Rivian Automotive (NASDAQ:RIVN) was one of several automotive companies that reported strong deliveries in the third quarter, amid increased demand as the $7,500 EV tax credit expired. While the credit expiration could pressure EV demand in the short term, Rivian CEO RJ Scaringe sees one silver lining.
Rivian CEO on Federal Tax Credits
The expiration of the federal tax credit could lead to lower consumer demand in the fourth quarter, with early October data already showing weak sales volumes.
As an electric vehicle-only company, Rivian could be hurt by the end of the tax credit, though Scaringe said there is a positive to its expiration.
"I would say in the medium to long term, it actually simplifies things for Rivian," Scaringe said recently, speaking at the Rotary Club of Atlanta. "Narrowly and myopically through the lens of Rivian, it actually creates less competition.
Scaringe's speech covered other automakers scaling back their electric vehicle ambitions, as reported by InsideEVs. Legacy automakers like Ford Motor Company (NYSE:F) and General Motors Company (NYSE:GM) are among the companies that have announced plans to scale back EV production and cut several models from their release schedules.
"You're going to see a lot of manufacturers step back pretty aggressively from electrification."
Scaringe said he was confident that electric vehicle demand would pick up shortly, after the "short-term impact" from the ending of the tax credit.
"I do think in the fullness of time, it doesn't change any of the outcomes."
Read Also: Rivian Q3 Highlights: Revenue Beat, R2 On Track For 2026 – ‘Significant Progress’
Long-Term Future of Electric Vehicles
While Scaringe admitted that some companies will take a step back in the short term, he still believes that electrification is the future and the companies that don't focus on electric vehicles could be hurt five years or more from now.
"I think every manufacturer needs to be developing world-class leading technology in what is undeniably the future state of this industry. And throttling back right now will make it extremely hard for those companies to participate in the 2030s if you look at the competition that's coming, particularly from China," Scaringe said.
Scaringe has discussed the growth of electric vehicles in China in the past.
The Rivian CEO previously highlighted China having many low-cost electric vehicles available to consumers, while there are only "two great, high compelling choices" priced under $50,000 for American consumers.
With or without the federal tax credit, the affordability of electric vehicles remains a key necessity for growth, according to Scaringe.
Rivian is launching the R2 next year with a starting price planned at around $45,000.
Scaringe previously said the R2 offers “the magic of what is a Rivan at that higher price and puts it into a slightly smaller package.” The R2 will open up the potential customer base “dramatically” with a starting price of around $45,000, Scaringe said.
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