Rivian surges as new launch R2 SUV attracts strong early orders

By Thomson Reuters Mar 8, 2024 | 9:30 AM

By Akash Sriram

(Reuters) -Rivian shares jumped 8% on Friday as its cheaper R2 SUV racked up tens of thousands of reservations within hours of its launch, fueling optimism that the electric vehicle maker could expand in the mass-market segment.

Unveiled on Thursday, the smaller R2 SUV, which will start at $45,000, has attracted more than 68,000 reservations, CEO RJ Scaringe said in a post on X.

“Given Tesla has shown little ambition to move into the SUV space, Rivian could be one of the few EV SUVs on the market that most investors will likely want to buy over the next 3-4 years,” Evercore ISI analyst Chris McNally said in a note.

Rivian plans to start producing the R2 at its existing U.S. factory to hasten deliveries in the first half of 2026.

The Amazon-backed EV maker hitting pause on the construction of its second factory in Georgia may result in cost savings that will delay further fundraise, analysts said.

The move is expected to drive additional savings of more than $2.25 billion for the company compared to its prior forecast.

In a surprise move, Rivian also introduced the R3 and a more powerful R3X variant on Thursday. The R3 will be cheaper than the R2 and will be launched after that vehicle.

The launches come when EV demand is rising at a slower pace than automakers had expected, forcing market leader Tesla to slash prices to spur sales of its aging model lineup.

Rivian’s shares are down over 52% so far this year, before the launch on Thursday.

Including Friday’s gains, Rivian’s shares were up 19% this week and set for their best week since the week ending Dec. 15.

At current levels, more than $1 billion was set to be added to the company’s market value of $12.23 billion, if the gains hold.

(Reporting by Akash Sriram in Bengaluru; Editing by Sriraj Kalluvila)