The mood was spirited at a waterfront railway yard in Oakland.
On Wednesday morning, well over a hundred people had gathered inside the repurposed space to see what Rivian’s spinoff company ALSO had been stealthily cooking up for several years.
The project turned out to be a $4,500 e-bike. The platform has little to do with Rivian’s cars, but it stays close to the heart of CEO RJ Scaringe, whose kids attended the event to help celebrate the unveiling.
If there was any indication that the CEO was mentally prepping to lay off several hundred employees at his automotive company on Thursday, he didn’t reveal it when he spoke to me.
“I’m super excited,” Scaringe said after I asked about the atmosphere inside Rivian as they prepare for the launch of a new model. “For us, it’s the most important point of the company — in the history of the company.”
Rivian is gearing up for the production of R2, which will be the company’s most affordable model to date. If price is the barrier to entry for drivers considering EVs, then the R2 — a $45,000 SUV — is Rivian’s answer.
Phillip Faraone/Getty Images for Rivian
While the R1 is a flagship product that sets the tone for the company’s premium, adventure-focused brand, the R2 will be what takes Rivian to wider audiences. The CEO drew a parallel to Tesla, noting how the Model 3 attracted a larger number of customers with its $35,000 base price.
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“Tesla — their flagship products, the Model S and Model X, were relatively low volume. And for them, that explosive point was when they launched the Model 3,” the CEO said.
In 2018, Tesla CEO Elon Musk also called the Model 3 a “bet-the-company” situation. Musk later revealed that the company was on the brink of bankruptcy.
I asked Scaringe if the R2 was Rivian’s Model 3 moment, in which the company’s future depends on a successful launch. He said that he’d call the car “an inflection point.”
“For us to become a company of the scale we aspire to be, which is producing many millions of cars a year, we’re not going to get there with a $90,000 single flagship product,” he said. “We need R2, we need R3. And so R2 is the critical step to get there, and if we don’t make that step, if we don’t launch R2, we’ll stay a fairly small company.”
The path to R2 has already seen some downsizing. Last year, Rivian laid off 10% of its salaried staff, marking the company’s third round of layoffs since 2023. Rivian also laid off less than 1.5% of the workforce last month, according to multiple reports.
On Thursday morning, employees began to receive word of another restructuring. The Wall Street Journal reported the decision to lay off more than 600 employees, or about 4.5% of the workforce, hours before Scaringe sent out a companywide statement.
“Everyone I know was shocked,” a worker who was affected by the layoffs told me. “Employees were talking about it yesterday, and it created a panic as there’s really not that many employees left in many departments.”
A spokesperson declined to comment.
On Thursday afternoon, Rivian sent Business Insider the internal memo Scaringe shared with all 15,000 of his company’s employees. The CEO wrote that Rivian had made the “very difficult decision” to reduce its workforce by 4.5%, citing the launch of R2 “and the need to profitably scale our business.”
The memo said the areas most affected were around customer service and marketing. Scaringe wrote that he would be filling in as interim Chief Marketing Officer.
I asked Scaringe if the production of R3, Rivian’s crossover that is also generating hype from fans, will hinge on the success of R2.
Scaringe said he doesn’t think like that.
“One of the questions I get asked a lot, and I can see why, is some version of ‘What are you going to do if you fail?'” he said. “I have such a different perspective because the likelihood of failure is the lowest it’s ever been in this moment. The highest likelihood of failure was the first day. A car company with one employee, no capital, no team, no plant, no technology, no brand, no nothing.”
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