Nearly five years after unveiling its prototype electric pickup truck and SUV for a Normal community looking to restart its idled auto plant, Rivian was back in the town circle Saturday with its second-generation EVs, and the promise of more activity at the now-bustling factory.
The low-key but festive event showcased the midsize R2 SUV, which will be built in Normal after Rivian delayed plans for a second plant in Georgia. The smaller and sportier R3 crossover, whose production plans have yet to be announced, was also on display.
Rivian revealed both new models last month, while springing the news that the R2, at least initially, will be made in Illinois. The company received more than 68,000 preorders for the $45,000 R2 within 24 hours of its online debut.
“It not only allows us to save a lot of capital, it allows us to launch the vehicle sooner,” said Rivian CEO and founder R.J. Scaringe at Saturday’s event. “And based on the reaction to the product, it’s important we launch this as quickly as possible.”
Hundreds of people arrived Saturday on a cool but sunny spring morning, where proptypes of the R2, R3 and R3X were parked under a tent and swarmed by a tire-kicking, photo-snapping crowd of EV enthusiasts and Rivian boosters, of which there are many in Normal.
Rivian builds its inaugural full-size electric R1T pickup truck, R1S SUV and commercial delivery vans for Amazon and AT&T in a renovated 4 million-square-foot auto plant on the outskirts of the college town about 130 miles south of Chicago.
The plant employs 7,000 assembly workers, up from zero after Mitsubishi closed the factory nearly a decade ago.
Scaringe purchased the shuttered factory for $16 million from a liquidation firm in January 2017. Boosted by more than $1 billion in investment and expansion, the plant has built more than 100,000 EVs since restarting production in 2021.
Rivian is expected to save more than $2.25 billion in capital expense by launching production of the R2 alongside the rest of its lineup in Normal and putting plans to build the $5 billion Georgia plant on hold, Scaringe said.
An employee checks details on the Rivian R3X model prior to an unveiling of new models on April 6, 2024, in Normal. (Trent Sprague/for the Chicago Tribune)
“There’s also advantages just in terms of having the teams and the processes and the systems that are now really starting to work well in our Normal facility and leveraging those to launch R2,” said Scaringe.
Rivian built nearly 14,000 EVs in the first quarter and is on target to produce 57,000 vehicles in Normal this year. None of them will be built over the next three weeks, however.
The plant is shutting down for retooling Monday to streamline operations. When it reopens April 28, it will go from three shifts to two, with all assembly line workers expected to keep their jobs, albeit on different schedules.
“We are increasing the overall capacity and efficiency of our lines,” said Tim Fallon, 44, a former Nissan executive who has been vice president of manufacturing operations at the Normal plant since 2022. “Plus, we’re also making a lot of upgrades to our vehicles, many that you won’t see, but they help us with our costs.”
Fallon said the plant will come out of the shutdown operating at a higher line rate, which will enable it to still hit production targets for the year. The first major retooling since restarting the plant is not directly related to the future production of the R2, he said.
The R2 event comes as the rate of EV growth is beginning to slow, hindered by consumer concern about everything from range anxiety and charging infrastructure to sticker shock.
The Rivian R2 during an unveiling of new Rivians in Normal on April 6, 2024. (Trent Sprague/for the Chicago Tribune)
EV market share is expected to reach 8% of total new vehicle sales in 2024, up from 6.9% last year, according to the car shopping website Edmunds. EVs topped the 1 million sales mark in the U.S. last year for the first time.
Through February, EV sales totaled about 161,000 units, or 6.9% of the U.S. new car market, Edmunds said. That’s up 15% from the 140,000 EVs sold during the first two months last year, but far below the 64% growth rate over January – February 2022.
The slowing pace of EV adoption has caused a number of automakers — including Rivian — to adjust their course.
Last week, market leader Tesla announced an 8.5% decline in EVs delivered in the first quarter and reportedly has abandoned plans to build a lower-priced Model 2 for the masses. Meanwhile, Ford said Thursday it would delay rolling out a new electric pickup and SUV until 2026 and 2027, respectively, as it adds gas-electric hybrids to its lineup, a growing trend in the industry.
In February, California-based Rivian laid off 10% of its salaried workforce, including a small number of employees at its downstate Normal assembly plant, amid the broader slowdown in EV demand.
Rivian generated $1.3 billion in revenue and lost more than $1.5 billion in the fourth quarter of 2023. The company had $7.86 billion in cash as of Dec. 31.
But at $45,000 for the R2, Rivian may be in the sweet spot for an untapped EV demand. A study last month by Edmunds found that 47% of potential EV buyers are seeking to spend less than $40,000, while 42% want an SUV or crossover.
Last year, the average transaction price of an electric vehicle was $61,702, while all other vehicles stood at $47,450, Edmunds said. Rivian’s R1 models start at about $70,000.
“The R2 being at $45,000 is something that the vast majority of the population can look at as an option,” Scaringe said. “There’s a lack of choice, we believe, in that price category for really nicely done EVs.”
More than 3,000 people pre-registered for the four-hour event Saturday, showing up at scheduled half-hour increments to afford an unhurried look at the new models.
Many circled around the R2, R3 and R3X prototypes in the open-air showroom, comparing notes, taking photos and in some cases, plunking down a $100 refundable deposit to reserve the first ones off the line in about two years.
Andrew Garcia, his wife and their two young daughters, who live in Normal, made their deposit after the online reveal last month, and visited what they believe will be their first EV Saturday.
An analyst with Country Financial in Bloomington, Garcia, 32, said the midsize R2 fits their needs better than the R1, and by the time it goes into production, they will likely be ready to trade in their gas-powered Kia Telluride for a Rivian.
“We don’t have an electric, but we’ve been looking for an electric, and the R2 definitely fits the bill,” said Garcia. “We have to make a decision in 2026 when it rolls around, but as of right now, it looks very promising.”
Kyle Conner, 28, an EV YouTube content creator, drove 1,000 miles from his Fort Collins, Colorado, home in a Tesla to get an up close look and post videos of the new Rivian models in Normal. Conner, who also owns a Rivian R1, said the R2 will likely be a big hit, despite a few reservations.
Among the many features that caught his eye, the R2 is the first Rivian built with a native port for the Tesla Supercharger network.
Last year, Tesla agreed to make its highly-rated charging network accessible to Rivian and other manufacturers, enabling it to tap into $7.5 billion of federal funding from President Joe Biden’s bipartisan infrastructure law to expand public EV charging capacity.
Conner said the biggest selling point for the R2 was the $45,000 price tag. “What we don’t know yet are the final specifications,” he said.
Cassy Taylor, 55, of Lexington, who serves as the McLean County Administrator, was considering putting the $100 deposit on the R2 Saturday after seeing it in person.
Taylor, who drives a Subaru Crosstrek, has been eyeing a Rivian since it launched production two-and-a-half years ago. She said the R2 is a better size for her than the R1.
“They’re smaller vehicles, similar to the SUV I drive now,” Taylor said. “I think that might be more suitable for my needs and easier to park.”
Knowing that it will be built in Normal may have sealed the deal for her.
“It’s an investment in our community,” Taylor said. “And we’re really excited that they are making the cars here.”
Matt McLoughlin, 38, of Mackinaw, a test technician at Rivian since 2021, came to the event Saturday for his first look at the new models, which have generated a buzz among his fellow employees.
Set to go on break during the factory retooling, he used his first day off to get a glimpse of the future.
“I am totally excited for the opportunity to build the R2 in Normal,” McLoughlin said. “It is a huge opportunity for us.”
Rivian was initially lured to Illinois by $4 million in local incentives and about $50 million in state tax credits over 15 years if it meets employment and investment targets at the Normal facility. Those goals included creating 1,000 jobs by 2024, a number it has long since surpassed.
In addition to expediting production, Rivian may have had another motive for doubling down on Illinois — new financial incentives dangled by the state.
“DCEO has been in conversations with Rivian about potential incentives for its planned expansion,” said Eliza Glezer, a spokesperson for the Illinois Department of Commerce & Economic Opportunity. “No incentives have been executed for the R2 expansion.”
While the shift of initial R2 production to Normal may be a near-term boon for the central Illinois plant, one prominent auto industry analyst predicted Rivian’s long-term manufacturing future remained in Georgia.
Sam Fiorani, vice president of global vehicle forecasting at AutoForecast Solutions, a market research firm, said Rivian may move production of the R1, R2 and R3 to the planned Georgia plant by the end of the decade, seeking improved efficiency, volume and a larger pool of assembly workers.
In such a case, the Normal plant may either be reduced to the narrower and more competitive lane of commercial EV production, or close entirely, he said.
“If the company is doing well, the likelihood of them building the second plant and moving there is high,” Fiorani said.
The Georgia plant likely won’t open until 2027, and its future may depend on the initial success of Rivian to ramp up production and sales of its next-generation R2 out of the Normal plant, Fiorani said.
“If they don’t start making money, and soon, the idea of moving to Georgia could be put on the backburner even further,” Fiorani said.
On Saturday, Scaringe dismissed that theory, reiterating his commitment to Georgia and Normal, which he said would be the production home to the R1 for the foreseeable future.
He also hinted that R2 and potentially R3 — which is built on the same platform — could be made in Illinois, even after Georgia opens.
“Normal will do R1, R2 and potentially more,” Scaringe said. “We’re anticipating many hundreds of thousands of units of demand, ideally over a million units of demand across the globe. That means we will have at least two plants producing the vehicle.”
When Rivian hosted its first open house in the Normal town circle in fall 2019, the sprawling plant on the outskirts of town was still a hulking shell and empty parking lot overrun by geese. Now cranes are hovering over the factory in preparation for the retooling.
On Saturday, kids frolicked in the green and a few local merchants set up booths around Uptown Circle, while an amplified coffee-shop guitarist kept the vibe upbeat but mellow. In addition to the new models, Rivian also parked several R1 EVs on the circle, offering canned water from the ice-filled frunk of a $70,000 pickup truck. Nearby, scores of attendees lined up for test drives in an R1.
The drivable R2 and R3 prototypes were for display purposes only.
The lanky, bespectacled Scaringe, his right arm in a sling from a mountain biking mishap, ambled through the crowd, casually greeting employees, customers and residents.
Reflecting on the open house five years ago, when he unveiled the first Rivian prototypes with little fanfare before the EV factory had been built, Scaringe, 41, thought about how far his auto company has come.
“I remember there were two cars — a truck and an SUV, early prototypes — and that was it,” Scaringe said. “And now there’s 100,000 vehicles on the road and we’re cranking one of those out every couple of minutes. It’s pretty wild.”
rchannick@chicagotribune.com
