue and lost more than $1.5 billion in the fourth quarter of 2023.
The company had $7.86 billion in cash as of Dec. 31.
On Thursday, Scaringe said the new R2 and R3 SUVs will help expand the market for Rivian.
“These represent our future, these represent what we’ve been building to, the brand that we established with the R1 products and positioning Rivian to take that further and make that more accessible to more people,” Scaringe said.
Rivian’s stock price jumped nearly 13% on the R2 unveil and Normal production news, trading at about $12.50 per share Thursday afternoon.
rchannick@chicagotribune.com