RJ Scaringe (3:59)

Well, it's great to be on. Thank you for having me.

Joanna Stern (4:01)

You are my second car CEO on the show. That's how I decided to do my takeover. And one of the reasons I did that. Well, two reasons. One, I always listen to Nilai's car CEO interviews and love them. But I always am also driving in the car, listening to them and screaming in the car that he should be asking different questions. The questions I want answered, that is number one. Number two reason is that three years ago I leased my first ev. It was a Mustang Mach E. I've been quite happy with it. But next year that lease goes up and I have a number of things I. I think I want. And so I thought we could talk through some of that. And I thought that would inform a lot of our conversation today about the future of EVs. The future of Rivian.

RJ Scaringe (4:40)

Great. So I get to sell you a car. Maybe by the end of the show.

Joanna Stern (4:43)

I want you to be not the sleaziest car salesman, but yeah, the coolest car salesman. And if you're lucky, I will drive it off the lot.

RJ Scaringe (4:53)

All right, Going for cool car salesman vibe. Got it.

Joanna Stern (4:56)

Yes.

RJ Scaringe (4:57)

Register that.

Joanna Stern (4:58)

So let's start there on what Rivian has in the market and what's coming. When you came out with the R1, and I believe almost now, five years ago, which is kind of crazy, you were very much billed as this electric truck company and now you've got the R1s. You are expanding to the R2, then the R3 after that. Seems like your goal is to be more than just an expensive truck company. How do you think about Rivian today? How should I think about Rivian today?

RJ Scaringe (5:28)

Yeah, I mean the goal is definitely to be much broader than an expensive electric vehicle company. So we, you know, when, when you launch a new company, it's always an important question, what do you launch first? And so we made the decision really even before we made the decision on products, we realized we wanted to build a brand around enabling active lifestyles. And following that we made became really clear we wanted to launch with a flagship set of products. And so we launched the R1 product with. It's a sort of thing, it was like a brother, sister, sibling set of products. There's R1T which is a truck, and there's the R1S which is an SUV. And those two vehicles were intended to launch the brand and really be our handshake with the world and enable us to tell a story on what we stand for, the types of experiences, the trade offs we make in terms of attributes, let's say like on road and off road. Performance, performance and efficiency. And R2 is really just the continuation of that. So whereas R1 has an average transaction price of around $90,000, R2 starts at $45,000. It captures a lot of those same brand elements. So the vehicles are, they can fit your gear, your pets, your kids, your stuff. They can go on road and off road, but it's much smaller. And then of course, as I said, much more affordable. And for us it's the first product that'll take us from a flagship, which is what we started with, to something that is broadly accessible in terms of pricing. So we're super excited about. But I mean the thing about R2 that I think is so amazing is a lot of the trade offs we've had to make to get the cost down a lot. So we've taken around half the cost out of the vehicle. A little bit more don't manifest in a loss of perceived, let's say features or quality. It's the execution and interior is just beautiful. The way the car rides and drives is amazing. It's obviously smaller, but it really feels like a Rivian and it's really enjoyable to drive. And I think package wise for many users, if you don't need a seven row, it's sort of like just the right size. It's a little bit shorter than a model Y, but feels a lot bigger and I love the way, you know all the little details. The front trunk works great. The rear liftgate's beautiful. It's got a drop glass mirror so you can put things in the back without opening the back up. So it's got all the little intricate details we've thought through to make it feel like a magical product experience.

Joanna Stern (7:49)

And when does it come out?

RJ Scaringe (7:51)

We start deliveries in the first half of next year. Which means we have to start building what we call saleable units in the early part of next year. And we're right now in what we call validation phase. So we're building vehicles, we're camouflaging them, driving them on public roads. We begin running all of our manufacturing validation builds. So running vehicles through our plant on production equipment, production process later this year and then early part of next year, we transition from non saleable units. We build a few hundred of those which we consume internally to then units that are saleable to consumers. So yeah, so it'd be early part of next year.

Joanna Stern (8:28)

So by August 2026.

RJ Scaringe (8:30)

August, yeah, for sure. Yeah.

Joanna Stern (8:32)

When my lease is up, the R2 will be on shelves. If that's not what you say in.

RJ Scaringe (8:37)

The car business, we could have an R2 in your driveway when your lease is up. Yes.

Joanna Stern (8:40)

Okay. Okay. Well, you're already on a good start. And we're gonna talk about my experience test driving R1s this summer. And that's one of the reasons I wanted to have you on the show. But I wanna quickly talk about how you're expanding here and some of the backdrop of Rivian. And I think actually it's kind of perfect. Cause I live in a town in New Jersey that should pretty much just be called Rivian Field. Rivian Land. Everyone has the R1, the S. Like, I don't know, when you were designing, were you like, let's make a truck that suburban moms love. And dads, were they pictures of suburban moms and dads on your, your mood board?

RJ Scaringe (9:23)

Well, actually it's funny you say it. So when we're developing the vehicle, even way before we'd shown it to the world. And we did the same on R2, we're doing the same on R3, R4. Like we always create this idea of what is the vehicle? Like, what's the feel of the vehicle want to be, you know, what is the, what's the essence of it? But then we interpret it through the lens of lots of different target customers. And so in the case of R1, it's a really broad set of buyers we wanted a really diverse demographic that, that would, this would appeal to. And one of them, which of course is a big demographic, are people that are using it to support their family, like know with kids or with pets or with gear. And not surprisingly, it fits all those things really well. And so it's really resonated beautifully with customers that, that have kids or have families. And interestingly, this is a fun, fun little fact. We're the best selling premium electric SUV in the country. So if you, the way you draw the boundary diagrams on, on these are always confusing, but the way we draw it around premium SUVs, we have about 35% market share for premium electric SUVs, but in California and the state of Washington, we're the best selling premium suv, electric or non electric. So if you're buying an SUV in the state of California and it's premium, meaning over $70,000, the statistically you're most likely to be buying a Rivian. And the same is true in the state of Washington. So as. As dense as it seems in New Jersey, a place like Seattle or Mill Valley, I mean these are areas where just, it's the same. It's very, very popular in these, in these markets.

Joanna Stern (10:56)

But in that price range in EVs, you really only have one competitor. Right. Is that the Lightning?

RJ Scaringe (11:01)

No, there's Model X is.

Joanna Stern (11:03)

Okay. So actually classified as an SUV there too. Okay.

RJ Scaringe (11:06)

Yeah. So we outsold Model X by quite a bit. We outsell, well, everything. There's Cadillacs in that price range. There's GMC Cybertruck. Yes. So there's, there's a lot of things up in that, in that price category.

Joanna Stern (11:19)

But kind of going to thinking about this town I live in and some of the towns you were talking about here, I mean, it's mostly coastal, I would assume, where you've got an audience and a demographic of people that can afford a $90,000 car. I'm assuming that part of the strategy that you're really now going for with R2 is to expand that, to go beyond that niche. Are you confident in that, given what the backdrop of the ecosystem and competition looks like right now?

RJ Scaringe (11:47)

Yeah, we had a board discussion the other day and I said it, and I'll say it here, I've never been more confident in the business than where we are today. I think one of the big risks in launching a new company, there's lots of things you could control that are fairly deterministic. Like does the vehicle accelerate like this? What's the range of the vehicle? Does it fit this kind of stuff. And then there's a number of things that are far less deterministic. And in some ways I think of it as almost like magic. And the biggest one of those is the brand and how well the brand resonates. And as we just described, you can do all these mood boards and studies to say this is what we hope the brand becomes. But you know, if I were to wind the clock back to 2020 before we launched, I wouldn't have imagined the brand would even have resonated as well as it has every year since we've launched. Consumer Reports does this annual brand appeal study. And it's based not upon what we say, but they survey lots of different customers independently. And Phil, since we've launched, since we launched in 2021, we've been at the number one spot on that chart. So number one level of brand appeal and then by far the highest rate of repurchase. And so my hope is if we can take even a fraction of the market share success that we've had at this premium price point with our flagship product and translate that to the mass market product, the R2, even a fraction of that, we'd be really happy. And so of course we'd be happier if we can take a bigger fraction of that market share success. But to be 35% market share in the segments we're operating, outselling all the other EV alternatives. This segment we're now going into with R2 is very big. This is cross shops with lots of ICE vehicles, lots of hybrids. Of course, you see model Y in.

Joanna Stern (13:33)

This price category and the Chevy Equinox, which I'm seeing all over the place.

RJ Scaringe (13:38)

Chevy Equinox, yes. There's a whole host of products we get to compete against.

Joanna Stern (13:42)

My previous decoder guest was Jim Farley, the CEO of Ford. Okay, know you guys know each other?

RJ Scaringe (13:47)

Yeah.

Joanna Stern (13:48)

And we spent a lot of time talking about the threat of a company that doesn't even sell cars in America, which is byd, and the mindset that that is the company that is really the competitor in the lower cost high tech EV space, even though they don't sell in the us what they're doing is the competition.

RJ Scaringe (14:09)

And he said the Chinese are, you know, the 700 pound gorilla in our industry for EVs. There's no real competition from Tesla or GM or Ford with what we've seen from China.

Joanna Stern (14:22)

That's clearly what he's thinking about. What about you?

RJ Scaringe (14:25)

I think there's two things to call out about China that are important. The first is obviously their cost structure. And I think that draws a lot of attention. We've all. I'm sure Ford has. We have, you know, everyone buys everyone's products and looks at how they're made. There's certainly lots of innovations that are being made, but there's nothing that everyone's not aware of or that they themselves are doing in terms of manufacturing process, vehicle design, vehicle architecture. I think what's happened on the cost is they have just the compounding benefits of very low cost of capital. And so both at the OEM level and at their suppliers, in many cases, the plants are free or close to free. Very low labor cost, very high labor availability. And that just compounds as you go from raw materials all the way up the supply chain to these dramatically lower cost structures than what we have in the Western world. And so I think what will happen there is either, you'll see tariffs go in place or requirements that those vehicles are produced locally, where a lot of those cost advantages go away. And so as much as I think cost is something we should all be aware of, and to say, look at how low cost it is to build vehicles in China, which we can see Western companies can also benefit from as well, you look at the cost structure of Tesla's vehicles built in Shanghai versus Tesla's vehicles built in the United States, it's much, much lower in Shanghai. So I think there's the cost element, but the bigger element is actually how advanced the technology is here. What's happened is, much like Tesla, I'd say, much like Rivian, if you start with a clean sheet, you end up in a very different place than the legacy car manufacturers. In our case, we developed our whole software platform in house. We built all of our electronics in house. That platform's very robust, and in fact, it's what's underpinned. We did a $5.8 billion software licensing deal and associate joint venture with Volkswagen Group, the second largest car company in the world, to take that technology and deploy it across their vehicles globally, with the exception of the Chinese market, but Europe, United States, rest of the world. And I think this is the challenge is now it's not just Tesla and Rivian that have this very unique approach to software electronics. It's a number of, not all, but a number of Chinese companies also have a much more advanced approach to software and electronics. And the legacy OEMs have to very rapidly shift how they approach this tactical domain, which has historically not been a core competency of OEMs. Historically, they're very mechanical companies. And they've relied on tier one suppliers to do a lot of that work. And those tier 1 suppliers often rely on tier 2s. So it's the software and electronic space in automotive tends to be quite a bit behind consumer electronics as a result of this outsourced third party approach that the auto industry's evolved to use over the last few decades.

Joanna Stern (17:29)

We need to take a quick break, but we will be right back.

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Joanna Stern (21:05)

We're back with Rivian CEO RJ Scaring. Before the break, RJ and I were discussing competing with China and what it means that the lowest cost EVs are coming from competitors like BYD, which because of tariffs, can't sell their cars in the U.S. now, I wanted to ask RJ about Trump's new tariffs and how he's handling this economic environment. Well, you walked right into some of my questions about tariffs and also you really touched on a large part of what my conversation with Jim Farley was about, which was about how he pivots the company to do some of the stuff that you're doing. But let's go back to tariffs because it's clear that is affecting your business, it is affecting this entire automotive industry. If you look at what you're trying to do with R2, which is bring down the cost, make this an affordable vehicle, or at least your efforts to make it an affordable vehicle, and you're up against tariffs. Can you do this? Is this just kind of like the worst case scenario timing for you?

RJ Scaringe (22:05)

With R2, we've actually had the benefit of making a lot of sourcing decisions, recognizing some of the I characterize them as global geopolitical shifts. And one of the biggest global changes in mindset that's not just unique to the United States, but we're seeing across the Western world is an increasingly domestic centric approach to manufacturing. Meaning in the case of the United States, and I'd say broadly in the case of Europe, there's a desire to retain more manufacturing content local to the markets in which the vehicles are sold. And so in our case, because we're producing all of our products in the United States, we knew that going into the sourcing of our tunes. So we have built a US centric supply chain around that. Of course, there are some things that we don't make in the United States. Certain metals, especially heavier rare earth metals, certain materials just globally don't really aren't born out of the United States. Things like nickels are a very good example. 92% of the world's nickel supply comes out of Indonesia. And so in certain aspects of the vehicle we've had to build cross border trade relationships. And some of the changes we're seeing in trade policy do add cost. But we've had the benefit of being able to be quite planful around that. Whereas on R1, which was already in production with a fully sourced and fully operating supply chain, that the, you know, the changes to trade policy being so abrupt, we didn't have the time to respond to those as thoughtfully as we've been able to with R2.

Joanna Stern (23:39)

I think it's well known Rivian is manufacturing in the US and it feels like you're making these cars here, you're adding jobs here, but yet you're still facing from this administration the tariffs, the upcoming cuts to EV tax credits. Do you feel like this administration's just working against you? You're just like pushing against the tide all the time.

RJ Scaringe (24:00)

An important part of my job, and I'd say increasingly so, is looking at all the unknowns in the system and we think of this just not for me, the whole leadership team looking at all the changes in the system and trying to understand what are the things that are going to be persistent, like what are the changes that are going to exist two years from now, three years from now, five years from now, and what are the things that are somewhat in the noise. And when we look at it through that lens, there's a number of really clear things. So one thing that's very clear, regardless of whether you're looking at it from a Republican point of view or a Democratic point of view, building independence from China is going to be a theme that's important in the United States. And so that was really important for us as we sourced R2. We built very little dependency or as little dependency as possible on Chinese supply chain that carries with it assumptions around cost and different cost structures. But that was one key takeaway. And so in that way we've aligned the business to the intent of, I'd say Both all political parties in the United States. The other is that there's a big push for U.S. capability in both technology and U.S. capability in manufacturing. And so putting aside some of the, I'd say noise and short term changes that have impacts, real impacts on us around electric vehicles and some of the policy for electric vehicles, we find ourselves very aligned in terms of building deep technology expertise in the United States. That technology expertise that's so strong that in fact we're selling that to other companies outside the United States. So this is our deal with Volkswagen is one of the largest software licensing deals in the history of the auto industry. So between a US Company and a European company. So I think there's alignment there. But a big part of what we try to find is a way to depoliticize electric vehicles which have become political. They shouldn't be. We're investing in building and technology and jobs in the United States. We employ close to 16,000 people here in the U.S. so we're a large company. We have one of the strongest technology teams I think in the auto industry. And so we spend a lot of time with, with the administration on that. And there's a lot of support and enthusiasm for what we're creating and building in that regard.

Joanna Stern (26:20)

You should just bring a R2 to the white House. I think you should get President Trump in an R2 and he can say everything's computer.

RJ Scaringe (26:28)

We'll have to ask him. We'll see.

Joanna Stern (26:30)

Yeah. Do you go to Mar a lago in your R2?

RJ Scaringe (26:34)

It would work beautifully there. The rear window drops down. You can put a surfboard in the back. It's a good idea. It's the ultimate vehicle for being down there.

Joanna Stern (26:44)

Well, see, this is. You're not only going to sell me an R2, you're going to sell an R2 to the President of the United States. What a great show for you.

RJ Scaringe (26:51)

There we go. Well, we. I say this all the time. Michael Jordan has a quote I just love, which is that both Republicans and Democrats buy Nikes and the same is true for Rivian. And it's, I think it's a great result that we try very hard to not make what we're doing political. We have a lot of Republicans buy our vehicles and love them. We have a lot of Democrats who buy our vehicles, love them. We have people that are in the middle. We have independents. So we try to be as broad as possible in terms of creating a welcome mat for us as a company and really appeal to the core values of enabling active lifestyles and that's not a political orientation. It spans across all political points of view.

Joanna Stern (27:34)

Although I'll ask you, did it help you that there was the Elon Musk Donald Trump alliance and that I now see many people with bumper stickers on Tesla saying, I bought this before Elon went crazy? I'm assuming, you know, that maybe helped you.

RJ Scaringe (27:49)

It's been interesting to watch. There's a long list of things that I could put that, say, a year ago I would have never expected to see happen. And so this time last year, I wouldn't have predicted some of what happened there to have occurred. But I think at the end of the day, look, I think the important thing is that in Tesla's case, they do have a great set of products. The Model Y, Model 3 are great products. I've owned them. I've been a customer a few times and I think it's good that customers have that as a choice.

Joanna Stern (28:19)

I want to get to some more product questions and things about my R1s driving, but I want to stick just for another second on the state of the economy, the state of your business, and the fact that you sort of have the uphill battle now of making cars that are profitable for you. You are still, as far as I can tell from earnings and reports, still losing money on each of the vehicles you sell. Is that going to improve in the coming months? And with the R2, it better improve.

RJ Scaringe (28:53)

And I say that with a smile. The so if we look at our trajectory when we launched, we had a whole host of challenges that were not predicted. We launched right into the pandemic. It's probably hard to imagine a more challenging environment to launch an industrial business into. So it's hard to build a plant and launch a plant with remote work and work from home. We then had a huge supply chain crisis and given us as a new manufacturer, we had real challenge that persisted, you know, well into 2023, around just our ability to get enough parts. And so we were starved for parts, which, you know, manufacturing really benefits from predictability and being steady. And our on off nature just created a huge amount of unexpected fixed cost overhead. And then as we came into 2024, things started to really come together. We launched some updates to the vehicle we call our Gen 2 version of R1. And so Q4, 2024, we were positive gross margin. Q1 of 2025, we had over $200 million of positive gross margin, which was awesome. And then this past quarter was a tough quarter for us. Q2 of 2025 just we had a big drop off in volume, Largely driven by some of the challenges around getting enough heavy rare earth metals to make our motors. So in our case, all of our vehicles are, of course, electric. We produce all of our vehicles in the United States. China, as part of the trade negotiations have been happening, Put in place an export control where they didn't allow export of magnets into the United States. And so we just couldn't make motors as motors need the magnets. And so we had this. We went from 14,000 units produced in Q1 to around 6,000 in Q2. And that was a singular sort of phase shift, if you will, that we felt we saw in the numbers. But we built solutions around that that export control has been lifted. And so we're quite bullish on the rest of this year is going to be. We'll produce and sell more vehicles in the second half of the year than we did in the first half. And then, as you said, the launch of Arc2 really ignites the business. It allows us to get to a level of volume that helps cover our operating fixed costs. That's like our plant fixed cost. And then the overall opex of the business. So all the R and D&SGA, the sales, administrative functions of the business to support selling and delivering and servicing all these vehicles. And so scale is a really important part of automotive business, automotive production. It becomes even more important if you're extremely vertically integrated, which we are. And so once you get to that scale, that vertical integration creates a structurally advantaged cost structure. But you need a certain level of scale which R2 brings for us.

Joanna Stern (31:36)

Okay. And, you know, maybe. Maybe you'll. It won't be in this quarter, but maybe you'll have my R2 lease. But.

RJ Scaringe (31:42)

And that'll help.

Joanna Stern (31:43)

That'll help. But you're gonna have to convince someone of this decision that isn't me. And so I'm gonna play a message from him soon. But I test drove the R1s this summer. I drove it many miles, actually. It was almost like, I think, 500 miles in your car. So thank you for that, But I had a pretty tough reviewer in the car for this whole time. And we have a quick question from him. I'm gonna play it why they became a flat tire. Rivian man. And what else do you like about the car that would have the car written and opened? That's cool. So he. Did you hear the beginning of the question?

RJ Scaringe (32:18)

I couldn't quite hear the beginning.

Joanna Stern (32:19)

It's why did we get a flat tire? Rivian man.

RJ Scaringe (32:24)

I Heard the Rivian man, which. I really like that.

Joanna Stern (32:26)

Yeah, yeah, that's your name. I told him I was going to talk to Rivian man and so that's what he said. He wanted to know why did we get a flat tire? Rivian?

RJ Scaringe (32:35)

I actually don't know. Did you run over a nail or something?

Joanna Stern (32:38)

I don't know either.

Sponsor Announcer (32:39)

I don't know.

Joanna Stern (32:40)

It just like anytime now he sees a Rivian, he's like, that's a Rivian, it has a flat tire. And you know, I had to explain to him that actually all cars can get flat tires.

RJ Scaringe (32:49)

Yeah.

Joanna Stern (32:50)

And then the second part of his question was it wasn't really a question. He just wanted you to know that he loves the key card. He says that's really cool. And I wanted to actually tell you I don't like the key card.

RJ Scaringe (33:02)

The key card actually it's not supposed to be used other than like sort of an emergency. You put it in your wallet or you put it, you know, put it somewhere and hold onto it. But you know, the idea is your phone's really key. So I don't know if the team, when you loaned it set you up with phone as key, but that's the idea.

Joanna Stern (33:18)

It's true. I did have it set up on my, on my phone for a little bit after we had the key card.

RJ Scaringe (33:24)

Oh, okay.

Joanna Stern (33:24)

Any other things you have to say to my 4 year old son in terms of why he should, he should tell me to get this car.

RJ Scaringe (33:29)

Ah, why? So I have a six to seven and a nine year old so I have a perspective of what the kids really enjoy with it. So I'd say in the case of R2 because my boys have spent a lot of time now in R2, a lot of the fun little features we have on R1, like the flashlight and the door are still there. There's tons of storage. The front trunk's great in R2, but we put in a few more features so the rear glass drops completely in R2. It makes for like a really nice open air experience where you can drive with the back open and it's not too noisy. You can fit stuff into it. If you have pets, they really like it. But the car has all the same performance, like trade offs. It's still very capable on road and off road. It's a great adventure mobile if it's all your gear. So I think he'd really enjoy the R2, but it's also easier to get into for kids because it sits a little lower than the R1. So my kids prefer the R2 over the R1.

Joanna Stern (34:23)

Okay. All right. I've got a lot to tell my 4 year old. He's going to be making this decision. He makes all the important buying decisions in the house. So I also, I text Nilai a lot about cars, often after I've listened to decoder or just when I'm test driving cars or thinking about it. And so I want to read you the text I sent him earlier this summer. I said, drove Rivian loaner upstate, no problem charging, but maps are fucking terrible. The good news is you fixed one of these problems, the maps, right?

RJ Scaringe (34:53)

Yep. We had a great partnership with Google. So the Maps are now in partnership with Google and it was an area that there was a lot of requests for. Different solutions are mapping. So the beauty of our architecture is we can update all sorts of things, including map applications. So we have a whole new mapping environment which is beautiful. It's a really nice, I mean it was just great working with the Google team to develop this. It's really special. It's a wonderful application.

Joanna Stern (35:22)

And did you work with the Google team on sort of the underlying infotainment system that's based on Android? Right.

RJ Scaringe (35:28)

It's a good question. We didn't work with Google on the platform. We built it to really work seamlessly with the Android ecosystem so that some of the apps that we integrate can be more seamlessly pulled in. But we did that entirely without Google and in the case of the maps, we did work very closely with Google.

Joanna Stern (35:44)

Makes sense. Well, I did get the R1s back to test post the Maps update and it is significantly improved. So that's good timing for you to be on the show.

RJ Scaringe (35:54)

I love that. So we checked one box there.

Joanna Stern (35:55)

Checked one box. We need to take another break. We'll be right back.

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Joanna Stern (39:31)

We'Re back with Rivian CEO RJ Scaringe. Before the break, we were discussing my time with the R1s. This summer and the road to Rivian's R2 next year. But now it was time to hit RJ with the most important question of all. But, you know, one of the main reasons I got a Maki actually had to do with CarPlay. Do you still hate CarPlay?

RJ Scaringe (39:56)

It's a funny way to ask it. No, we definitely don't hate CarPlay. We've taken the decision, which I'm very confident in the fullness of time customers will appreciate, which is we wanted to have a seamless digital experience and not have the need to jump between, let's say, CarPlay, which feels like. It feels obviously like CarPlay. So it feels the same in every car, that environment, and then what we create as a Rivian environment and rather think of it more a la carte, create all the same applications. So you have a YouTube you can go to, you can go to Spotify, you can go to Google Maps, you can go to Apple Music, you can go to everything, you can have all those integrations. But for us to hold the glue for putting that all together, this becomes even more important as we start to integrate AI into the vehicle. And so over the next 18 months, we're going to see a lot of new features that by necessity are performing tasks or doing decisioning to connect different applications. And so, like, knowledge of what's the vehicle state, knowledge of, you know, is it in drive, is it parked, what's the conditions outside the vehicle, what's your driving history, what your preferences are. Knowledge of all of that at an ecosystem level then allows us to present a richer, better experience for you as a driver or occupant of the vehicle. And so I think it'd be really hard to do that if we had to put all that through an application which expands to take over the screen and provides you essentially with a set of bubbles that feel very much like a carplay experience. And so piece by piece, everything that someone may have missed from their CarPlay experience, whether it was a mapping, soon we're going to have voice to text, is going to be there and it'll be beautiful. We're really convicted on this. For some folks, that means they're not going to buy a Rivian. We accept that it's a decision. I say this all the time, like, part of building a product as complex as this is recognizing and being okay with the fact that we have to make a ton of decisions, like the products, like a vehicle is many millions of decisions together. And some of those decisions, not everyone's going to agree with and that's okay. And our job is to have convictions around the decisions we're making and have like intention and thoughtfulness and why we made those decisions. But knowing that our goal is to make as many people as happy as possible. But know that you can't make everyone happy because not everyone's going to want exactly the same thing.

Joanna Stern (42:28)

So what I'm hearing is you're definitely doing CarPlay Ultra.

RJ Scaringe (42:33)

Yeah, that's what the takeaway is definitely.

Joanna Stern (42:35)

Doing is what you just said. No, I hear you.

RJ Scaringe (42:38)

I mean to be clear, we have a great relationship with Apple. They're a close partner. We have a bunch of integrations that are coming soon. Apple Music was the first demonstration of that. But there's a lot more coming.

Joanna Stern (42:48)

More around messaging.

RJ Scaringe (42:49)

Yeah. So think messaging, think vehicle access. So think like you know, getting into the vehicle with, you know, watch and Ultra Wideband.

Joanna Stern (42:56)

Great.

RJ Scaringe (42:56)

And there's a whole host of things coming. But you don't need to use CarPlay to do that. You can do it in other ways.

Joanna Stern (43:02)

I agree. And I will say my three years ago, four years ago, CarPlay was number one on the list of things I wanted in a new car. And that has quickly fallen down the list. But I will tell you what's gonna be at near the top of the list for this next decision, which is AI and autonomy and self driving kind of group that all together, which is all very different obviously. And your teams that listen to this will cringe. Give me a sense of how you're thinking about full self driving or some version of autonomy that goes beyond what you currently have in the car. How do you get to the point where I am actually just sitting in my R2 if I get one and I'm able to go from my house in New Jersey to this studio in New York, maybe touching the wheel a couple of times, maybe I touch it two times. How do you get there?

RJ Scaringe (43:50)

Boy, we could spend the rest of the time on this. This is a big topic. But first it's important to recognize there's been a big shift. So the way autonomous systems were developed up until around you could say 20, 21, 2022, maybe even is you had a perception platform or stack of perception which may be cameras and radars, maybe in some cases cameras, radars and lidars that would see the world or perceive the world would identify all the objects, it would classify those objects, it would assign vectors to those objects so you know how they're moving in the world. And then all those objects would be handed to a planner and the planner would be a rules based environment that's essentially a programmed version of interpreting how the world works and then making a whole series of decisions based upon this defined set of rules. And that environment has its obvious limitations. It's very sensitive to changes in the sensor set, it's very sensitive to the location of the application. And so it sort of reached an asymptote of capability. And while that was being developed, a whole new approach to thinking about how to develop self driving systems emerged which was to really to use AI, which interestingly AI as we know it today was not really part of the first gen of self driving systems. It was a very rules based environment. And so what's now happening and what's happening in our Gen 2 vehicles, which is why there's a significant difference between our Gen 1 and our Gen 2 vehicles, is our Gen 2 vehicles, which we launched in the middle of 2024, is we brought all of our perception stack in house. So all the sensors we designed ourselves, there's no third party sensors there. We then built a much more powerful compute platform, so an inference platform in the vehicle. And we're taking all this data and we trigger it based upon a whole variety of things which we can talk about in a moment, but like interesting events. And we use that to feed the training of a large parameter model. Think of it like a foundation model for driving. So a large, what's ultimately a multi billion parameter model. And that model is a neural net of how to drive a vehicle. And the beauty of this is as you improve sensors or as you change sensors or as you change vehicle applications, this neural net of understanding of how to drive a vehicle doesn't go away. So a simple analogy is a wear glasses. If I had learned to drive without glasses and you suddenly handed me my glasses, I would not forget everything I learned. I would just drive better with more accuracy because I have better perception. And so the same is true in this approach now, which is building a large model you've maybe heard or people have heard it, called an end to end approach, where you take this approach of having data come in, you use that to train the model and then that model determines how the vehicle's operating. And so why this is so exciting is the rate of improvement of these systems is going to be much higher. That's the platform we've now have in our vehicles. And we're going to begin to start to see the feature set expand. And so today as you said, we have a call it a Highway Assist. It's a highway Feature where you can be on the highway, you take your hands off the wheel, your eyes stay mostly on the road, but otherwise the vehicle's driving itself. The next extension of that is hands off the wheel, eyes on the road everywhere. So on any type of road, the next extension of that is hands off the wheel, eyes on the road with turn by turn so the vehicle can navigate from an address to another address. And that's coming next year as well. And then the next step is hands off wheel, eyes off road in certain circumstances. Highway is a really good example where you're on the highway, your hands are off the road or off the wheel, you want your eyes off the road and you can be on your phone reading a book. That set of features for us is going to be coming in 2027. And that I think is the really big unlock as you start to get your time back. So it's not just reducing the cognitive load on you to have to operate the vehicle and be fully aware, but it also gives you the ability to do other things. And so that's what I just described is all happening over the next 18 to 24 months. And I think like the rate of progress here is going to be so high that if we look at the last 10 years for autonomy and compared to the next 10 years, it's going to be on a completely different trajectory such that, you know, by early2030s it's going to be sort of inconceivable to want to buy a new car and not have it perform at a very high level from a self driving point of view.

Joanna Stern (48:37)

Tell me real quick though, what are the sensors? There's this big debate I feel happening right now, or maybe it's not really debate and there's maybe one side on the debate and no one's really debating it, that there is the LiDAR versus cameras and Tesla's going all in on cameras saying we don't need lidar. What about Rivian? Does Rivian add lidar?

RJ Scaringe (48:57)

The view of sort of. The entirety of the science community believes that having multiple sensors is helpful because you build a more accurate view of the world. And the way that we build these neural nets is you want a broad understanding of the world and you want the highest accuracy and you're going to have lots. If you have more than one camera, you're going to have multiple cameras that have different signals, which have different signal to noise ratios that need to be managed. But ultimately the way that that information is fused very early, if you have multiple cameras coupled with radar Coupled with potentially lidar, as you said, it gives you a more fulsome and accurate picture. It also allows you to train your model better. So it's analogous to if I had to learn the world with one eye, I would learn a less accurate version of the world than if I learned the word with two eyes. And if you look at like the evolutionary tracks of many species of animals, most animals have multiple modalities of sensing. And the ones that have to operate in maybe the most extreme environments, let's say extreme darkness, generally combine some optical perception with some wavelength based perception, often like you know, sound waves or sonar. Bats are an example of this. Our view is that like it's, it's definitely beneficial and it's, our approach to sensors has been we need to rapidly build our foundation model as fast as possible. Tesla has a lot of vehicles and has made great progress and an amazing product. So we have more megapixels of cameras with 55 megapixels of cameras in R1 that'll jump to 65 megapixels in R2. We have a really robust set of corner radars and a really beautiful 3D imaging radar in the front. And that's rapidly building a robust foundation model that we're going to start to see these features I just described start to deploy with.

Joanna Stern (50:50)

So not ruling out lidar is what I'm hearing.

RJ Scaringe (50:52)

No, I wouldn't rule out lidar. And there's another thing I'd just say which is important to note. I think a lot of the debate around lidar was born out of a AV1,0 where you actually had a rules based environment where this idea of a early fusion or building of a neural net wasn't there. In a rules based environment it was more complex to do some of these fusion activities because the fusion typically happened a little later. Now what's happened is it just is no longer like we no longer run the models like that. And so the models benefit from maximum amount of information on the front of the model. And the cost of lidars is it used to be tens of thousands of dollars. It's now, you know, low couple of hundred bucks. And so it's a really great sensor that can do things that cameras can't.

Joanna Stern (51:39)

My last question is it comes back to buying or leasing one of your cars next year, which is that. And this is a worry I have that Rivian was recently ranked last by Consumer Reports in a survey on vehicle reliability. What are you planning to do about that?

RJ Scaringe (51:57)

That's something we're absolutely focused on. The way, of course, this looks at some of our early builds, these are our vehicle liabilities now getting much, much better. But even with that, even with the fact that there was more service requests on our early builds than, let's say, other vehicles, we had the number one level of customer satisfaction. So I always say to our team, like, when we look at that data, imagine if we, if our reliability gets to best in class coupled with all the product attributes. And so that's our goal. And R2, you know, R1 has continually improved since we launched. And then R2 is a further step change from that with all the learnings that we've made around our production process, production quality, reliability. And you know, it is tough for us. When we first launched in our first year, we came out number one of customer satisfaction, but it was our first time building vehicles at scale. So not surprisingly, we had more challenges with just ramping quality systems to begin with. To begin with.

Joanna Stern (52:57)

Well, the good news for you is I experienced that customer service when I had that flat tire.

RJ Scaringe (53:01)

Yes.

Joanna Stern (53:02)

So I know about that and so does my 4 year old. So it's looking good.

RJ Scaringe (53:08)

I love it.

Joanna Stern (53:09)

RJ, thank you so much for. I mean, I have a lot of other questions, but I'm being told I need to wrap up. They're giving me the. The circle.

RJ Scaringe (53:16)

You're getting the hook.

Joanna Stern (53:17)

Thank you for the time. I really appreciate it.

RJ Scaringe (53:19)

All right, wonderful. Thank you.

Joanna Stern (53:23)

I would like to thank RJ Scaringe for taking the time to speak with me and put up with my son's very fun questions. And thank you all for tuning in. I really enjoyed my time as Nilai here on Decoder, I hope you have too. If you'd like to let us know what you thought of the show or what else you'd like to see us cover, drop us a line. Or if you have any thoughts on what I should do about my car lease, I'm all ears. You can email the team at Decoder at the Verge. They really do read every email or hit me up directly. I'm Joanna Stern on all platforms. And don't forget about my book. It's coming out in 2026. It's called I Am Not a Robot. It's all about the year I let AI take over my life. You can subscribe to my newsletter all about it@joannastern.com Decoder also has a TikTok and an Instagram and a YouTube channel. Check those out at DecoderPod. They're a lot of fun. If you like Decoder, please share it with your friends and subscribe wherever you get your podcasts. Decoder is a production of the Verge and it is part of the Vox Media Podcast Network. The show is produced by Kate Cox and Nick Stadt. It's edited by Ursa Wright. The decoder music is by Breakmaster Cylinder. See you soon. Or at least the next time Nilay has a baby. Rock and roll. The Pumpkin Spice Latte is back at Starbucks. Crafted with our signature espresso and real pumpkin sauce, then topped with whipped cream, cinnamon and nutmeg. The psl get it while it's hot or iced. Only at Starbucks.