Rivian is currently at around 50,000 vehicle sales a year. That’s more or less the total number of sales the Tesla Model S and Tesla Model X were each getting before the Model 3 went into production. That’s fine. For now. But really, Rivian needs to reach higher volumes.
How do you reach higher volumes? With lower prices. Now that the Tesla Cybertruck has been officially launched and deliveries have begun, we’ve gotten to see its pricing and specs. It turns out the pricing is much higher than initially projected and the range is much lower. It also turns out that the Cybertruck is super powerful and has some nifty features, like drive by wire and a 48V low-voltage battery. Rivian may struggle to compete on specs alone, but there’s much more of an opening on the lower end of the truck market, or by buffing up its range.
With that in mind, it’s interesting and perhaps notable that Rivian just laid off 20 long-range battery cell development team members. For more context, that’s “less than 8%” of the company’s battery team. A Rivian spokesperson has said that these layoffs are due to a change in priorities. In particular, the goal now is to focus on more affordable vehicles — and developing more affordable batteries for those vehicles. Rivian may be waving the white flag on performance/specs, but it seems it may have an aim to compete on cost more and sell in higher volumes. We’ll see.
Among those laid off, one big name is Victor Prajapati, Rivian’s lead cell engineer and a former senior manager at Tesla.
“While we place a very high value on the cell engineering competence we have built at Rivian, we’re focusing the team on R2 [compact SUV] and its defined programs,” the spokesperson added.
Rivian will continue to get battery cells from Samsung SDI in South Korea. But one wonders if an in-house system will phase out the need for R2 to a dramatic degree.