RJ Scaringe, Rivian’s CEO, spoke at Morgan Stanley’s 11th annual Laguna Conference, addressing the possibility of implementing leasing and how it could reveal more price incentives for customers.
According to Scaringe, “Rivian has purposefully delayed leasing because it’s confident in the residual values of its vehicles.” Scaringe described how the used marketplace serves as a “healthy check” on pricing for the corporation. He continued, “There may be some pricing space if cars sell for more than our MSRP,” implying that supply is outpacing demand.
Scaringe claims that Rivian’s market-leading residual values will produce “powerful leasing packages.” Moreover, prices six or 12 months after being sold are helpful measurements to determine the “sustained robustness of demand.”
Additionally, leasing would be “valuable for us to unlock leasing,” which Rivian does not currently provide.
When questioned about the Inflation Reduction Act (IRA), Rivian’s CEO said, “It works great for leasing.” He continued, “$7,500 does work.” Scaringe claims this will lead to creative ways for customers to acquire more pricing incentives.
Rivian’s CEO believes the company has “rounded the corner” after exceeding forecasts in the second quarter by delivering 12,640 vehicles. Compared to the year’s first three months, deliveries increased dramatically by 60%, while production increased by 50%. The company also saw an increase of $35,000 in gross profit per vehicle delivered. Scaringe claims that cost reductions will follow when the business makes better use of its manufacturing in Normal, Illinois.
The EV maker plans to release several exciting changes in the first half of 2024, including new features and cost-cutting measures to pave the groundwork for its next-generation R2 series.
