Rivian’s CEO has a theory for the slowdown in EV growth

Rivian CEO RJ Scaringe explained his theory on the EV slowdown in an interview with The Verge released Monday.

Rivian CEO RJ Scaringe says the EV industry may be growing at a slower pace — but it’s still growing.

In an interview with The Verge published Monday, the CEO said there’s bias skewing conversations about EV growth and what’s caused a slowdown. Some, he said, are attributing it to electric vehicles that just haven’t had success with development and launch.

But Scaringe shared a theory, which boils down to a “truly extreme lack of choice.”

“If you want to spend less than $50,000 for an EV, I’d say there’s a very, very small number of great products,” Scaringe said.

He said the market was “fairly saturated with Teslas,” adding that while Tesla’s Model 3 and Model Y were “highly compelling, great products,” there’s a lack of competition from similar models from other brands. The Model Y remains the world’s best-selling vehicle, and the second-most-popular vehicle from the EV giant is the Model 3 sedan.

Scaringe said that the products competing with the Model 3 and Model Y have replicated the shape and feel of the vehicles to the point that they’re “almost identical” to Tesla’s cars. But Tesla still outperforms the competition, he said, without specifying the alternative brands or products.

He said that had created a gap between the EV industry and the gasoline-powered-vehicle space, where customers have hundreds of options in terms of brands and models. Due to the lack of choices, Scaringe said many customers had chosen one brand and compromised on some of their vehicle preferences.

“Maybe they wanted something that was a little bit bigger, but they got something that was more like the Model Y,” Scaringe said. “Maybe they didn’t love the Tesla look, but it’s the best product, so they took the Model Y.”

The CEO said that like the R1, Rivian’s R2 is deliberately “not trying at all to be a Tesla Model Y.” He said while it would compete with Tesla in terms of pricing and size, it’s not a replica.

The R2 SUV will fit in with the brand’s outdoorsy design and is estimated to start deliveries in 2026. The model is set to cost $45,000, comparable to Tesla’s Model Y, which starts at $43,000.

Tesla focuses mostly on sedans and SUVs, while Rivian has built its brand around serving customers who want larger vehicles and better off-roading capabilities. Rivian’s more-expensive vehicles are like a combination of Tesla and Jeep.

While Tesla may be at the forefront of the EV market, it has experienced a slowdown. The company had a rough first quarter, with its lowest quarterly deliveries since 2022. Tesla’s sales dropped again in the second quarter, but the 5% decrease was better than analysts expected.

Scaringe said he believed there’s a “massive” untapped market for EVs that meets customers’ desires for design, functionality, brand image, and aesthetics to persuade them to ditch their gasoline-powered cars.

“That’s not to say Model Y isn’t a great car,” Scaringe added. “I think it’s an awesome car. I’ve owned one before. It’s just to say that I think the world needs more variety.”

Rivian did not immediately respond to a request for comment.