The head of electric vehicle maker Rivian says the future is not just EVs, it’s artificial intelligence and autonomous vehicles. And it’s coming sooner than you might think.
Rivian CEO RJ Scaringe scattered enthusiastic comments about AI and autonomous vehicles throughout an hour-long third quarter earnings call with financial analysts.
“That is our north star,” said Scaringe.
Scaringe said over time the auto industry curve will bend toward electric vehicles defined by software and vehicles with high levels of autonomy, or self-driving capability. A number of electric vehicle makers have done joint ventures or partnerships with robo-taxi companies. Rivian hasn't, although Scaringe said the company is open to that. Other opportunities include autonomous delivery vehicles or freight trucks. Scaringe said those are not the sweet spot for the marketplace.
“By far and away the largest revenue opportunity is consumer owned vehicles, or vehicles owned by a household. That represents well in excess of 95% of the miles driven in the United States, and that’s largely true for Europe as well,” said Scaringe.
He said the size and shape of vehicles, range and price all matter but high levels of autonomy will drive a lot of demand.
“What will unlock a lot of folks that may not have even been considering Rivian or an EV to say wow, I really like this car, but I like the fact it can give me my time back. It can drive places with me sitting in the car on my phone getting my time back,” said Scaringe.
Scaringe is also making a case for Rivian's choice of mid-sized SUV as its next model. The R2 is due out next year, ramping to full production by the end of 2026 at the plant in Normal. He said that mid-sized segment works well with fully electric architecture and a price point comparable to internal combustion engine vehicle or hybrids and is potentially key to autonomous driven vehicle markets.
Scaringe said he thinks some manufacturers will continue with hybrids. Others will do extended range electric vehicles that combine features of both plug-in hybrids and EVs. Scaringe said Rivian does not have plans to offer an extended range combo vehicle. But autonomous features will be everywhere and a key part of purchasing decisions by the end of the decade. And EVs will be highly competitive in that space.
This might seem a little pie in the sky. The U.S. Energy Information Administration noted combined EV and Hybrid vehicle sales posted a record in the third quarter but it's still just 21% of the total market.
Scaringe, though, said the rate of EV adoption ties heavily to the number of highly compelling offerings. And so far there is just a single dominant brand with two offerings, Tesla and its model Y and model 3.
“With them taking up roughly half the market, 50% market share [of EVs], it’s not a reflection of a healthy market, it’s a reflection of a very underserved market in terms of choice and options,” said Scaringe.
He said Rivian's R2 will have the same size and similar price point as Tesla, but is very different. He said there will be a lot of flex in variations of the vehicle that will attract people who are not necessarily looking specifically an EV. Scaringe pointed out the R2 price of $45,000 is under the $50,000 median for all passenger vehicles sold in the U.S.
Getting to autonomous driving by that end-of-decade prediction will not be easy. Tesla has had mixed success. Robo-taxis have yet to achieve wide deployment. Autonomous delivery vehicles are, as yet, a dream, though several companies are working toward that goal.
Scaringe acknowledged there are challenges in balancing innovative features and affordability. He said ‘the magic’ lies in making countless trade-offs to create an advanced yet accessible product. And over time, Scaringe said he's confident autonomous driving will grow.
“First, expansion of the number of roads that we have hands free on. Then, overlaying that with point-to-point address-to-address navigation. And then following that adding in for select specific environments, hands off and eyes off, which is an important one. And over time, growing the number of locations,” said Scaringe.
Scaringe told analysts, Rivian is well positioned to use AI to develop autonomous software.
“With the launch of R2, our rowing fleet of customer vehicles will collect real world driving data which will complement the data already collected by our 2nd generation R1 vehicles,” said Scaringe.
He said over the long term what will set Rivian's autonomous capability apart is what will be an end-to-end AI centric approach.
“That data can be used to train our large driving model which we believe will allow rapid rollout of updating driving inference models with growing capabilities,” said Scaringe.
He said Rivian will show some of the synergy between its existing software, driver data and AI at a company autonomy day Dec. 11. The company said it will demonstrate hardware, software, the company data flywheel and what its vehicles can do.
AI-enabled robotics
Rivian is also putting a marker down on AI in another arena, industrial manufacturing. Earlier this year, Rivian created a spinoff company to do E-bicycles, scooters and other personal transportation modes. Now, it has a second spinoff called MIND Robotics.
“The applications will include Rivian applications but also much wider ranging, so thinking about essentially a wide spectrum of industrial applications where we see the benefit of AI-enabled robotics,” said Scaringe.
Scaringe said the company has gathered $110 million in seed money to use AI to make industrial manufacturing designs better and more efficient. Again, he said the robotics software will need large data sets.
“Capturing the data that we have within our existing facilities to train the robotic platforms on manufacturing and to train on some of these high-dexterity operations,” said Scaringe.
Rivian will be a shareholder and close partner with MIND Robotics but Scaringe is not being specific yet on what areas of manufacturing the firm will target for service.
