Rivian AI Vehicles - How to Solve the Osborne Problem

[TexasBob]

I am wondering WTH RJ was thinking by announcing the transformation to "AI Enabled Vehicles" a year ahead of when the first ones are coming to market. The tech is compelling, which makes it all the more difficult to imagine why anyone would buy a new Rivian now rather than waiting (especially if they intend to launch the R2 without it).

Why They Did It?
My only guess is that they need more money (not good) and hoped that this would be a way to boost the stock price and float more shares. Even on a company sale, you would put all of this into the data room under NDA not out in public.

What to do About It?
As near as I can tell, the only solution is to (a) accelerate rollout or (b) offer free retrofit for at least the major components for vehicles sold in 2026.

Maybe there are enough people who do not care, but even those who do not want the tech for themselves will want it for resale. What do others think?

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[Dark-Fx]

Why They Did It?

It was inevitably going to leak anyway with all of the R2's on the road having Lidar.

Launch edition R2's are still going to get all the Gen2 capabilities, which they demonstrated today will still get you point to point without having to do much of anything once they release those builds to the public.

IMO, Rivian is still years away from L4, and who knows if the gen3 hardware is even adequate to get them there. If you're waiting on the sidelines just because of the hardware generation, you're always going to be, there will always be something nicer and better.

 

[Donald Stanfield]

I think it's a mistake not offering the lidar at launch. I wouldn't buy an R2 without it, assuming it's not a trim package upgrade. Maybe they will make the 45K dollar one first, and the lidar premium one will be 60ish? In that case they don't lose anything by not offering lidar immediately.

What we really need is the configurator for R2 to launch soon.

 

[portdirect]

Rivian was effectively forced to say something credible in autonomy by the end of the year. They set that expectation themselves with the Gen2 launch, and after the Gen1 “hardware with headroom” narrative failed to materialize, not delivering a concrete RAP-based announcement/launch would have been existential. They did not need to go anywhere near where they went today - just make good on the original RAP+ commitments (which they actually bought themselves a few extra months on… but I digress).

In that sense, today’s announcement has a strong Osborne-effect flavor - fully agree with you @TexasBob . Near-term consumer enthusiasm may be dampened, but Rivian clearly chose to signal long-term intent rather than optimize for short-term optics and sales - they are too sophisticated to so this accidentally.

One possible interpretation I came up with - and a speculative one at that (ie break out the tinfoil headgear): is that the primary audience may not have been consumers at all, but Volkswagen. Autonomy is explicitly out of scope for the JV, and VW already has a parallel relationship with XPeng that includes licensing a self-driving stack: backed by XPeng’s own silicon IP. While that agreement is currently China-limited and 2026-targeted, it is not difficult to imagine it expanding to ROW if successful.

Against that backdrop, Rivian’s announcement functions as a clear statement of capability (ie parity with XPeng) and direction. Even if it creates short-term ambiguity on the consumer side, it establishes that Rivian intends to control, and invest in, the full autonomy stack in a way that cannot be ignored by a strategic partner.

The open question is whether this ultimately drives a deeper engagement from VW: potentially another capital injection or some form of IP licensing or technology transfer into the JV. That remains to be seen, but the signal has now been sent.

(You can new remove your tinfoil hat, and store it in the microwave for its next application.)

 

[Time2Roll]

Full Self Driving is vaporware. There is no alternative maker that does have the technology.

Otherwise nobody would buy anything if they thought it would be better next year. And guess what cars have gotten better every single year for 100 years. People still buy vehicles every single day.

 

[electruck]

If you're waiting on the sidelines just because of the hardware generation, you're always going to be, there will always be something nicer and better.

yeah, spot on. the technology lifecycle these days is on the order of 12 months, if even that. with the expected useful lifecycle of a vehicle being 10-20 years, only a small subset of vehicles are ever going to have all of the latest and greatest tech. but not everyone can afford to buy all that tech new so there will always be a used market that is behind on tech.

 

[1stPlace]

Some people will hold out for the lidar R2 and that is fine...the market of people in the US who have no experience with autonomy and don't trust it yet anyway is substantially larger at this time.

 

[CANCERDOC]

While Rivian was clear that L4 autonomy will only exist with “gen3” lidar, many will assume the R2 will launch with it even when it’s explicitly clear the features will arrive a year later with a new hardware platform. This won’t stop early R2 adapters from feeling the same way gen1 owners do now from lack of perceived features although gen1 it was advertised explicitly to be capable of such only later on to be lol jk it can’t do that.

 

[Egen]

Simple fix. Include the lidar hardware at the launch of R2 and then activate it via OTA update when ready.

 

[usulio]

One possible interpretation I came up with - and a speculative one at that (ie break out the tinfoil headgear): is that the primary audience may not have been consumers at all, but Volkswagen.

Agree this is plausible.

As for the Osborne effect, I think Rivian would like a world where most people lease their vehicle for 1-2 years and continuously upgrade. For all Rivian's talk about sustainability they never describe it as a car that will last you decades, they describe it as the newest and coolest gadget. That game only works till a newer and cooler gadget comes along. Rivian thinks of itself as a software and tech company, so when they sell you the current gadget, they are already planning out what gadget to sell you next.

 

[Nixapatfan]

Vast majority of the people buying cars don't really follow industry news most of them buy based on an image they think the car portrays or by word of mouth. Don't believe me just look at most of the conversations on this forum from people asking for features the car was never sold with or promised.

 

[Great Gatsby]

I'd echo most comments. Outside of this forum, I don't see any of the regular people I talk to about their R2 reservations taking a pause over the upcoming Lidar technology. Most regular folk don't know what Lidar is and don't understand the whole self-driving tech. R2 is a more affordable R1 aimed at a competitive segment with no other options (that I'm aware of) with Lidar included. I don't see foresee this dampening sales. If they said 800V was coming later, then maybe I'd question the choice, but for lidar? Most people aren't jumping ship to wait on that. Funny enough, most vehicles shipped with lidar still just have it as vaporware since the technology is not active (ie Volvo EX90 and Lucid Gravity). It could honestly end up being an additional option on the vehicle as well. Doubt many would pay more for that with just the promise of L4.

Would anyone here hold off an additional year on ordering an R2 if sales went on today? I don't think so. The demand is there.

As for the R1 though...yeah that might be a different story. I'm 100% waiting for a Gen3 with Lidar before making a jump, and I'm sure most with current R1s will too. For the more expensive do it all vehicle, people will wait to get the one that is more future proof when you are forking over that much cash. Surprised more conversations haven't pivoted to what a Gen3 R1 could be. I think they were enough hints in the presentation to show that a Gen3 R1 is in the works.

 

[mkg3]

Why They Did It?
My only guess is that they need more money (not good) and hoped that this would be a way to boost the stock price and float more shares. Even on a company sale, you would put all of this into the data room under NDA not out in public.

Because he wanted to get the share price up by promising AI and robotaxi future.

His pay package has stock price incentives:
"A majority of those stock options — 22 million — is tied to new stock price hurdles. Scaringe will earn 2 million shares once Rivian’s stock hits $40, and then another 2 million shares for every $10 increase up to a stock price of $140."
https://techcrunch.com/2025/11/07/rivian-gives-rj-scaringe-a-new-pay-package-worth-up-to-5b/

As a share holder, I have no issue with trying to get the price up.

 

[TexasBob]

Because he wanted to get the share price up by promising AI and robotaxi future.

His pay package has stock price incentives:
"A majority of those stock options — 22 million — is tied to new stock price hurdles. Scaringe will earn 2 million shares once Rivian’s stock hits $40, and then another 2 million shares for every $10 increase up to a stock price of $140."
https://techcrunch.com/2025/11/07/rivian-gives-rj-scaringe-a-new-pay-package-worth-up-to-5b/

As a share holder, I have no issue with trying to get the price up.

Ugh do not even get me started on the compensation scam. Pay RJ $1.4 Billion for delivering lower returns than his investors would get by putting money in a savings account. smh

Share price	Shareholder Annual Return (through 2027)	RJ Additional Personal Gain
$30	-14.2%	0
$40	-10.9%	$80 million
$60	-4.3%	$360 million
$80	+0.4%	$800 million
$100	+4.2%	$1.4 Billion
$120	+7.4%	$2.2 Billion

 

[3wisemonkeyz]

Surprised more conversations haven't pivoted to what a Gen3 R1 could be. I think they were enough hints in the presentation to show that a Gen3 R1 is in the works.

I’d bet $20 that they are deliberately delaying lidar on R2 so the gen3 R1 “flagship” can get it first in Q2 (hopefully with some other goodies). At least that’s what I’d do if I was RJ. That way you get the non-lidar R2 crowd buying the $45k version and the pro-lidar crowd paying $65k without pissing off the R1 crowd. That’d be optimizing the shit out of the production, demand and price elasticity curves and would be super shrewd.

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