Rivian's R2 Is Winning More Than Trophies and Fans

Rivian (NASDAQ: RIVN) investors have spent plenty of time watching production ramps, cash burn, and financing announcements. Here's a more enjoyable development: the R2 just won Top Gear's SUV of the Year at its 2027 U.S. Car Awards. Unfortunately, for Rivian and its investors, companies can't pay a supplier with a trophy or award. Still, this recognition matters more when noting that the R2 has already become Rivian's best-selling vehicle.

Together, those results suggest Rivian's appeal can extend beyond its expensive flagship vehicles as well as open new doors overseas. Let's dig in.

Beating familiar faces

Top Gear's award isn't the only independent endorsement. In August, MotorTrend ranked the R2 Performance first in a comparison against the Hyundai Ioniq 5, Tesla's (NASDAQ: TSLA) Model Y, and Ford Motor Company's (NYSE: F) Mustang Mach-E – those are not rivals or models to scoff at!

Image source: Rivian.

The publication praised Rivian's combination of space, performance, design, and approachable technology. It also identified shortcomings, including rear-seat comfort and expensive paint options. That's useful context for investors. R2 isn't simply impressing people because it is the newest vehicle in the parking lot, although that can certainly be a positive factor. In that comparison, reviewers preferred the overall package to several well-known and highly credible rival alternatives.

For a company trying to reach more customers, having a competitive product is a pretty important place to start, and the media attention, as well as growing brand awareness, is worth something for a young company.

There's a business behind the buzz

During the third quarter, R2 outsold Rivian's R1 lineup and commercial vans individually, according to the company's earnings release. Companywide deliveries reached a record 19,248 vehicles, increasing about 46% year over year, with R2 driving much of the sequential gain. Those totals include all Rivian vehicles, rather than R2 alone. But the new SUV's position within the lineup shows it is already making a meaningful contribution. That's also largely not factoring in the second production shift of the R2 added late in the third quarter, nor the upcoming third shift expected next year.

The opportunity should only improve in the coming quarters. Rivian lists its entry-level R2 Standard at a starting price of $44,990, with availability planned for 2027. That is a different version from the Performance model MotorTrend tested, so the review doesn't establish what the cheapest R2 will deliver. That said, the lower-priced models should help the R2 become even more of a driving force for increased production and deliveries.

One thing investors sometimes overlook is that the R2 is going to open a new door for the company by expanding Rivian's global reach. Its R1 vehicles have served customers in the U.S. and Canada, while Rivian is positioning R2 for its European entry. That gives the EV maker another avenue for growth beyond convincing American shoppers to give a new brand a chance. European buyers could eventually join the party, too – although Rivian hasn't confirmed when that rollout will begin.

What it means for investors

The encouraging thing for investors is that product recognition now sits alongside actual sales momentum. Rivian has a compelling new vehicle in the R2 that management hopes customers will eventually appreciate, both in the U.S. and overseas. The financial takeaway remains unclear for the time being. Its automotive business still posted an $80 million gross loss (which excludes costs like interest, taxes, and operating expenses) during the quarter. Strong reviews and higher deliveries don't automatically produce a more profitable picture, which remains a huge step for long-term investors as Rivian drives toward breaking even.

For long-term investors, watch whether R2 can sustain customer interest as availability expands and lower-priced versions arrive. That should tell us more than the next award announcement. The trophy is nice, the media attention is a positive, but building a larger customer base around a vehicle people want could be considerably more valuable if Rivian can improve production efficiencies and maintain cost discipline.

Daniel Miller has positions in Ford Motor Company. The Motley Fool has positions in and recommends Tesla. The Motley Fool has a disclosure policy.