What Is Rivian Building That Investors Should Watch?

Shares of Rivian Automotive (RIVN) have fallen 25% over the past three months, while the S&P 500 gained 3.4%. The company is currently ramping up a cheaper new SUV at its plant in Normal, Illinois, and that launch may be what bullish investors are betting on. So what is the new vehicle, and are buyers taking to it?

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Rivian’s Cheaper R2 SUV Is Already Reaching Buyers

The R2 represents Rivian’s attempt to capture a broader slice of the mass EV market with a cheaper SUV. The automaker started by releasing the most expensive version at $58,000. It plans to introduce lower-priced standard trims in early 2027.

Early signs of demand have beaten internal expectations. Executives noted on a July 30 call that R2 reservations were turning into orders at a rate meaningfully higher than they anticipated, adding that a significant number of those buyers are first-time EV owners. Rivian delivered 19,248 vehicles in the third quarter. That figure is up 46% from a year earlier and marks a record high, Reuters reported, as the R2 rollout gained momentum.

The bulk of the launch remains ahead. The company expects 2026 deliveries to be weighted toward the fourth quarter as R2 production ramps.

The R2 Sells Into Rivian’s Biggest Business

The R2 falls under Rivian’s automotive segment, which accounted for 71% of the company’s revenue in fiscal 2025. Selling a cheaper vehicle to a broader market carries high stakes for the overall company. Yet that segment’s revenue fell 14.6% from fiscal 2024.

Executives raised their 2026 delivery forecast by 3,000 vehicles in July, bringing the target to between 65,000 and 70,000 across the R1, the R2 and the commercial van. Rivian reaffirmed that range on October 2 when reporting its third-quarter deliveries.

The stock trades 40.4% below its 52-week high. Investors still value the business at 3.0 times its revenue over the past twelve months, tracking closely with the S&P 500’s 3.1. Rivian lost money over those same twelve months. The current price appears to assume the automaker will eventually grow its sales into a profit.

What Has To Go Right For Rivian’s R2?

The R2 must start generating money as output climbs. The production ramp added about $100 million to the cost of revenue in the second quarter, according to July statements from executives. They also noted the complexity of the launch would hurt automotive gross profit in the third quarter, and those results have yet to be released. The company is targeting a positive gross profit on the R2 by the end of 2026.

Supply remains a worry. Executives noted that Rivian’s production output is gated by its slowest-moving supplier. Demand is also harder to measure from outside. The company stated on the July 30 call that it is not providing specifics on how many people who take a demo drive go on to order.

The automaker is simultaneously raising outside money alongside the R2 ramp. Rivian sold about $1.3 billion of new shares in July, meaning each existing holder now owns a proportionally smaller slice of the company.

The company maintains that the R2 has found buyers so far, leaving its cost as the part still unproven. Rivian recorded an automotive gross profit loss of $36 million in the second quarter, against a loss of $335 million a year earlier. That gross profit stands as the critical figure to watch, starting with Rivian’s third-quarter results.

Does This Mean You Should Act On RIVN?

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