Rivian R2 Becomes Best-Selling Model, Prompting Delivery Forecast Increase
The midsize SUV outsold R1 and delivery vans in Q3, leading Rivian to raise its annual baseline to 67,000-70,000 units.
Rivian has revised its annual delivery guidance upward after its new R2 midsize electric SUV became the company’s best-selling model within months of launch. The California-based automaker reported strong third-quarter results that included record deliveries and significant revenue growth, driven largely by the R2's rapid market uptake.
What Happened
In its third-quarter earnings report released Thursday, Rivian confirmed that the R2 outsold its other vehicles, including the R1T, R1S, and electric delivery vans, between July and September. Following a record 19,751 deliveries in Q3, the company increased its annual delivery target baseline from 65,000-70,000 units to 67,000-70,000 units. This marks the second revision to the forecast this year, as the previous baseline had been raised from 62,000 units. CEO RJ Scaringe noted that customer and media feedback on the R2 has been exceptional, describing the vehicle's performance as a key driver of the quarter's results.
Why It Matters
The R2's immediate success is critical for Rivian's financial trajectory, serving as a pivotal vehicle for the company's turnaround efforts. Q3 revenue grew 38% year-over-year to $2.1 billion, aided by increased deliveries, regulatory credits, and a 45% jump in software and services revenue to $605 million, the latter bolstered by its partnership with Volkswagen Group. Despite this top-line growth, Rivian remains unprofitable, posting an operating loss of $881 million for the quarter, though this represents a $102 million improvement from the same period last year. The R2 is expected to fund the development of future models like the R3 and R4, as well as support the company's autonomy ambitions.
The Bottom Line
Rivian's revised outlook reflects confidence in the R2's demand, but the company must now balance this volume growth with its path to profitability. The success of the R2 also sets the stage for the rollout of advanced autonomy features, with a limited release of point-to-point city driving expected by the end of this year and a planned delivery of 50,000 robotaxis to Uber starting in 2028.
