Rivian may have figured out one of the hardest parts of building an affordable EV, as it has managed to reduce costs in producing one of its upcoming EVs. During the latest earnings call, the company said the upcoming R2 has achieved a cost reduction of more than 50% compared to the R1. With the R2 being made as the more accessible mass-market EV, this is a big deal.
How Rivian found ways to save up
According to InsideEVs, Rivian outlined several ways it brought costs down. The company reduced the R2’s wiring harness by 2.3 miles, cut the number of connectors by 60%, and reduced high-voltage cabling by 70% by consolidating multiple power conversion units into one. The company also simplified its new Maximus Drive unit, which has 41% fewer parts compared to the Enduro drive units used in R1 vehicles. Rivian mounted the inverter directly on the drive unit and used smarter cooling and packaging to cut parts and manufacturing complexity.
All of this sounds like boring manufacturing stuff, but it is making a real difference now. Fewer parts usually mean lower cost, easier assembly, fewer failure points, and better scaling.
The upcoming Rivian R2 is using a simpler mechanical setup, which reportedly helped achieve 70% cost savings on the front suspension by moving from a double-wishbone setup to MacPherson struts.
Meanwhile, large die castings also reduced the underbody part count by 90%, while rear door complexity was cut by 65%. CEO RJ Scaringe expects a reduction of more than 50% through design-for-manufacturing work and higher production volumes. He further added that this is how the company expects to ship the T2 profitably, while also keeping it at a more accessible price point without losing performance and utility.
So what about the buyers?
Rivian has positioned the R2 as a more affordable EV, with a target price around $45,000. But the T2 Performance is expected to kick things off at around $58,000 when deliveries begin. The expected price tag reveals that this isn’t an affordable car, though it is still more approachable than the R1S and R1T, which are positioned as premium models.