Rivian Says It's Not Considering a Hybrid Model. Slowing EV Sales Suggest It Should Keep an Open Mind

Automakers are quickly pivoting from their once-ambitious electric vehicle (EV) roadmaps to building more hybrid vehicles. The reasons are plenty, including the expiration of EV tax credits last year, the higher cost of materials due to tariffs, and falling consumer demand.

Many automakers, including Volkswagen, Ford, and General Motors, have recently reignited their interest in hybrids and are ramping up new model development.

And some companies that were once betting on pure EVs are switching to extended-range electric vehicles (EREVs), which use small gas-powered engines to charge the vehicle's battery for a longer range but don't power the vehicle's wheels.

But despite the shift, Rivian (NASDAQ: RIVN) remains committed to the road less traveled with its battery-powered-only approach. CEO RJ Scaringe said last year,

"We're not planning to offer an EREV, or effectively, a series hybrid, which would involve putting an engine into the vehicle, so that's not in our product roadmap or something that we are at all contemplating."

I believe the company should keep an open mind instead.

Image source: Rivian.

The market has (mostly) spoken

American car buyers are losing their appetite for EVs -- electric vehicle sales fell 27% year over year in the first quarter of 2026 -- and automakers are taking notice.

Ford discontinued its all-electric F-150 Lightning at the end of last year and had a $19.5 billion write-down for its EVs in 2025. The company even changed some of the bonus structure for its CEO payouts from EV-focused sales to include gas-electric hybrid sales goals as well.

General Motors has made adjustments, too, with Automotive News recently reporting that the company has paused work on its next-generation electric trucks and SUVs indefinitely. Earlier this year, GM took a $6 billion write-down related to its EVs.

And even some brands that were squarely aimed at the EV market are quickly yanking the wheel in a new direction. Scout Motors, which is owned by Volkswagen and is being revived from the automotive grave, was originally going to be an all-electric company, but will now sell hybrid options alongside its battery-powered versions when its vehicles go on sale next year.

Scout's approach is actually the most interesting, because Scout uses some of Rivian's software and technology architecture through a joint venture established by Rivian and Volkswagen in 2024. Scout's vehicles will be mostly battery-powered, but some will be sold as EREVs.

And this is where I think Rivian could benefit from a slight shift in its EV approach.

It's barely a compromise

A recent Pew Research survey found that 44% of potential car buyers are open to buying a hybrid compared to just 32% for EVs. And interest in EVs is lower than it was four years ago.

That should matter to Rivian, especially as the company just started production of its R2. The smaller SUV starts at around $58,000 right now, with the eventual target of $45,000 for a base version coming in late 2027.

The R2 will be Rivian's most important vehicle to date and could help the company appeal to the masses with a more affordable EV. But it's still not cheap. And if the base version is delayed, it could be nearly two years before it arrives.

Range anxiety and cost are two of the most-cited reasons why buyers don't want an EV. Buyers simply want EVs that have the same range as gas-powered vehicles, with the same ease of use as a gas station provides. Mostly, automakers have failed at giving it to them.

So, why not help change the skeptics' minds with an EREV Rivian? I don't assume it would be easy or cheap. But neither is developing new electric vehicles.

Volkswagen and Rivian already have a good working relationship, so why not negotiate a way to implement Scout's EREV tech into some Rivian models? That would give the company a vastly wider potential customer base while still selling, essentially, electric-powered vehicles.

Scaringe has emphasized that his company is committed to zero emissions. I don't believe Rivian has to give up that goal to adopt EREVs. Adding a hybrid into the mix could simply be a stepping stone to getting more buyers used to relying on electric-powered vehicles.

Rivian's brand is built around adventure and electrification. The latter can still be true if the battery remains the sole provider of power to a Rivian's wheels. And not all versions would need to be sold with an EREV -- just a few at first, to gauge interest.

It's worth noting that 80% of reservations for the upcoming Scout vehicles are for the range-extender versions.

As Scaringe added on his company's earnings call months ago, after saying Rivian won't sell a hybrid, "But I do think it's important to note that part of the journey of electrification is providing customers with choice ..."

Agreed.

Chris Neiger has positions in Rivian Automotive. The Motley Fool recommends General Motors. The Motley Fool has a disclosure policy.