Updated Wed, Feb 4 2026 1:33 PM EST All-electric vehicle maker Rivian is dealing with a lot: the end of federal support for EVs, a surge in hybrid vehicle sales and a rate of cash burn that still alarms investors, among other things. The company also has relatively low production and delivery numbers, but Rivian CEO RJ Scaringe told CNBC in a December interview that's not the full story. "The R1 is the best-selling premium electric SUV in the United States," he said, adding that it has been a top-selling premium SUV of any kind in the state of California. But the R1S carries a nearly $80,000 starting price. Rivian's hope is that the upcoming, less expensive R2 model can repeat that same success in the far larger midsize, mid-price SUV EV market. The R2 looks like a smaller R1S. Someone sitting inside will notice Rivian's familiar style and design language throughout the interior. It has Rivian's recognizable headlights. And it's much the same shape, with a long, flat roof that lets a 6-foot-1-inch person sit in the rear seat without slouching.  One of the biggest differences is that it has five seats, two fewer than the larger R1S. "It's a smaller vehicle," Scaringe said. "But I think this is the best vehicle we've developed to date. We're incredibly bullish on this and excited for it. Of course it's cheaper, but it doesn't mean it's not an aspirational product, something that you're really going to enjoy and love to be in." Test ride Scaringe took CNBC on a test drive of the R2 near the company's office in Palo Alto, California. It feels low to the ground and agile. "Watch this," Scaringe said as we were driving on the freeway. He kicked the accelerator and the R2 shot forward. EVs are known for fast acceleration, but this might stand out for its class. "It's quicker than it needs to be," he said. We didn't drive off road, but Scaringe said the R2 is trail-worthy, though customers shouldn't expect the more than 1,000-horsepower, go-anywhere capability of the $120,000 R1 Quad. "It's a Rivian, so it still has to be adventure ready," Scaringe said. "It can go out and be on a trail. It's just not going to be doing extreme rock crawling in the way that an R1 can do." Rivian's approach to design and manufacturing has enabled the company to pack a lot into a lower-cost package. Traditional cars have more than 60 computing units in them. By designing the computing architecture differently, the company reduced that down to 17 in its first-generation R1 vehicles and then to seven in the second generation. That's the same number the R2 has, but the company was able to cut the length of the wiring in the vehicle by 2 miles from the previous generation. These kinds of design choices lower the cost of materials. "It's a dramatic reduction in the cost structure to build it," Scaringe said. "So it's key for both enabling the ramp-up in volume because it's so much more accessible in terms of pricing, but it's also much lower cost to build." There are also some unique features — rear-seat side windows drop down all the way into the door panel--highly unusual for the back of a vehicle — due to the location of the rear wheel. The company spent a lot of time getting the placement of the rear wheels right to allow it, Scaringe said. Lowering costs doesn't mean Rivian skimped everywhere. Customers had complained that there was no glove compartment on R1 vehicles, so the R2 has two of them. They both have a velvet-like lining that costs $11 per car. "We wanted to make it a very nice environment," Scaringe said. "So we spent the money to line them up. But this is a really good example. That's a trade-off we made. The top-line number, the starting price of $45,000, has to be achieved. And we have to do it profitably." Wall Street's view