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

• Rivian CEO RJ Scaringe says the EV industry slowdown is due to an "extreme" lack of choice.
• Scaringe attributes it to a lack of variety in EV models under $50,000.
• He believes there's a demand for diverse EV designs to compete with Tesla's dominance.

Rivian CEO RJ Scaringe said the EV industry may be growing at a slower pace — but it's still growing, according to an interview published Monday with The Verge.

The CEO said there's bias skewing conversations about EV growth and what's caused a slowdown. Some, he said, are attributing it to EVs 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.

The CEO said that the market is "fairly saturated with Teslas," and while Tesla's Model 3 and Model Y are "highly compelling, great products," there's a lack of competition from similar models from other brands. Tesla's 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 Tesla's Model 3 and Model Y have replicated the shape and feel of the vehicle to the point that it's "almost identical" to Tesla's version. But Tesla still outperforms the competition, he said, without being specific about the alternative brands or products.

He said that phenomenon has created a gap between EVs 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 have chosen one brand and have had to compromise 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 similarly to the R1, Rivian's R2 is "very intentionally" "not trying all to be a Tesla Model Y." He said while it will 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 will 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 also 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 believes there is a "massive" untapped market for EVs that meets customers' desires for design, functionality, brand image, and aesthetics to convince them to ditch their gasoline-powered cars.

"That's not to say Model Y isn't a great car," Scaringe said. "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.