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…So now we have what we call an East zone controller, a West zone controller and a South zone controller. When you say controller, these are the computers and the integrated kind of systems management? Yes. There's three real-time computers in the vehicle that run the whole platform. So they run everything from propulsion to body control to your lighting, all the real-time systems. And that was a big lift to move all the software into this new architecture. But we also used that as a chance to completely change out the way we approached autonomy. And so, that effort started in about late 2021, where we recognized we needed to move entirely to a platform where we owned the entirety of the perception stack. So all the cameras in our case, also the radars, a much more powerful compute platform for autonomy. And launch that in a way such that we can build this large data flywheel where we can train the system. And what we often call end-to-end training where we have cameras, radars that feed in, that's building a large parameter, multi-billion parameter foundation model that governs how the vehicle drives. Then deploy that in a distilled state back into the vehicle. So that's now in the car and the slope of the curve in terms of progress and additional features is going to be really steep. Your Gen 1 won't have that, but Gen 2 as well. But that was a huge part of the lift and all that laid the network architecture, the consolidation of ECUs, this refactored software stack—it laid the foundation for us to do a lot of other things. So we're about to launch our lower price vehicle, which we call R2. And higher volumes, I presume. Much higher volumes. Can you give us the comparison between R1 volumes and R2 volumes? So R1, the average selling price is just over $90,000. And so in terms of these things are always subject to boundary diagrams, but if you draw the boundary diagram around electric premium vehicles, like premium SUVs that are over $70,000, we're by far the bestselling vehicle in that class of vehicles. So we have about 35% market share as we draw that boundary diagram. So differently, we have the bestselling electric SUV over $70,000 in the United States. Interesting in California and the state of Washington, we have the bestselling SUV—electric or non-electric—in California and the state of Washington. That fits with what I see out on the roads. So if you're here in the Bay Area everywhere, it is the bestselling premium SUV. But the size of the market for someone who's buying a $90,000 vehicle is just naturally more collapsed. So how many R1 do you ship a year? This year we'll do… call it 40-ish. 40,000, okay. And so what are you tooling up for in terms of R2 production? g a $90,000 vehicle is just naturally more collapsed. So how many R1 do you ship a year? This year we'll do… call it 40-ish. 40,000, okay. And so what are you tooling up for in terms of R2 production? So R2, we're going to build first in our plant in Illinois, just south of Chicago, a town called Normal. And there we'll be building up to 175,000 R2, in addition to R1, in addition to our commercial vans. But we're also building a plant in Georgia, which will be the further expansion. And the size of the market for R2 and then R2 variants— there's an R3, there's other things we haven't yet announced—but there's a whole host of products that sit on that platform. It's many millions of units. It just, it's the whole, if you think of it like the whole automotive demand space, the average price of a new car in the United States is $49,000. The most popular configuration is a five-seat SUV or crossover. And so it's just a huge space. So you're on the cusp of a very significant ramp up. Yeah, so sort of the first step is going from, in total, call it sub 50,000 units a year. The plant will be capable of 215,000 units with just our Normal facility—Normal, Illinois facility. For the fixed cost to run, which? Well just to run an engineering team to engineer all that content, but it's only finding its way into a small number of vehicles. You're saying the systems are very complex, and so you want to amortize that complex. So once we add volume, then it becomes this enormous structural cost advantage because we don't have, typically you have a lot of tier one suppliers that provide all these systems and they add a lot of cost, and for that matter, a lot of complexity. So because we do it all ourselves, all that complexity and cost is wiped away. But you need the volume to really have it make sense. It seems interesting to me that there was a gap in the market for an electric SUV, because when you think about it, you guys were thinking about starting originally with a sports car. That's what you founded the company to start with. And my sense is that you said, “Huh, the electric car company starting with a sports car idea has kind of been taken.” Exactly. Yeah. “So maybe we'll pivot…” But I've driven the Tesla Roadster. It's not a good idea to put a ton of batteries in a sports car. It doesn't handle well, whereas an SUV is heavy anyway. It's perfectly suited to being an electric vehicle. And so why were you guys able to arrive into the market and take what feels like the most obvious form factor for an electric vehicle? heavy anyway. It's perfectly suited to being an electric vehicle. And so why were you guys able to arrive into the market and take what feels like the most obvious form factor for an electric vehicle? Boy, is that a good question. It's funny how things change over time. So today it seems obvious, but in 2013, 2014, I would go meet with suppliers and CEOs of very large suppliers, and say, “We're working on an electric SUV and electric truck as a flagship product. Following that, we want to launch more affordable electric SUVs.” And the lack of understanding of what an electric vehicle can do in those conditions was so extreme that it's hard to even appreciate this. I mean, I would get—to say laughed out of the room is probably accurate. I mean, it would be like, “Why would you make an electric SUV?” And the questions would be, “Well, what if it has to go over a bumpy road” or, “What if it needs to go through water?” And so there's this perception that you couldn't drive an electric vehicle off road, you couldn't go through deep puddles. Ferrari. Ferrari, and you're actually quicker than that car. And you've got groceries in the front trunk, your kid's in a car seat, and silently it just out-accelerates any of those things. And then it can veer off the road and drive over a mountain. So we wanted to make this product that just completely challenged those incorrect assumptions around technology. So if you rewind those suppliers in 2013, 2014, is what they missed one, they were maybe thinking about the Ford F-150 market, which will be slower as adopters? But there's a very large, just general everyday SUV market and kind of outdoor enthusiast market. Is thing one they kind of misunderstood some of the truck markets? And then secondly, you can actually make a better vehicle when you have all this abundant ships power available to you, especially as you get into the outdoorsy stuff, having just an abundant source of power is actually pretty nice for a lot of the other functionality. Yeah, I think with electrification, we have found that particularly early on, this has shifted, but there was this perception of what an electric vehicle buyer was. And if the description of a Rivian was, it's electric, and then you describe all these compromises, that sort of fits the historical, call it 2014 description of electric vehicle buyer. You're buying a vehicle accepting a bunch of compromises. But we have customers today that are not buying it because it's luxury, they're buying it because it's great to drive, it's fun, it's capable, it fits their lifestyle. Noone ever got super excited about a Chevy Volt. They're like, “This is the car I want.” We wanted a vehicle that was like, if you're cross shopping this with a Porsche Cayenne Turbo, or let's say a Wrangler Rubicon or you'd be like, “Wow, this is a better vehicle.” And it actually does the things that the Rubicon can do and it does the things that the Cayenne Turbo can do in one car.…

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