RJ Interview by Heatmap: Inside the Mind of RJ - product positioning and R2 development

Heatmap news

I’ve clipped a few parts of the article below, but I think it is a worthwhile full read. This is not a clickbait article. Great insight into RJ’s thoughts.

Note RJ’s use of the term Premium, not Luxury, lol.

“The objective of our R1 program was to serve as our handshake to the world…..And we did that at a premium price with a flagship set of products, the R1T and R1s, that have led to the R1 vehicles being the best-selling electric vehicles over a $70,000 price point. Within that range there, they are the best selling vehicles in the premium segment today, the best-selling electric vehicles. So as we now look at R2, we need to take that same brand excitement that we've generated, and apply it to a smaller form factor and a much lower price point, and therefore a much bigger addressable market, and carry with it the essence of what was embodied in R1, but make it accessible to so many more people.”
….
“We’re coming off that — there's still people that are involved with the ramp, but a lot of the people that were on that are now moving to our or have moved, I should say, to R2, and so they're directly talking about stuff like, Hey, that was a real big challenge when we had to attach the C pillar trim on this part because the clips do this, this and this. Let's rethink that. Heck, let's get rid of all the clips. Those types of big questions are now coming up.”

Wall Street can see the R2 writing on the wall towards profitability.

Short covering / closing has begun.

Another quote (RJ talking about the R2):

"There’s also dramatic focus on part simplification, joint simplification and manufacturability. So it’s a very, very different vehicle architecture than what we did in R1. All the scars from ramping R1 are informing and driving this deep focus on manufacture building as we go into R2."

I'm pleased to learn that Rivian is prioritizing the machine that builds the machine. This is absolutely critical to achieve Rivian's goal of competing in the affordable mid-size EV market.

We can snicker at the bZ4X, but some of Toyota's recently publicized goals should get your attention: Their goal is to halve the number of production processes, halve the amount of plant investment and halve the amount of production lead needed to set up for new nameplates. (Automotive News 6/12/23)

Mygrain said:

Another quote (RJ talking about the R2):

"There’s also dramatic focus on part simplification, joint simplification and manufacturability. So it’s a very, very different vehicle architecture than what we did in R1. All the scars from ramping R1 are informing and driving this deep focus on manufacture building as we go into R2."

I'm pleased to learn that Rivian is prioritizing the machine that builds the machine. This is absolutely critical to achieve Rivian's goal of competing in the affordable mid-size EV market.

We can snicker at the bZ4X, but some of Toyota's recently publicized goals should get your attention: Their goal is to halve the number of production processes, halve the amount of plant investment and halve the amount of production lead needed to set up for new nameplates. (Automotive News 6/12/23)

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Brings to mind this Elon Musk / Sandy Munro quote: "The best part is no part"

I like short sellers! They help make $RIVN long owners wealthy! $RIVN closing in on $30. R2 platform will get share price back to IPO/FOMO levels.

So as we think about R2, we're simplifying the launch, we have one product that we're launching, it's a new product, leveraging a lot of the existing technology topology that we have in R1.

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This part, to me, sounds like there will only be a R2S. At least initially. Which jives with fact that they’ve only teased a clay model of a midsized SUV.

UnsungZero_OldTimeAdMan said:

This part, to me, sounds like there will only be a R2S. At least initially. Which jives with fact that they’ve only teased a clay model of a midsized SUV.

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Premium/halo vehicles build the brand. Affordable derivatives feed the bottom line. The masses that buy into the brand still want to be adventure adjacent. 100% R2 will launch as a XUV.

I read it as a lesson learned not to launch new vehicles back-to-back. A single R2 variant to start.

UnsungZero_OldTimeAdMan said:

This part, to me, sounds like there will only be a R2S. At least initially. Which jives with fact that they’ve only teased a clay model of a midsized SUV.

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Not the first time we've heard that either.

PappaBolt said:

Premium/halo vehicles build the brand. Affordable derivatives feed the bottom line. The masses that buy into the brand still want to be adventure adjacent. 100% R2 will launch as a XUV.

I read it as a lesson learned not to launch new vehicles back-to-back. A single R2 variant to start.

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I think RJ has said that in an interview recently, that they learned a lot of lessons about launching 3 vehicles simultaneously and they are not going to repeat that. I do think we will see 3-5 R2 variants by 2030 though.

kurtlikevonnegut said:

I think RJ has said that in an interview recently, that they learned a lot of lessons about launching 3 vehicles simultaneously and they are not going to repeat that. I do think we will see 3-5 R2 variants by 2030 though.

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He said it in this interview!

A lot of really good nuggets, as OP said.

Interesting part at the end regarding the closed loop for lithium supply.

"But in my lifetime, we'll also see a world where the source of our lithium is old lithium-ion batteries. And so you get this closed loop and it's why every lithium manufacturer, lithium processor in the world is focused, very focused on access to recycled content, and recycling becomes a really key feedstock as this system starts to reach scale."

It will be really interesting to see how the mining industry evolves over the next 10-20 years to achieve the mineral extraction volume necessary to support the EV transition. EVs are likely to have a 10 plus year average shelf life so we are somewhere around 10 years after near 100% of vehicles are EVs before there enough old batteries to support the closed loop happens. That means we will have to mine the Lithium, and other minerals, for the next 15 years or so depending on how rapid the transition actually is. I think that point he is making and the challenges to get there is underdiscussed. There is a report written by Mark Mills published July 12 this year that discusses this in much more detail. Full disclosure, the Manhattan Institute who funded and published the report is typically anti EV for a variety of reasons (some real, some pretend), but the report does raise some compelling questions that I would love to hear addressed by someone like RJ.

2026 feels so far away!

I anticipate a few more ups and downs before they get there. Not expecting a smooth downhill ski. They are positioned about as well as could've been expected given all of the insanity.

Need to get some of the major issues corrected with R1s first and survive the interest rate and pricing war problems. One bad qtr changes the entire narrative.

I'm very optimistic given the Amazon investment and cash on hand along with generally positive owner reviews and satisfaction.

great read.

RJ said the R1 is and will be the largest consumer vehicle they make. so no larger truck, SUV or camper van is coming.

though im sure some van-lifer will get a hold of one of the EDVs and convert it to a camper.

pricedm said:

I like short sellers! They help make $RIVN long owners wealthy! $RIVN closing in on $30. R2 platform will get share price back to IPO/FOMO levels.

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I'm feeling really good about having made a big buy at $13, but I'm wishing I'd bought two or three times as much... still got an IPO hole to dig back out of