Rivian Faces Sales Decline as EV Tax Credit Expires, R2 Set to Launch

Rivian has reported a significant decline in vehicle sales for 2025, delivering only 42,247 vehicles. This figure marks an 18% decrease from the 51,579 vehicles sold in 2024. The drop in sales coincided with the expiration of the $7,500 electric vehicle tax credit in the United States, which has had a profound impact on consumer purchasing behavior.

The electric vehicle manufacturer experienced a particularly sharp decline in the fourth quarter of 2025. Rivian delivered just 9,745 units in the last three months of the year, down from 13,201 in the previous quarter. Many customers rushed to purchase models such as the R1S and R1T before the tax incentives ended in late September, leading to a notable slowdown in sales thereafter.

Rivian’s sales figures align with the broader trend in the electric vehicle market, where multiple automakers faced challenges as the tax credit concluded. Unlike competitors such as Tesla, Rivian operates exclusively within the U.S. and Canada, making it particularly vulnerable to shifts in local policy. Tesla reported a 9% sales drop for the same year, while Chinese manufacturer BYD has emerged as the global leader in electric vehicle sales.

Despite the sales downturn, RJ Scaringe, CEO of Rivian, expressed optimism regarding the long-term implications of the tax credit’s end. He suggested it might reduce competition and allow Rivian to strengthen its market position. “Narrowly and myopically through the lens of Rivian, it actually creates less competition,” Scaringe stated in November.

Rivian’s Future: The R2 and Strategic Partnerships

Rivian is pinning its hopes on the upcoming launch of the R2, an affordable electric vehicle scheduled to debut in the first half of 2026. The R2 is anticipated to be a more profitable model, aimed at a broader market, with a starting price around $45,000. This is a significant reduction compared to the current R1 models, which typically retail between $80,000 and $100,000 or more.

Scaringe has emphasized the importance of the R2, likening it to Tesla’s successful Model Y. He noted, “If you want to buy an electric vehicle for under $50,000 today, I would say in the United States there are well under five great choices.” The R2 must appeal to consumers beyond just tax incentives, ensuring its success in a competitive landscape.

In addition to the R2, Rivian has secured a partnership with the Volkswagen Group. This collaboration grants Rivian access to Volkswagen’s future electrical architecture and software plans as part of a joint venture valued at $6 billion. This partnership aims to enhance Rivian’s technological capabilities, particularly in autonomous driving.

Rivian is also working on advancing its autonomous driving technology. In December, the company announced plans for a future variant of the R2 that will include lidar systems for self-driving capabilities. Furthermore, Rivian is developing in-house computer chips, positioning itself as a competitor to established tech companies in the autonomous vehicle space.

Until the R2 is available, Rivian will continue to rely on sales from the R1S and R1T models. The company is focused on navigating the challenges posed by shifting market dynamics while preparing for a pivotal moment in its growth trajectory with the R2 launch.

As Rivian looks ahead, it remains to be seen how these strategic moves will influence its market presence and overall sales performance in an evolving electric vehicle landscape.