Rivian has taken strides in unveiling its latest models, the R2, R3, and R3X. These vehicles certainly raise the bar for the company. However, when placed in the broader context of the electric vehicle sector, these advancements, while commendable, serve to highlight the relentless pace set by industry leader Tesla.
Rivian's Surprise Launch
This is not to rain on Rivian's parade. Rarely does an EV manufacturer not named Tesla rule the coverage of any given day. Rivian did show off some development during the launch of the R2 and the surprise announcement of the R3 and R3X.
The R2, positioned as a smaller, more affordable alternative to its predecessor, brings Rivian's distinctive design into a compact, efficient package. With a starting price of $45,000, over 300 miles of range, and the ability to accelerate from 0-60 MPH in under three seconds, the R2 is poised to garner some attention. The subsequent reveal of the R3 and R3X models shows that there are big plans for the future for a company that plans to build 57,000 cars in 2024.
Innovation on Display
Rivian showed off some new technology using the 4695 cylindrical battery cell and structural battery packs for increased range. The DC fast charging system works with NACS and CCS. There has also been a significant increase in autonomous driving capabilities, a new computing system, five radars, and 11 cameras. The company is delaying facility expansion, instead launching the R2 from its Illinois facility to save capital and expedite production.
That’s the good news, but the R2, with its new look, upgraded tech, and lower price, will not be available until 2026. The other two units will be available in 2027. This timing is crucial. While Rivian's new models are indeed groundbreaking, Tesla's "Redwood" project is set to introduce a vehicle at a $25,000 price point, making it highly accessible to the mass market.
Tesla's Countermove: Redwood, Van
The implications of Tesla's manufacturing efficiency and cost reduction advancements cannot be overstated. As Tesla gears up to launch its next-gen vehicle, it is likely already envisioning subsequent innovations that could further extend its lead in the EV sector. Those ideas, which are likely scribbled on Franz von Holzhausen’s notepad at this point, could very well be in development by 2027. Perhaps a highly configurable van, the obvious next step, could be created simultaneously with the other two Rivians coming out. Given the advancement learned year-over-year, a new Tesla product will likely beat Rivian’s prices.
With a production timeline that anticipates the start of manufacturing in the latter half of 2025, Tesla's next-gen vehicle is poised to hit the market around the same time Rivian's R2 begins delivery. Rivian's efforts, though significant, are part of a broader narrative dominated by Tesla's vision and execution. As the electric vehicle landscape continues to evolve, the ability to innovate at scale and meet product demand and consumer desire for affordability, range, and performance will determine the true leaders of the electric revolution. Rivian has a lot of work to do.
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Tesla recently hit the news for purchasing approximately $2M in LiDAR sensors from Luminar, one of Tesla’s long-term suppliers. You’ve probably seen photos of Tesla’s Semi and various Tesla models, including the Model 3 and Model Y sporting LIDAR equipment on the roof. These cars drive around with manufacturer plates scanning streets and highways.
However, many people confuse Tesla’s purpose in purchasing LiDAR equipment with using it for FSD versus testing. So, let’s look at what LiDAR is, and why Tesla uses it on its Fleet Validation Vehicles.
What is LiDAR?
LiDAR stands for Light Detecting and Ranging – essentially using lasers to measure distances. A laser pulse is sent out, and the time it takes to return is measured – providing extremely accurate distance measurements.
Some companies working on self-driving vehicles, including Waymo and BYD, use LiDAR as part of their self-driving suites, but Tesla is one of the few stand-outs that does not. Even Rimac’s “Verne” Robotaxi – which uses self-driving technology from Mobileye, also uses LiDAR.
While LiDAR can produce extremely accurate and high-quality 3D environments, it comes with its downsides as well. Not only is LiDAR costly and requires large gear strapped to a vehicle, but it also can not be used in bad weather and can have interference issues if there are other strong light sources present.
Why Does Tesla Use LiDAR?
A LiDAR rig mounted on a Tesla Semi for testing FSD.
Not a Tesla App
At Autonomy Day in 2019, Elon Musk mentioned that LiDAR isn’t the solution for self-driving cars – it's just a crutch. Thus, Tesla hasn’t used LiDAR for any production self-driving software.
Instead, Tesla uses it exactly how it's described – they use it to gather ground-truth data. This data is then used to feed Tesla’s Full Self Driving system – which helps validate its vision-only system's accuracy. LiDAR provides very accurate measurements to help ensure that FSD’s perception of space is accurate – and is only used by Tesla to ensure that its AI technology which is the brains of FSD is capable of accurately interpreting depth from just visual data.
While sources other than Bloomberg haven't confirmed this report, Bloomberg has a positive track record of reporting on financial decisions. We’ll be sure to update the article if there is confirmation on X from Elon Musk or another Tesla senior official.
Tesla’s stock has dropped nearly 8.5% over the day, ending back-to-back gains over the last two weeks. It closed yesterday at $ 241 after hitting a peak of $270 earlier in the day before the news broke.
Why the Delay?
The delay – of approximately two months – has been communicated internally, but not publicly announced just yet. Bloomberg goes on to mention that the design team was told to rework certain elements of the Cybercab, necessitating the delay.
If Bloomberg’s report is correct, it sounds like Tesla’s unveil event will be largely focused on showing off the vehicle, instead of demoing how it will work. Of course, it could still be both, but given past events, Tesla has always shown off the vehicle years before it hits production.
Rimac recently showed off their version of robotaxi vehicle named Verne, and surprisingly, it could almost pass for Tesla’s own robotaxi. A lot of design cues in Rimac’s version are elements we have already seen or expect to see in Tesla’s autonomous taxi.
A recent Tesla patent revealed that Tesla is incorporating a sanitation system into their robotaxi that will be responsible for analyzing and cleaning the vehicle’s interior, although the delay itself is likely tied more to a physical feature rather than software.
Another element we know almost nothing about is how Tesla plans to charge these robotic taxis. Will they rely on the existing charge port and adapt a solution like the robotic charging arm (video below) we saw almost eight years ago, or will wireless charging or a dock finally become realized?
While the delay for Tesla’s event appears to be related to the vehicle’s design itself and not further development of FSD, Tesla is wasting no time in getting FSD working for the upcoming vehicle. Model 3 vehicles have already been spotted with camera locations that resemble a robotaxi.
Is the Delay Accurate?
We expect that this delay might actually be true – Elon Musk usually takes to X within hours of such news breaking if it's false to refute it and hasn’t done so yet.
Tesla has delayed several of their events in the past, and a delay of a couple of months seems plausible. We should hear from Musk himself soon on whether this report is accurate.
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