As triumphant as the Rivian team seemed while unveiling the new R2 and R3 SUVs today, something far more concerning was happening behind the scenes—namely, hitting pause on the new $5 billion Georgia factory where some of those cars will be built.
The dichotomy said a lot about where Rivian is at right now: a hugely ambitious and increasingly popular EV startup that is far from out of the woods on its startup problems. And after today, it’s worth asking whether Rivian can hold on until those future models are on the roads.
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The Rivian R1 and EDV are no doubt good products, but the brand has struggled deeply with profitability and volume. The R2 and R3 could bring more volume, but two years is a long time to wait for its new models. The brand could potentially run out of money before, or shortly after the R2 launches.
The R2, R3 and R3X certainly seem impressive, but the R2 isn’t expected to hit the streets until early 2026. The R3, which arguably garnered more social media excitement, has no official projected release date—just “after R2.” And the move to pause construction at the future facility near Atlanta was both a bid to conserve cash and accelerate production of, at least, the R2. Until then, Rivian revealed that it plans to make the R2 at its existing assembly plant in Normal, Illinois, the former Mitsubishi factory is where Rivian makes all of its current vehicles: the R1T pickup truck, R1S SUV, and EDV delivery van.
“Our Georgia site remains really important to us,” CEO RJ Scaringe said during today’s event. “It’s core to the scaling across all these vehicles. And we’re so appreciative of all the partnerships we’ve had there.”
Scaringe added, “But being able to leverage the team the skill, the passion we have in our Illinois facility to get [R2] to market as quickly as possible… we are just ecstatic about that.”
According to industry insiders, it’s going to be a rocky road.
Rivian says the switch will save it over $2.25 billion. That’s important for a company that burned through $5.4 billion last year and needs to stay afloat until the R2 can bring it some more serious cash flow. Smaller and cheaper than Rivian’s current offerings, the roughly $45,000 R2 should help the startup cast a wider net and move more metal than ever when it goes into production in the first half of 2026.
To do that, though, it needs to subsist on sales of the R1S and R1T for the next two years—all while spending piles of cash to get R2 production going. That’s where saving $2.25 billion by moving factories may come in handy. But two years is a very, very long time.
Sure, the R2 and R3 may look attractive on paper, but they will land in a market packed with more competitors than Rivian faces today. And the federal EV tax credit is a moving target. Rivian’s got to get these crossovers on the road before it loses the market, or runs out of money.
“The challenge is that timeline,” said Sam Abuelsamid, a mobility analyst at Guidehouse Insights. “The R2 is similar in size to the Jeep Wrangler and Recon. The Recon goes into production in Q4 of this year and will likely have an 18-month head start on the R2.”
The $45,000 starting price of the R2 will put pricing pressure on Jeep for the Recon, but they have already been moving in the last month to cut prices and cut costs in the wake of declining sales.
Corey Cantor, Senior Associate at BloombergNEF, seconded that analysis. “The SUV segment is already competitive, but a $45,000 R2 would be available at a price that nearly two-thirds of SUV and pickup buyers paid for in last year’s U.S. passenger vehicle market,” Cantor said.
“A late 2026 shipping would be concerning, mainly because of how different and competitive the market could look by then,” he added. “So sticking to this timeline and price point will be key. The most critical thing overall is Rivian showing that they can begin producing EVs at volume and for a profit—to cross that ‘EV Valley of Death.'”
True, the R2 and R3 appear to hit that sweet spot of the affordable SUV segment. They certainly take direct aim at the Tesla Model Y, ostensibly the world’s best-selling car regardless of propulsion type, and one that also sits right at the same roughly $45,000 price target as the R2 and R3.
It’s one thing to take on Tesla, but Rivian will no doubt be faced with more competitors within the next two years, including the similarly sized and priced Recon, Chevrolet Equinox EV, and likely a refreshed (or maybe even all-new) Model Y.
In the meantime, Rivian’s been burning through cash. The R1 has admittedly been an expensive model to produce, although some product optimizations have helped the brand get better. Still, it’s facing a very rocky uphill battle.
“While some production of the R2 is planned to start in Normal in the first half of 2026, it probably won’t reach full volume rates until the Georgia factory is complete,” Abuelsamid said. “And the R3, which has no announced production timing, probably won’t be built at all until that new factory is ready. Unless they get costs on the R1 and [EDV] under control while also spending on the new factory, they risk depleting the $7.8 billion they have by the time the R2 launches.”
With bleak numbers like those, it’s easy to see why Rivian opted to pause its Georgia factory for now.
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Still, two years is a long time for the company to soldier on with just two products. But Rivian spokesperson Elizabeth Marksman told an InsideEVs reporter that it plans to keep the R1 model line fresh.
She said that “something will happen with its flagship product over the next two years,” but declined to elaborate on what that could be, or when it will happen.
Contact the author: kevin.williams@insideevs.com
Additional reporting by Tim Levin.
