‘Fork in the road’: CEO of Amazon-backed Rivian on why carmakers need to invest in EVs | Automotive industry

C.Electric car makers focused on selling fossil fuel engines risk falling “woefully behind” technology by the end of the decade, according to the boss of Amazon-backed US electric car maker Rivian.

Rivian founder and CEO RJ Scaringe said the auto industry has reached a “crossroads” over the choice between short-term profits and heavy investments, especially in software, to survive.

Many are choosing to profit by ramping up production of gasoline or hybrid pickup trucks and SUVs in the U.S. and Europe, he said in an interview in London this month.

Much of the auto industry in the US and Europe is lobbying to slow the transition to electric vehicles; instead, it prefers polluting but profitable internal combustion engine vehicles.

The retreat is particularly notable in the United States, where Donald Trump’s administration has eliminated incentives to produce and purchase electric vehicles. Ford, General Motors, Honda, Stellantis and Volkswagen, which all have major operations in the US, have collectively written off more than $70bn (£53bn) on previous EV investments, according to Reuters.

Scaringe said decisions to focus on profitable gasoline cars would come back to haunt manufacturers.

He said: “This looks really good financially for 2026, 2027 and maybe even 2028. But as we get to the end of the 2020s and the 2030s, I think we’re going to see a lot of companies unfortunately falling woefully behind in terms of their technology.”

The shift towards electric vehicles has led to uncertainty about demand for Rivian, which has just begun deliveries of the R2 SUV in the US. Scaringe said the car was “either a make or break” for the company as it tried to turn a profit for the first time.

Rivian was founded in 2009 and delivered its first electric vehicle in 2021, the year it was listed on the stock market.

Rivian stands to lose $3.6 billion in 2025 due to heavy investment in R2 and autonomous driving capabilities. The automobile manufacturer, whose market value exceeded 100 billion dollars in its initial public offering, fell to 21 billion dollars; But Scaringe could be a candidate for stock awards worth $5 billion if he can push the share price to targets well above its all-time high.

Scaringe said the “more harmful and more dangerous aspect” of the move towards electric vehicles is not the delay in switching from gasoline engines to batteries, but the failure to develop the software that increasingly controls every aspect of the vehicle.

Gasoline vehicles have a design that distributes computer chips throughout the car, from the engine to the seats and side mirrors, rather than a central architecture that can be easily replaced, he said. Relying on a single computer instead reduces production costs by “thousands of dollars,” Scaringe said.

Rivian’s heavy investment in digital technology and software has paid off, at least partially. Besides the Amazon investment, which includes a deal for up to 100,000 delivery vans, Rivian and Germany’s Volkswagen agreed to a $5.8 billion electric technology and software joint venture in 2024, and Uber invested $1.25 billion in a deal that could also lead to the sale of 50,000 robotaxis.

Scaringe said Rivian could help increase electric vehicle uptake in the U.S. despite the White House’s reaction. Electric cars accounted for 7.8% of all U.S. auto sales by 2025, and Scaringe said the R2 alone could eventually increase market share by three or four percentage points.

“The goal is to become a very large company with annual sales in the millions,” Scaringe said.

Scaringe is skeptical of automakers’ claims that buyers don’t want electric vehicles, saying instead that the dominance of Tesla’s Model 3 sedan and Model Y SUV in the U.S. is “a sign of a market hungry for great options.” Chinese automakers dominate the global EV industry but remain locked out of the US due to prohibitive tariffs.

Rivian is also aiming to sell the R2 in the UK and mainland Europe, but that won’t happen for at least a year.