Rivian Faces Sales Decline as EV Tax Credits Expire

Rivian’s vehicle deliveries fell sharply in 2025, confirming expectations as the expiration of electric vehicle tax credits in the United States marred sales. The startup automaker reported delivering 42,247 vehicles this year, an 18% decrease from the 51,579 units sold in 2024. The most significant drop occurred in the fourth quarter, where Rivian sold just 9,745 units, down from 13,201 in the previous quarter.

The decline is attributed to the end of the federal $7,500 EV tax credit, which incentivized many buyers to purchase Rivian’s R1S and R1T models before the deadline in late September. Unlike many competitors, Rivian currently operates solely in the U.S. and Canada, making it particularly vulnerable to changes in local tax policies. The company had anticipated a decrease in sales due to this shift, as did other manufacturers, including Tesla, which experienced a 9% drop in sales for the same year.

Future Prospects with the R2 Model

Looking ahead, Rivian aims to rebound with the introduction of the more affordable R2 model, expected to launch in 2026. This downsized SUV will be built on a new platform, allowing for a lower starting price estimated at around $45,000. In contrast, the R1 models typically retail for $80,000 to $100,000 or more. Rivian’s CEO RJ Scaringe emphasized the need for the R2 to attract buyers beyond tax incentives, suggesting that it should be a compelling option for consumers seeking electric vehicles under $50,000.

Scaringe expressed optimism about the potential long-term benefits of the end of the tax credits, suggesting it could reduce competition in the EV market. He stated, “Narrowly and myopically through the lens of Rivian, it actually creates less competition,” during an interview in November.

Partnerships and Technological Advancements

In addition to the R2’s anticipated launch, Rivian is pursuing strategic partnerships to bolster its technological capabilities. The company has entered a $6 billion joint venture with Volkswagen, gaining access to the automotive giant’s future electrical architecture and software plans. This collaboration could enhance Rivian’s position in the competitive EV landscape.

Moreover, Rivian is enhancing its autonomous driving technology. The company announced that a future variant of the R2 will incorporate lidar technology for self-driving capabilities. Additionally, Rivian is developing its own computer chips, positioning itself as a competitor to established technology firms like Nvidia.

Deliveries of the R2 are expected to commence in the first half of 2026. Until then, Rivian’s R1S and R1T models will continue to serve as the company’s primary offerings. As Rivian navigates these challenges, the automotive industry will be watching closely to see if its strategies can lead to a successful recovery in the evolving electric vehicle market.