Rivian CEO Says Tesla’s 50% Market Share Shows ‘Underserved Market’ as $45K R2 Nears

Rivian CEO RJ Scaringe isn’t backing down from Tesla. He’s coming for its customers.

In a wide-ranging interview with The Atlanta Journal-Constitution, Scaringe laid out an aggressive vision for his company’s future, declaring that Tesla’s dominant market position proves the EV market remains ripe for disruption.

“So having a single player with nearly 50% market share is not a reflection of a healthy market,” Scaringe said. “It’s a reflection of a highly underserved market.”

The bold statement arrives as Rivian prepares to launch its make-or-break R2 crossover in early 2026, targeting the exact customers who made Tesla’s Model Y the best-selling EV in America.

R2 Deliveries Start Early 2026 at $45,000

Scaringe confirmed customer deliveries of the R2 will begin in the first half of 2026, with an unwavering $45,000 starting price despite tariff pressures and a collapsing EV market.

The R2 represents Rivian’s first mass-market play. Current R1T trucks and R1S SUVs average around $88,500, limiting the company’s customer base to wealthy early adopters.

“R2 delivers on the adventurous spirit customers expect from Rivian,” Scaringe said in a recent shareholder letter. “It’s also a great daily driver that will fit so many different use cases for our customers.”

The company announced nearly 70,000 preorders within 24 hours of the R2’s March 2024 reveal. Scaringe declined to update that figure but said “the excitement hasn’t waned.”

Production will initially launch at Rivian’s Normal, Illinois facility, which has been expanded to handle up to 155,000 R2s annually.

Georgia Factory Delayed to 2028

Rivian’s $5 billion Georgia factory, first announced in 2021, now won’t open until 2028, years behind original projections.

Construction will begin in 2026 at the 2,000-acre site east of Atlanta, with vertical building following a September groundbreaking ceremony attended by Governor Brian Kemp.

The project promises 7,500 permanent jobs by 2030 and up to 400,000 vehicles annually at full capacity. State and local officials provided a $1.5 billion incentive package tied to meeting hiring and investment milestones.

A $6.6 billion federal loan from the Department of Energy, finalized in the final days of the Biden administration, provides additional funding, though the Trump administration has scrutinized clean energy loans.

“This is an investment you don’t make for one product cycle,” Scaringe said of the Georgia facility. “You make the investment for many product cycles. It’s a multidecade, multi-billion dollar investment.”

Volkswagen Partnership Gives Rivian Supplier Leverage

The VW-Rivian joint venture, worth up to $5.8 billion, has transformed Rivian’s negotiating position with parts suppliers.

Rivian’s software and electrical architecture will power vehicles across Volkswagen’s portfolio, including Porsche, Audi, and Bentley brands. The first VW models using Rivian technology arrive in 2027.

“Suppliers are super excited to work with us because the choice we make in Rivian vehicles is also the choice that goes into Volkswagen vehicles,” Scaringe explained. “It’s a complete flip of the nature of that relationship.”

The partnership provides crucial capital as Rivian races toward R2 production while still losing money on every vehicle it builds.

Software-First Strategy Targets Legacy Automakers

Scaringe emphasized that Rivian employs more software and computer engineers than mechanical engineers, a deliberate strategy to compete in an industry increasingly defined by code rather than combustion.

Traditional automakers rely on more than 100 small electronic control units scattered throughout their vehicles, each handling discrete functions like seat adjustments or mirror controls.

“It’s a very, very messy architecture,” Scaringe said. “It’s precisely the opposite of what you’d want to have.”

Rivian and Tesla use centralized domain control units that reduce complexity and enable over-the-air updates. Scaringe believes automakers without this capability will either develop it themselves or find a technology partner.

The recently opened Atlanta Beltline headquarters will employ 500 workers by the end of next year, focusing on research and development that Scaringe considers equally vital as manufacturing.

The EV Conversion Argument

Despite headwinds facing the EV industry, Scaringe remains bullish on electric vehicle adoption.

“The more people that experience an EV, it’s like a one-way door,” he said. “It’s hard to go into an EV and then back to a gas-powered vehicle.”

Cox Automotive data shows Tesla’s Model Y and Model 3 accounted for more than 40% of all U.S. EV sales through September 2025. Scaringe views that concentration as an opportunity rather than an obstacle.

“We didn’t design the business to be selling 50,000 cars a year,” he said. “We have a cost structure, particularly on the R&D side, that was set up to be a much, much bigger business.”

EVXL’s Take

RJ Scaringe is talking a big game at the worst possible moment to be talking a big game.

Less than eight weeks ago, the $7,500 federal EV tax credit expired, and we documented the immediate fallout: October EV sales collapsed 24% in a single month. That demand cliff we warned about back in July has arrived exactly as predicted.

Rivian itself hasn’t escaped the carnage. In late October, the company cut 600 jobs, its third workforce reduction in four months. When we covered Rivian’s Q3 earnings, we noted that the company’s delivery surge was artificially inflated by customers racing to claim tax credits before they vanished. Now that temporary surge has evaporated.

Yet here’s Scaringe, promising 7,500 Georgia jobs while simultaneously cutting headcount. Pledging a $45,000 price point while Rivian loses money on every vehicle. Declaring Tesla’s market dominance signals opportunity while his own sales stagnate around 50,000 units annually.

The VW partnership does change the calculus. As we reported when VW and Rivian began exploring licensing their tech to rivals, the $5.8 billion deal provides both capital and legitimacy. Having Porsche and Audi validate your software architecture matters.

But there’s an uncomfortable disclosure lurking in this story. Cox Enterprises owns approximately 3% of Rivian. Cox Enterprises also owns The Atlanta Journal-Constitution, the publication that conducted this glowing interview. A Rivian shareholder’s newspaper promoting Rivian’s Georgia investment isn’t exactly independent journalism.

The real test comes in 2026 when the R2 hits showrooms without a $7,500 government subsidy making it competitive. Tesla already dropped the Model Y to $39,990. Chinese competitors are circling. The EV market that existed when Rivian announced those 70,000 preorders no longer exists.

Scaringe says “now it’s about execution.” He’s right. The margin for error has disappeared along with the tax credits.

What do you think about Rivian’s chances against Tesla in the post-subsidy market? Share your thoughts in the comments below.