After notching epic gains for several years running, America’s electric vehicle market is in a bit of a slump. Rivian founder and CEO R.J. Scaringe says that largely boils down to a lack of great cars.
“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,” Scaringe said during a wide-ranging interview on InsideEVs’ Plugged-In Podcast that airs Friday morning. “Until you start to have a number of choices, we’re not going to see the market really expanding.”
He called out the Tesla Model Y and Model 3—which together make up around half of America’s electric market—as two good options, but he stopped short of naming others. The popular Hyundai Ioniq 5 and Kia EV6 also come to mind.
Electric cars have stalled out at roughly 8% of new vehicle sales, despite over a dozen new entrants in the last year. In 2024, EV sales grew by 7% to 1.3 million units—a solid bump, but far short of the 46% increase seen in 2023. That downshift in the pace of growth has caught automakers by surprise. They expected sales of EVs to shoot up faster than they have, and many are now rethinking their electrification plans as a result.
But Scaringe argues that the auto industry doesn’t have an EV problem—it has a product problem. The success of the Model Y proves it, he said.
RJ Scaringe, Patrick George and Tim Levin
Photo by: Maddox Kay/InsideEVs
“Not in every case, but in a large number of cases, I would say the product’s not that good. It’s not that desirable,” he said. “So you could say it’s that people don’t want to buy electric, but I don’t think that’s the case. I think the reality is they don’t want to buy marginal, okay-ish, electric cars.”
To be sure, broader concerns around EV range and public charging infrastructure are also keeping plenty of Americans from taking the plunge. But scant options—or no options—that fit a customer’s needs are indeed big barriers to adoption. The limited field has narrowed EV sales to people who like what’s out there or are willing to compromise to go electric.
The Tesla Model Y is one of a few great electric options under $50,000 in America, Rivian CEO R.J. Scaringe said.
Photo by: Patrick George
“Some people want a true SUV, or some people may want a minivan. Some people may want something that’s more of a hatchback,” Scaringe said, naming a few vehicle segments that have no or few electric options. “So you have a lot of people that have had to be quite flexible in their form factor desires, their aesthetic desires, their brand desires, because there’s really a singular set of good choices with Model Y and its sibling, the Model 3.”
The smaller R2 crossover, priced at $45,000, will be Rivian’s entry into the mass market in 2026.
Scaringe doesn’t expect things to improve that quickly in the near term, which he sees as a boon for pure-play EV makers but bad for the U.S. EV market and America’s competitiveness abroad. As federal policy rollbacks incentivize some automakers to delay EV investments, it’ll create a “vacuum of competition” for Rivian and Tesla, Scaringe said.
Rivian’s R2 crossover, coming in 2026, will be its first entry into the sub-$50,000 arena following the R1T pickup and R1S SUV, which sell for around $90,000 on average. But Scaringe says the car market needs a lot more than that to get people off of fossil fuels in large numbers.
“We need to have a Model Y as a choice, we need our R2 as a choice,” he said. “Ideally, there’s three or four, five or six, or 10 other great choices in order to draw in the other 92% of buyers who aren’t buying electric today.”
The full interview with RJ Scaringe will be released Friday morning. Find more episodes of the InsideEVs podcast here. Contact the author: Tim.Levin@InsideEVs.com
