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Thank you for having me. You're 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 new lies, car CEO interviews and love them. But I always, I'm 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 Machi. I've been quite happy with it. But next year that lease goes up and I have a number of things 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 EV.
Great. So I get to sell you a car, maybe by the end of the show. 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.
All right, going for a cool car salesman vibe. Got it. Yes. Right.
Just do that. So let's let's start there on what Rivian has in the market and what's coming. When you came out with the R1, I believe it was now five years ago, just 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 and 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? Yeah, I mean, the goal is definitely to be much broader than an expensive electric vehicle company.
So we, when you launch a new company, so it was an important question. We launched first. And so we made the decision really, even before we made the decision products, we realized we wanted to build a brand around enabling active lifestyles. And following up, we made the, we really wanted to launch with the flagships, our products.
And so we launched the R1 product with its sort of thing, it was like a brother sister, siblings, our 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 us 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 it.
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 in tears, 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-road, 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 all the little details, the front trunk works great, the rear lift gates beautiful. It's got a drop glass in there 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.
And when does it come out? We start deliveries in the first half of next year, which means we have to start building what we call sale-able units in the early part next year. And we're right now in what we call a validation phase. So we're building vehicles, we're camouflaging them, driving them on public roads.
We begin running all of our manufacturing valuation builds, so running vehicles through our plant on production equipment and production process later this year. And then early part of next year, we transition from non-sale-able units, to a few hundred of those, which we consume internally to then units that are saleable to consumers. So yes, it would be early part next year. So by August 20, 20, 20, say it.
August, yeah, for sure. Yeah. When my lease is up, the R2 will be on on shelves. If that's not what you say in the car.
You can have an R2 in your driveway when your lease is up, yes. OK, OK. Well, you're already on a good start. And we're going to 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 want to quickly talk about how you're expanding here and some of the backdrop of Rivian. And I think actually it's kind of perfect because I live in a town in New Jersey that should pretty much just be called Rivian Field, Rivian Land. Everyone has the R1 at the desk.
Like, I don't know, when you were designing where you like, let's make a truck that suburban moms love and dads. Were they pictures of suburban moms and dads on your your move work? Well, actually, it's funny to say that. So when we're developing, even way before we chunks the world and we do the same on R2, we're doing the same on R3, R4, but we always create this idea of what is the vehicle, what's the field of the vehicle and what is 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 would just appeal to. And one of them, which of course is a big demographic, are people that are using it to support their family, like 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 have kids or have families. And interestingly, this is a fun little fact. We're the best selling premium electric SUV in the country.
So the way you draw the boundary diagrams on these are always confusing. But the way we draw it around premium electric vehicles, 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 we're buying an SUV in the state of California.
And it's premium meaning over $70,000. But statistically, you're most likely to be buying a Rivian in the same as true in the state of Washington. So as dense as it seems in New Jersey, a place like Seattle or no valley, I mean, these are areas where it's the same. It's very popular in these markets.
But in that price range in EVs, you really only have one competitor, right? Is that the lightning? No, there's Model X is... Okay.
So Model X actually classified as an SUV there too. Okay. Yeah. So we also Model X quite a bit.
We also have everything. There's Cadillac's in that price range. There's GMC, I'm sorry, truck. Yes, there's a lot of things up in that price category.
But kind of going to thinking about this town I live in and some of the towns we're talking about here, I mean, it's mostly coastal, I would assume, where you've got audience and demographic 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? Yeah, we have a board discussion there today.
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 is launching a new company. There's lots of things you can control that are fully 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 it's almost like magic. And the biggest one of those is the brand and how well the brand resonates.
As we just described, you can do all these mood boards and studies to say, this is what we hope the brand becomes. But if I had a wide 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 on what we say, but they survey lots of different customers independently. And for since we've launched since we've launched in 2021, we've been at the number one spot on the 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 you know, to be 35% market share in the segments we're operating outselling all the other EV alternatives this segment, we're not going into it with our two is very big. So this is crushed up with lots of ice vehicles, lots of hybrids, of course, you see Model Y in this price category.
And the Chevy Equinox, which I'm seeing all over the place. Chevy Equinox, yes, there's a whole host of products we get to compete against. My previous decoder guest was Jim Farley, the CEO of Ford. Okay.
No, you guys know each other. Yeah. 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.
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. That's clearly what he's thinking about. What about you?
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 of 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 costs, very highly available.
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 personally 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, you look at how low cost is to build vehicles in China, which we can see Western companies can also benefit from as well. Now 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. And 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 carbon manufacturers. And so in our case, we developed our whole software platform in house, we built all electronics in house that platforms very robust.
In fact, it's what's underpinned. We did a $5.8 billion software licensing deal and associated with the second largest car company in the world to take that technology and deploy 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 challenges. 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 electronics. And the legacy OEMs have to very rapidly shift how they approach this technical domain, which is historically not been a core competency of, oh, yeah, historically, very mechanical companies, and they've relied on tier one suppliers to do a lot of that work at us. tier one suppliers often rely on tier two. So it's the software and electronics 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 has evolved to use over the last few decades.
We need to take a quick break, but we will be right back. Support for the show comes from Odo running a business is hard enough. So why make it harder with a dozen different apps that don't talk to each other introducing Odo. It's the only business software you'll ever need.
It's an all in one fully integrated platform that makes your work easier. CRM accounting inventory, commerce and more. And the best part, Odo replaces multiple expensive platforms for a fraction of the cost. That's why over thousands of businesses have made the switch.
So why not you try Odo for free at Odo.com. That's O-D-O-O dot com. Support for the show comes from Odo running a business is hard enough. So why make it harder with a dozen different apps that don't talk to each other introducing Odo.
It's the only business software you'll ever need. It's an all in one fully integrated platform that makes your work easier. CRM accounting inventory, commerce and more. And the best part, Odo replaces multiple expensive platforms for a fraction of the cost.
That's why over thousands of businesses have made the switch. So why not you try Odo for free at Odo.com. That's O-D-O-O dot com. We're back with Rivian CEO RJ Scringe.
Before the break, RJ and I were discussing competing with China. What it means is that the lowest cost EVs are coming from competitors like BYD, which because of tariffs can't sell their cars in the US. 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 the worst case scenario timing for you? 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 United States.
And in its state, 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 R2. So we have built a US-centric supply chain around that. Of course, there's some things that we don't make in the United States, certain metals, especially heavy-Earth metals, certain materials just globally aren't really worn 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, 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. I think it's one known, Rivian, it's 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 is just working against you? Are you just pushing against the tide all the time? An important part of my job, and it's increasingly so, is looking at all the unknowns in the system.
And we think of this just not for me, but for 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 now, three years now, five years now. And what are the things that are somewhat of 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 dependence as little dependency as possible on Chinese supply chain that carries with it assumptions around costs and different cost structures. But that was one key takeaway.
And so in that way, we've aligned the business to the intent of both all political parties in the United States. The other is that there's a big push for US capability and both technology and US capability in manufacturing. And so putting aside some of the noise and short-term changes that have impact, real impacts on us around electric vehicles and some of the policy electric vehicles, we find ourselves very aligned in terms of building deep technology expertise in the United States. The 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 we're in the US company and 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 in jobs in the United States. We employ close to 16,000 people here in the US. 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 the administration on that. And there's a lot of support and enthusiasm for what we're creating and building in that regard. You should just bring a R2 to the White House. You should get President Trump and then R2 and you can say everything's computer.
Well, if I ask him, we'll see. Yeah. Do you go to Marlago and you're R2? 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.
Well, see, 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. Here we go. I say this all the time.
Michael Jordan has a quote I just love, which is that both Republicans and Democrats buy Nike's. And the same is true for Rivian. And 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 by our vehicles and love them.
We have a lot of Democrats by our vehicles and other people that are in the middle. We have independence. We have 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. Although I asked 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 that maybe helped you. It's been interesting to watch out.
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 again, they look at anything important things in Tesla's case. They do have a great set of products, Model Y, Model 3, a great product.
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. I want to get to some more product questions and things about my R1H driving.
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.
And I say that with a smiley. So if we look at our trajectory, 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 more challenging environmental launch and 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 well into 2023 around just our ability to get enough parts. And so we were starved for parts, which manufacturing really benefits from predictability and being steady and are on off nature just created a huge amount of unexpected fixed cost overhead. And then as we came in at 24th, things started to really come together.
We launched a lot of these vehicles. We call our gen two version of our one. And so Q4, 24, we were positive gross margin, Q1 and 2025. We had over $20 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 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 is part of the trade negotiations that have been happening, put in place export control where they didn't allow export of magnets into the United States.
And so we just couldn't make motors as motors in the magnets. And so we had this from 14,000. It's produced in Q1 to around 6,000 and 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 these years going to be, we'll produce in some more vehicles in a second half a year than we did in the first half. And then as you said, the launch of our two really ignites the business. It allows us to get to a level of volume that helps cover our operating fixed costs, like our plant fixed costs, and then the overall apex of the business, all the R&D and S&A, 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, on production. It becomes even more important if you're extremely vertically upgraded, which we are. And so once you get to that scale, that vertical integration creates a structurally-vanish cost structure, but you need a certain level of scale, which R2 brings for us. Okay.
And maybe you'll won't be in this quarter, but maybe you'll have my R2 lease. And that'll help. That'll help. But you're going to have to convince someone of this decision.
And so I'm going to 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 question from him. I'm going to play it. Why did you get a flat tire ribbon?
Man. And what else do you like about the car? That we have the car for it and it opened at school. So he did you hear the beginning of the question?
It couldn't quite hear the beginning. It's why did we get a flat tire ribbon man? I heard the ribbon man, which I really liked that. 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 ribbon? I actually don't know.
Did you run over a nail or something? I don't know either. I don't know. It's just like any time now he sees a ribbon, he's like, that's a revian.
It has a flat tire. And I had to explain to him that actually all cars can. The plot tires. Yeah.
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.
The key card actually, it's not supposed to be used other than like sort of emergency putting your wallet or put it somewhere and hold on to it. But the idea is your phone's really key. I don't know if the team, when you loaned it, set your phone is key, but that's the idea. It's true.
I did have it set up on my phone for a little bit after we had the key card. Okay. Any other things you have to say to my four-year-old son in terms of why he should tell me to get this car. Ah, why?
I have a six to seven and nine-year-olds. I have a perspective of what the kids really enjoyed with it. So I say in the case of our two, my boys have spent a lot of time on our two. A lot of the fun little features we have on our one, like the flashlight and the door are still there.
There's tons of swords. The front trunk's great in our two. But we put in a few more features. So the rear glass drops completely in our two.
It makes for like a really nice open air experience. We 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 event for all your gear. So I think he'd really enjoy the R2, but it's also easier to get in two for kids because it's a little lower than the R1.
So my kids prefer the R2 over the R1. Okay. All right. I've got a lot to tell my four-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 me a lot about cars often after I've listened to Coder or just when I'm test driving cars or thinking about it. So I want to read the text I sent earlier this summer. I said, drove RIVI in loan or upstate.
No problem charging, but maps are fucking terrible. The good news is you fixed one of these problems, the maps. Right? Yep.
We launched a great partnership with Google. So the maps are now in partnership with Google. And it was an area that there's 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's just great working with the Google team to develop this. It's really special. It's a wonderful application.
And did you work with the Google team on sort of the underlying infotainment system that's based on Android, right? 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. 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. I love that. So we checked one box there. Check one box.
We need to take another break. We'll be right back. But you know, one of the main reasons I got a Machi actually had to do with CarPlay. Do you still hate CarPlay?
I still have to wait to ask it. 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's obviously the CarPlay. So it feels the same in every car.
That environment and what we create as a living environment. And rather think of it more all a cart, create all the same applications. So you have a YouTube, 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 the other, 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 are 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 part? What's the conditions outside the vehicle?
What's your driving history? What's your preferences are? Knowledge of all of that at an ecosystem level that allows us to present a richer, better experience for you as a driver or a community 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, you know, essentially with a set of bubbles that feel very much like a, you know, like a car play experience.
And so piece by piece, everything that someone may have missed from the car play experience, whether it was mapping, soon we're going to have a 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 review. We accept that.
It's a decision. I say this all 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 has many, many 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 goals 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. So what I'm hearing is you're definitely doing car play ultra.
Yeah, that's what the takeaway is. That is what you just said. I mean, 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 that but there's a lot more coming. More about messaging. Yeah.
So think messaging, think vehicle access. So think like, you know, getting into the vehicle with, you know, watch an ultra wide band. And there's a whole host of things coming, but you don't need to use car play to do that. You can do it.
You can do it. I agree. And I will say my three years ago, four years ago, car play 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 near the top of the list for this next decision, which is AI and autonomy and self-driving kind of grouped that all together.
It's 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 the studio in New York, maybe touching the wheel a couple of times, maybe I touch it two times.
How do you get there? Wait, we can spend the rest of the time on 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 2021, 2022, maybe even, is you had a perception platform or stack of perception, which maybe cameras and radars, maybe in some cases, cameras, radars and ladders, that would see the world or perceive the world and identify all the objects, it would classify those objects, assign vectors to those objects, 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 asthma tote of Cape Billy. And while that was being developed, a whole new approach to thinking about how to develop self-driving systems merge, which was to really to use AI, which interestingly, AI was not AI as we know it today, it 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 in 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, which we launched in the middle of 2024, is we brought all of our perception stack in-house, 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 interesting events. And we use that to feed the training of a large parameter model, like a foundation model for driving.
So a large, you know, it'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 simple analogy is if I were 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 of people who have heard of an end-to-end approach. We take this approach of having data come in, you use that to train the model, and then that model determines how the vehicle is 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 to highway assistance, a highway feature where you can be on the highway, you take your hands off the wheel, your eyes, stay mostly on the road, otherwise the vehicle's driving itself. The next extension that is, hands off the wheel, eyes on the road everywhere.
So any hyper-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.
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 as 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 compare it to the next 10 years, it's going to be a completely different trajectory such that by early 2030s, it's going to be sort of inconceivable to buy a new car and not have it perform at a very high level from a self-driving point of view. 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 of the debate and no one's really debating it that there is the LiDAR versus cameras.
And Tesla's going on cameras saying we don't need LiDAR. What about Rivian? Does there be an LiDAR? 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. Well, 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 world with two eyes. And if you look at the evolutionary tracks of many species of animals, most animals have multiple modalities of sensing. And the ones that operate maybe the most extreme environments, let's say extreme darkness, generally combine some optical perception with some wavelength-based perception, often sound waves or sonar bats, for example, is our view is it's definitely beneficial. And our approach to sensors has been, we need to rapidly build our foundation model as fast as possible to test us a lot of vehicles and it's been great progress and an amazing product.
So we have more megapixels of cameras, we have 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, to start to deploy with. So not ruling out lidars, what I'm hearing?
No, I wouldn't rule out lidar. And there's another thing I just say, which is important to note, I think a lot of the debate around lidar was born out of a AB1.0 where you actually had a rules-based environment where this idea of like a early fusion or building of an neural net wasn't there. And 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 information on the front of the model. And the cost of lidars is used to be tens of thousands of dollars just now, low, couple hundred bucks. And so it's a really great sensor that can do things that cameras can't. 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 do you plan to do about that? That's something we're absolutely focused on. The way of course this looks at some of our early builds, our vehicle liabilities are getting much, much better.
But even with that, even with the fact that there's 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 our reliability gets to best in class, coupled with all the product attributes. And so that's our goal. And our one is continually improved since we launched.
And then our two is a further step change from that with all the learnings that we've made around our production process, production quality, reliability. And it is tough for us when we first launched our first year, we came out number one of customer satisfaction, put us our first time building vehicles at scale. So not surprisingly, we had more challenges with just ramping quality systems to begin to begin with. Well, good news for you as I experienced that customer service when I had that fly tire.
Yes. So I know about that. And so does my four year old. So it's looking good.
I love it. 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 circle. You're getting the hook.
Thank you for the time. I really appreciate it. All right, wonderful. Thanks.
I would like to thank RJ's Grinch for taking the time to speak with me and put up with my sons. Very fun questions. And thank you all for tuning in. I really enjoyed my time as Neeliah here on Decoder.
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