Beyond EVs: Rivian founder & CEO RJ Scaringe on AI, robotics and the next big bet

Imagine setting your makeup, then forgetting it's even theirs. Meet new groupie setting mist from Mavily New York. Gel to mist technology locks in your look for up to 24 hours, with flexible all-day comfy grip. No tightness, no stickiness, no residue. Just plump, dewy, hydrated skin that still feels like your skin. Try new groupie setting mist from Mavily New York. Every car company in the world has three choices. Today's guest is RJ Scarrange, founder and CEO of Rivian, the automaker on a mission to make driving more adventurous, AI-powered, and of course, all-electric, rethinking the way we get around. Since being founded in 2009, Rivian has grown from a small startup into a major EV player, delivering tens of thousands of vehicles, winning backing from companies like Amazon and Ford, and raising billions of dollars, including in one of the largest IPOs in US history. Now it's pushing into robotaxies, more affordable EVs, and even AI chips, teaming up with players like Uber and Volkswagen, and positioning itself as the company that can lead us into an AI-defined future. How much of this is about reducing your own reliance on companies, like Nvidia, versus a bid to compete more broadly in the AI compute space. In this conversation, we'll get into the early days of building the brand, "I refinanced a house that I had, and then my dad refinanced his house, pivotal moments of growth and challenges." The Rivian's business model doesn't work without R2. The goal is to make money. We have to make money so they can have self-fund our significant growth. And what's next? The biggest shift to transportation, as big as electrification may seem, is not actually electrification, it's the shift to vehicles being able to drive themselves. RJ, thanks so much for joining us. Thanks for having me. So just to start off, you have described yourself as a lifelong car enthusiast. Take us back to your early years, where did you grow up and what sparked your ambitions early on? Yeah, I've been in the car since my earliest memory, it's hard to even say why. I think probably the freedom and the ability to explore and go places further than you might be able to walk, at least in a reasonable time frame, was what attracted me to it. But just enamored with it, the story behind every car is like the amalgamation of thousands of people working together to make something, and it comes together in a vehicle. So there's like the history, the stories. And so I grew up around cars, and I grew up as I got older, working on specifically Porsches, like old, air-cooled Porsches, and sometime along that journey, when I was a kid, I decided I wanted to start a car company. Looking back, it's the kind of thing I'm a parent now, I have three kids, they're amazing. And I think if my oldest is 10, it was about the age 10 when I told my dad I wanted to start a car company. And so it's really amazing how my dad responded to that, because he was so supportive of both my enthusiasm for cars, but then this idea that I would eventually want to go start a company making cars. So growing up, you always knew you wanted to be a founder. You always a kid, you know, think of it as like I'm going to be a founder, it was more like I want to like build a car company. So, you know, I thought I even knew the word, I even knew what an entrepreneur was. But yeah, so it was like for my earliest, like some of my earliest memories, it's always been in my head to go build a company. And this was in Florida, you grew up. Yeah, I grew up in Florida. Yeah, and I think I read that your dad, you were very close to him. He was a fellow engineer who built his own firm, is that right? Yep, yep. He just did his example, kind of play a role, and especially in guiding you on the path that you set out on. My dad's, he's like an engineer's engineer. So he likes to build things, he understands how things works, he asks why. I learned a lot, not knowing at the time, but learned a lot about parenting just through seeing how he sort of reflecting on how he was raising me and exposing me to learning new things, learning new skills, understanding how to put things together, how to take things apart. Just embedded in the way we lived, it was growing up, if the AC broke at the house, we would fix it. If we needed to build something else, we'd make it. And so I had a really hands-on dad from an engineering point of view, and just like a creation point of view. He wasn't as in the cars as I was, so I don't know where that came from. I just always been so drawn to them. But also just being around him, seeing him build his business from an early age, I saw like the process of him putting a company together. And did you always know EVs in particular, or did that kind of come later? It's a pretty complex journey, and as a kid, I wanted to start a car company as an enthusiast. As I got older, I realized cars were at the root of so many of society's biggest challenges, so everything from local air quality issues to the really big challenges we have in terms of global conflicts around access to oil, to, of course, climate. And so as that became more clear to me, I realized I wanted to work on finding a way to make cars better for the world. And I didn't know what that even meant. So this was well before, this is like in the 90s. So I was like, I want to make them more efficient, but I didn't really know electrification versus other sources of propulsion. So how did that kind of specific interest really come about? Because it really propelled you forward, right, this passion, this singular passion later on, to really get into the EV space and go ahead. Well, growing up, I really enjoyed the history of industry. So cars was one embodiment, but I loved reading about how, and it's pretty wild actually when you think about it. Like our parents, parents, parents lived in a world where they didn't have refrigerators. And just a couple of generations we went from a world where we could not travel long distances. You could travel as far as a horse could walk in a day. You could not have goods and services from all over the world, your fingertips, it was very hard to get certain things if you didn't live close to them. And you certainly weren't making phone calls or doing all the things that were just so natural to us. That was how humanity lived on our planet for thousands and thousands of years. And then in the last few generations, the idea of like having strawberries and cold climates in the winter or hopping on a plane in 12 hours later being on the other side of the planet or sitting in a room like this with the lights on and the air condition. These were all very recent things in terms of human history. So I was intrigued by that. So I learned about it, studied it. And that was what drew me into specifically the transportation, it's just like the story of how these car companies were built and how they were created. And it inspired me so much as a kid that my hope was that I could make something that would inspire other people. And so I wanted to contribute to this thing that I just saw is so powerful and so remarkable that in a few generations what humanity accomplished collectively as a whole. It's so true actually, such a good point. There's so much that we take for granted today when you really step back and think about it. So it's interesting because obviously it sounds like you had this conviction early on. You had the passion, but obviously going out and doing it is quite another thing, right? So I read that Rivian truly started from a clean sheet, which for those who don't know, it means literally creating a new vehicle from scratch without relying on existing platforms, parts or manufacturing from previous models. You have said, RJ, that there was no money, no team, no technology, no suppliers, no brand and no production infrastructure. Why and how did you decide to go and do that? Maybe the hardest part of all that is the no money part, because you need to raise capital, you need to have technology, you need a product that's desirable, you need a brand that connects with consumers. In order to do all those things, you need the capital, but when you have none of the capital, how can you show those things? So it's just like, it's sort of chicken and the egg infinite do loop where, how do you start the business? So for me, it was sort of brute force, you start with nothing. You make a teeny little bit of progress enough to raise a very small amount of money. And then you make a little bit more progress, and you raise a little bit more money, and slowly you start to build some momentum. But unlike where we are today, where I think the capital markets are much more open to investing in hardware companies, you know, and I started Rivian, it was 2009, like the idea of going to a venture capitalist and saying, "I want to start a car company," was like so foreign to them. Right. Right. Like after the recession or still feeling the recession. Yeah, like GM had just gone, was going through bankruptcy, Chrysler was going through bankruptcy. It's just like the very idea of going and starting something, and the meetings were like when you did get a meeting, or when I did get a meeting, they were like, comically bad. You know, the question started with, "So you're starting a car company, tell us about the product well, we haven't really defined the product yet." Well, what's the tech? You must have a great tech stock. Well, we have to go build that. All right. Well, who are your suppliers? Well, we don't have any of those yet. And so you just like go through the list, by the end of it, you're like, "Yeah, the likelihood of this is like very low." In starting any business, there's always, there's always, you know, it's always hard to start a business that, you know, where you're starting with your own momentum, and you have to create momentum, and you have to create engagement with investors with future employees, with partners, but a hardware company, and specifically a car company, is just uniquely hard in that way. Absolutely. So how did you navigate that? Because by the way, your story reminds me a bit of another guest we had on Jet Zero. I don't know if you're familiar with the aviation company, they're based on Long Beach. You know, the founder and CEO, Tom O'Leary, came on and he was saying, they literally started with post-its on a wall. That was it. Post-its on a wall and you knock them down and you're just like every single little step go one at a time. I wonder if like it was similar for you or how did you kind of like tackle things just from the beginning? - Yeah, I find the best entrepreneurs are the ones that have simultaneously a tremendous amount of optimism, but they balance it with reality and the ability to focus on removing risk. So taking a set of activities to reduce the risk of success, of getting to success. And that like shift, that work that goes into being optimistic but also finding what are the steps you can take every day was for me, I just was doing that and not fully even appreciating. And I kind of look back now, it's like the likelihood of getting to this point is like throwing a toothpick across the street into a straw and a windy day. It's like so, you know, it's very, very unlikely. And enough of the right things had to happen, you know, the combination of fortune, you know, good luck. Like the right person, the right thing, the right idea, mixed with really hard work or maybe a lot of tries throwing the toothpick, but that all can be either, but I wasn't thinking like boy, it's a one and a million chance that we go from nothing to something. It was more like what can I do? Like what's the thing I can do today to make it more likely to be successful? You know, and all those, the laws are compounding, all those things you do day over day just start to add up over time. - Do you remember like even one or two really early wins that just really got you over that hump mentally and allowed you to keep going? - There weren't like early wins. It was such a gradual, I mean, the first capital and just to like to make the point, I refinanced the house that I had. And then my dad refinanced his house, but that generated a grand total of like a couple of $100,000, which is a comical to think that's the seed financing if you will for a car company. But it was enough to make a little bit of progress. Then we secured a really small amount of money, like well under a million dollars investment and a little bit more, a little more. So, you know, it's just really hard. Like it's just really hard to imagine that early investors into something like this, like investing in a 26 year old with no experience running a car company and no team and no tech, which is like very, very high-risk investment. And so a lot of those investments that happened were just built on some level of confidence in me as a person to say, well, we don't know how this is gonna go. But we think you have at least some slim chance at making something successful out of this. - You know what, it's even more striking because I feel like sitting here today, I would have said, you are so good at raising money. RJ, you know, like you have so many amazing partnerships as I mentioned at the top there. You know, you won backing from players like Amazon as we talked about. I feel like it would be hard for one to imagine that it was ever difficult for you, right? But obviously people don't know the backstory and the blood sweat and tears it took to get here. I'm curious, you know, for those listening, is there anything that, you know, you learn from those pitch meetings or anything you did to get yourself mentally in the zone for those events that might help others today? - I mean, I'm sure everyone, this is like a sort of classic answer to this question in that. You have to be comfortable being told no a lot. You know, I say that it's sort of a classic answer, it's a cliche answer, but it is, particularly if the business is hard. If it's a hard business and it's not necessarily the popular topic to be financing from, like venture capital tends to move in like the whole community of venture capital starting investing in a category of companies. If your company's on that category, it'd be very difficult. Like car companies was not in the category of things that venture capital was investing in. And so the degree to which, you know, the number of times and the number of the meetings that ended with like, this is a really bad idea, including, you know, people that are well respected would say like, "Argent, you seem like a smart guy." And why, like, it's a shame to waste your intelligence and your capability on like this silly thing, like starting a car company. So you'd have people tell you that and you'd be like, "Okay, all right, well." - So to moralize that. - Yeah, so you just have to realize that the conviction you have and the confidence you have in what your building needs to be independent of what other people say. But, and this is the hard part. You need to learn from all those. You need to find a way to like learn to get a different response. So clearly, you know, clearly ultimately, we raise a lot of money. And the story of the strategy, what we were selling in terms of our vision for the business had to evolve to be something that was investible. And some of that was just like slow brute force progress, but some of it was also just learning how to tell the story. And I think if you're an entrepreneur and you're building a business, you quickly learn you have to be able to tell a story because you're describing a future state that doesn't yet exist, that you wanna go build. And unless you have capital from some other source, either a company started previously or you have to get other people's capital to go create that vision. And so communicating the vision is really important to investors. It's equally important to employees. So you have to recruit people. So you have to say, "Hey, you're someone that has skill and talent, quit the job that you're in." And come to this thing that's probably higher-esque at an early stage when you're just starting. And so you have to be able to weave the story of the vision together. And I think one of the things with storytelling and describing the mission or the vision for a business, is similar to teaching. If you can't describe why you're doing something, it probably means you don't really understand it. Like you don't really understand your vision or what you're trying to build, you know, like a rough idea. And so forcing yourself to really understand why do we deserve to exist as a company? And being able to articulate that clearly to yourself is important, yeah. So as a result, in Building Rivion, there are lots of pivots and evolutions of the idea to arrive at a robust answer to that question, which I'd say in the early days, it wasn't that robust. Like the answer can't be, "Well, I wanted to do it since I was a kid." That can't be my why. And that may be like the deeper motivation, but the reason the company deserves to exist has to be much bigger. - So constant refinement of your message, that's really important. - And a message is the manifestation of strategy. So it's like the refinement of the strategies. - Imagine setting your makeup, then forgetting, it's even theirs. Meet new grippy setting mist from Mavily New York. Gel to mist technology locks in your look for up to 24 hours with flexible all-day comfy grip. Try new grippy setting mist from Mavily New York. - Maybe it's Mavilyin. - So around 2018, Rivion secured major investments from companies like Ford and Amazon. I remember my colleagues talking about this at work. Amazon went on to place an order for 100,000 electric delivery vans. And it was reported that Jeff Bezos even flew to Michigan to come meet you and see the vehicles. You know, for a lot of founders, these are dream encounters, right? How did these really come about? And what do you remember about those conversations back then? - You know, something like Amazon investing and becoming a major partner. Those are, you know, that was even for Rivion. That was at, there was a time where that was our dream. Like we wanted to have Amazon investor. We saw them as a really great partner. The company's extremely mission oriented. And so when we look at the opportunity to have electrification have impact, we said, boy, the commercial space is really interesting. But of course, like proceeding all of that, there's lots of discussions and analysis internally to say like, can we deliver something that could be really compelling? And then now we, Amazon as the largest centrally managed electric fleet in the world, which is of course vehicles we built. In most cities now across the US, but certainly here in the very same everywhere. It was a great discussion with Jeff. He's a big supporter and a big advocate for what we're doing. - Yeah, a long time advocate now, it seems. - Yeah, it's been a while. - Yeah. And in November 2018, Rivion debuted the first two vehicles, the R1T and all electric pickup and the R1S and all electric SUV. How did you pick these two models to enter the market? What specifically, what gap were you looking to fill? - If you're launching a new company that's consumer focused, one of the most important questions you need to ask yourself, is like, what's the launch product? What's the, what do we introduce the company with? You're sort of handshake with the world, so to speak. And so that question was something we spent a lot of time on and iterated on heavily, well before that. So from the very beginning up through 2018, we were debating and iterating on that. The initial product planning like 2009, 2010 was actually start with a sports car which sounds so funny 'cause it's not at all what Rivion's brand became. But brands are really funny 'cause they're fabricated. You make up a brand, you create it. And so Rivion didn't, or Rivion was, at a point in time, the world of course didn't know where Rivion was. Even we in, let's say 2015, we're still figuring out what our values were, what our aesthetic was, what are the segments we're gonna focus on? What do we wanna enable in terms of consumer experience? And so we started to narrow in in that timeframe in that like 2014, 2015 timeframe. I started to get much sharper around this idea of both enabling people to go do the kinds of things they wanna take photographs of, the kinds of experiences you wanna remember for years, but more important than even the enabling, which is like functional, was the idea of inspiring people to go do the kinds of things You want to have it? memories are for years to come. And so when you sort of pull that apart, say, well, if it's a vehicle that's going to inspire and enable you to go do things you want to take photographs, however that means it's going to fit the things you care about, your friends, your family, your pets, your gear. And so when you then look at these like vehicles that are platforms for life, or platforms for adventure, the segments that most naturally map to that are the SUV and the truck segment, the vehicles that are designed to fit your life into them. And in many ways, they're the most ripe for a rethink. They're highly inefficient. They're tend to be vehicles that are fairly narrow focused in terms of capability. So they're like capable, fitting a lot of stuff. Maybe they can go off road, but they're not like refined. And so the question we started pulling out was, can we make the most efficient truck rush V that's incredibly fun to drive on road? That's the best vehicle in the world off road that is something that you can drive every day that fits all your gear that's family-friendly. That looks good. That looks great and capable, but not intimidating. So like our launch vehicle, the launch vehicle, it's over 800 horsepower. How do you make an 800 horsepower look capable, but not scary? And so that was the idea launch with a flagship, so launch with our highest end product, and then following that launch with our mass market products. And so the strategy was flagship first, which was this sibling set, the R1T, the truck, and the R1S, the SUV, which fortunately really connected with the market. So the R1 is now the best-selling premium electric car sold in the United States by a pretty significant degree, so it's by far the market share leader. I saw it not actually. Yeah, which is really cool. But the size of the market for 90-ish-thousand-lar vehicles is fairly small. And so that's where our mass market product comes in, which we're about to launch, which we call R2, quite creatively. And then there's a sibling product to R2, which we call R3. And so R2 and R3 are like the much higher volume, much more mass market products, but they still have all the essence of the brand embedded in them in terms of both enabling and inspiring adventure. And they still feel and drive like Rivians, and they're just amazing. The R2, which you know, is about to start deliveries, it's just incredible the vehicle. It's the best thing that Rivian has ever developed. It's very good. And so we're just starting, we just had a first batch of reviewers seeing all the positive feedback was really encouraging, so it's been many years of time in the making. And many learnings, like R1 was something we learned a lot from to be able to apply all those learnings into a completely new architecture. With R2 was really, I mean, it's just so much fun. Yeah, you probably were so excited to get that out there to the world. Finally, right? Well, I wasn't going to ask till later, but since we're on it, let's talk about the R2, because it's a big year for Rivian on a number of different fronts, but obviously with the R2 launching this spring, I heard you spend a lot of time in a normal Illinois working on this. And you know, the R2 and the R3 are really seen as potential game changers for Rivian and the EV industry as a whole. What can you share so far about how plans for the whole wider rollout are going? And can you talk a little bit about how this is significant, not just in terms of, you know, the sales that you anticipate, but in advancing your longer term mission? Yeah, well, it's helpful just to ground this in context for the auto industry. So in the United States, and this is actually true in most of most of the West. So in Europe as well, the most popular segment is a five-past SUV. So in the US that represents about half of the demand for vehicles in our market. So five-pasture two-row SUV or crossover. And the average price of a new car in the United States is just over $50,000. And in the US market, it's about 15 to 16 million cars sold per year. So it's a very large market, Europe's similar size. And in developing R2, we wanted to hit right into that market and deploy products in our brand in a way that was really exciting and new and fresh. And so R2 is a five-pasture SUV. It's remarkable in terms of its capability off-road, capability on-road, everyday usability. So it'd call it like 45 to our top spec is just over 57. And it's something that has this like very broad mass market appeal. And the reason we think that's important, for everything, of course, is going to grow our volume dramatically. It's an order of magnitude increase in our revenue and our volume as business. But it also introduces to the market, I think, for the first time. Another choice of a highly compelling product in this price range we're today, and you really have like one highly compelling choice, which is the Tesla Model Y, which is a great vehicle, but in order to see electrification scale beyond today, it's like seven or eight percent market share. We need to have a lot of choices. And so today, the market's highly concentrated, you know, around 60% market shares with the Tesla Model 3 Model Y. And so it's just like the market needs choice. And so in the internal combustion world, you have hundreds of choices. And there's so few great choices at affordable prices, at these like 50,000 dollar price points, that I'm excited just around what are two represents to help expand electrification. And for folks that maybe haven't had a form factor that fits their needs, or haven't had a design that connects with what they're looking for, there's now a choice that's different. And that ultimately, if we do want and believe electrification needs to happen, it requires choice, it requires, and I think, you know, R2 is a choice, R3 is another choice, you can imagine, it's going to be R4. So a Rivian is going to do everything we can do to continue to create more choice. But we hope it inspires other companies to help, you know, create some choices. Yeah. So that's your contribution, obviously. You're so excited to get out there and put it out there. And the R2 could essentially turn Rivian into a volume manufacturer to your point earlier, as you ramp up production to, you know, turn these out at scale, what challenges have you been encountering, or do you anticipate ahead? Are there specific manufacturing or supply chain hurdles unique to this process that you're, you know, obviously, spending a lot of time on cars, it's complex. So again, just to ground this, when you see a vehicle, you see like the finished surface, and even for me when I was growing up, you'd think, you know, it's a small team of people put this together, but to develop a car, there's tens of millions of decisions, necessary engineering decisions and design decisions to execute a product. In order to do it in a reasonable time frame, meaning, you know, in a couple of years to go from scratch to a complete car, you have many thousands of people working in parallel. It's the only way to, you know, in theory, you could do it with one person, but it would take you, you know, many, many tens of thousands of years to do, and which obviously it's not practical. So, so the way we solve these really complex engineering problems, you have, in the case with vehicle, maybe five or six thousand people working in parallel. And the reason that's important to note is that because there's so many people involved in the program, a huge part of the effort is coordinating how decisions are made. So you want the front of the car and the, you know, let's say the front trunk to feel like it was engineered by the same brain, the same persons, the rear seat mechanism, of course, they're not the same people, they're not in the same teams. You want that team to be connected, a team that's doing the driving and it to be doing the software. And so you create frameworks for how you make decisions. And the success of these highly, of any highly complex product, like a car, I think is ultimately a measure of how coordinated the teams are so that the decisioning feels consistent, so that it feels like like a very small group of people did it. That's what you want it to present is where it looks like ten people designed this whole thing when, in fact, maybe five thousand people worked on it. When you think about the number of decisions and the number of engineering trade-offs and sort of analyses are necessary to complete the product, there's all types of development things they can go wrong. And so that's why we go through multiple iterations of prototypes and testing to build hundreds of cars on the journey to the first sale of a unit. That's largely controllable by us, meaning we have visibility to the health and status across thousands of different metrics on developing the product. But then there's all the suppliers that make components. So we make a lot of components ourselves, but take, let's say, a headlight. We design the headlight, we design the lighting and the headlight, we do all the studies of how it's going to look, how it's going to behave, the control systems for architecture, and how it's using headlight from intelligent, but a third party, a supplier makes it. And so you think there's a tier one supplier, but that supplier has suppliers, it has two suppliers, and that tier two supplier has suppliers, and those are two or three, and those two or three suppliers have suppliers. So when you look at the number of companies that are ultimately involved in making an R2, it's tens of thousands of companies. And we have maybe four, about 450 direct companies that we work with, like that are R2 or one suppliers. They all have anywhere from a handful to maybe 10 plus suppliers that feed them. Those have a handful to 10 plus. So just like really quickly becomes a huge number of companies involved. And in stable supply chain environments, that's all right. So you don't have to spend time getting to know the mind that your raw material is coming out of, but in environments where the supply chain has lots of disruptions, suddenly you have to think about who's my tier four. And who did the tier four foods of tier three, the foods of tier three, the foods of tier three, the foods of tier one that feeds us. We experienced that first time when we launched our one. There were so many disruptions to supply jam with COVID that we had to get very skilled at understanding risk across all of our different tiers of supply. It's quite complex. And so the biggest risk with any program of this type is that you can't predict and you can't actually measure everything happening at every one of your suppliers. And this falls into like big geopolitical challenges. So take a battery battery. Our batteries have nickel in them. 93% of the world's nickel comes from one country comes from Indonesia. Trade policy with Indonesia could have a dramatic impact on our ability to get nickel. And that's just one material in a battery. So they just extrapolate that out. There's a very large team that tracks these things. And we had to learn all those skills. Those are skills you don't you're starting a company think I'm going to design an engineer. You don't think I'm going to build a team where we have mining expertise. And we have you know shipping logistics expertise. And we have people that are tracking shipping patterns in the ocean and seeing what's being disrupted by conflicts. I mean, there's the amount of complexity that manage all that's quite high. And now we have all those capabilities built in. But I'd say that's the that's the biggest risk is just supply chain disruption. Yeah, I can imagine that this is where you spend a lot of time. And it almost sounds like a big command center, you know, like lots of different experts looking out and keeping tabs on whatever it is they're responsible for because the complexity is enormous. Yeah, I think, you know, globally we often talk. I think in it's sort of easier to think about. If you think about like supply chains as like this coffee cup, they're quite simple. I think there's maybe just probably one company that does everything on this coffee cup. Right. Maybe two or three if you look at the raw materials, but developing complex products to supply chains are not just dealing with coffee cups, which is really complex supply chains. And so they're just very multifaceted and they they do require and require you to be like awake at all hours kind of thing. Imagine setting your makeup then forgetting it's even theirs. Meet new grippy setting mist from Mabelie, New York. Delta mist technology locks in your look for up to 24 hours with flexible all day comfy grip. No tightness, no stickiness, no residue, just plump, dewy hydrated skin that still feels like your skin. Try new grippy setting mist from Mabelie, New York. Maybe it's Mabelie. Well, you know, it's funny that you talk about the geopolitics because I think you can't really have a conversation about business in this day and age without discussing the political climate currently, you know, just briefly and I'm sure you've been asked this a lot. Obviously with EVs, it's an interesting time to be in the space, let's say, right? Because we saw kind of the rollback of the federal EB tax credits and to your point, there's a lot of going on with trade tensions and whatnot. How do you think about that? And, you know, has it changed the landscape for the industry fundamentally? Do you think, or do you think that, you know, Rivian is really just writing this out right now? It's short term. Who knows what could happen? Hmm, that's a good question. I don't think, I think of it long term, like in the fullness of time, all the policy changes aren't going to change the end state, which is the world's electrifying. Nearly every car, new car produced in the not too distant future. We could debate whether it's five years, 10 years, 20 years away, but certainly in my lifetime, every car produced on the planet, new car will be electric. And so then the question is, like, what's the journey to get there? And if we believe that's what the end state will look like, what, like, what are the, what's the rate at which it gets there? And I think the change in policy, the biggest impact I've seen is just how much it's affecting other companies. And so the number of large existing manufacturers that have pulled back pretty rapidly from electrification. In many ways, it underscores or underlines the importance of, of Rivian and, and a small number of other companies that remain focused on electrification, creating choice. So from like a, if you're looking to from like a competitive landscape point of view, there's a lot, there's going to be a lot less competition. If you look at it from a health of the auto industry or from, I characterize like the, from my kids, kids, kids perspective in terms of the health of our planet or the health of the Western auto industry, I think it's really like, it's actually dangerous. And we need, we need more companies like Rivian or more companies like Tesla that are building electric vehicles, highly compelling, highly desirable. We hope that the example we set with R2 and we hope that its success will, will stir up more competition to have more people coming into this base. And interesting you point out, you know, I understand you often say the reason you started the company is, it's for our kids, kids, kids. It's the age old question, but, you know, how did becoming a public company chief change the way that you lead RJ, especially when it comes to balancing Wall Street short term expectations with delivering on that long term vision. I mean, this is something I feel like people constantly battle. I think many founders, they start a business, I'm in this category where your time scale that you're thinking about extends way beyond a quarter and even way beyond the fiscal here. And so you have a different mental model for making trade offs. That's certainly true for me. A friend of mine once said, give me the advice of be comfortable being misunderstood for a while. And so what he was, what he was speaking to is we're investing heavily into technology, we're very vertically integrated. We design all of our electronics and house. We build all of our software and house. We put all of our power electronics and high voltage systems in house. It's a do that. We're in a very large engineering team. And they're for have a very large op-ax. We're on the budget for it. And the reason we're doing that is because we're planning to become a very large company, meaning we expect to build many millions of units a year, but we're not yet. But in order to become a company, it's building many millions of units a year. You need to have those technologies and to be world-class in those areas. And so as a result, our business, like the revenue doesn't isn't keeping up with our op-ax. And it will soon. It's not like this is an accident. This is highly planned. We like very intentionally said we're going to raise a lot of money. We're going to deploy a lot of capital building all the infrastructure to this highly vertical integrated business from a technology point of view. And from a customer point of view, meaning we own sales, service, distribution, all these go-to-market functions, which in the beginning are these structural cost disadvantages because you have really high fixed cost and you don't have a lot of volume to cover it. But as soon as we get to a certain level of volume, it all starts to really make sense. And so that for us is all embodied in R2. As a company, they're managing public markets. There are times in the public markets where there's a lot of growth investment and there are times in public markets where there's much more focus on short term profitability. Rivian went public at a time when we were coming off the back of a lot of focus on growth. We then entered into a period of time where everything's been focused on much more short term profitability. We didn't let that change our strategy. We didn't say, okay, cancel all of our technology programs. We are focused on still building a very large company. And so I have to make, we have to like explain that to public shareholders is sometimes don't fully appreciate the breadth of what we're building or the scale we're attempting to build. But that's okay. Like if you sort of have, you go into building a car company and being public car company knowing you're going to be a little misunderstood for a while. You're going to have deep convictions on things on everybody's going to share those convictions. I think that's a skill. A lot of entrepreneurs pick up. It's certainly something I've learned and like I'm very comfortable with lots of people disagreeing with me. Like if you're someone that is uncomfortable with people telling your ideas are wrong, being an entrepreneur is really hard. But if you're okay with people saying, I don't agree with you and saying, well, that's okay. You don't have to agree with me. That's sort of what you need when you're building large complex businesses. Yeah. You're able to shrug it off. And it sounds like that's changing by the way with the profitability because obviously I did see your most recent earnings report. You guys had a great day with a stock there. I'm sure you were. It was a good day. Of course, we have to be a profitable business. That's like, I say this is a smile. We have to make money so they can self fund our significant growth. But there's the reality of to get to that point and to get to that point where we're designing for scale, there's a certain level of investment that we've had to make in the business. Is there a timetable just briefly because I want to get to some of the other investments you've talked about? Is there a timetable you have in mind when it comes to that kind of, you know, steady profitability going forward because obviously you are still heavy in a lot of investments right now. I think the balance is always balancing growth with profitability. And today we're obviously focused on growth on a journey to get to profitability. Given the scale of the business and with like the mass market nature of R2 and R3, that tradeoff becomes much less challenging, meaning we start to generate enough revenue that even with the growth mindset investing in tech and heavy investment in technology, the revenue offsets all that off-backs and generates, you know, positive free cash flow. And that's like getting to this skate velocity. I think every, especially every hardware business thinks about this and plans for this. So we're like hyper focused on it. And obviously the R2 is meant to unlock that further. I mean, that's a huge, that's part of the. The Reveeans business ball, it doesn't work without R2. Like if we, if there was no R2, we couldn't look the way we look we couldn't have such a large engineering team we couldn't have such heavy engineering budget. I want to get your take on AI because in December Rivian announced it had developed its very own AI chip something extremely rare for an automaker. I know you were very excited to unveil this. Why take this on though given the complexity required? It sounds like you had your hands full already first of all but you know obviously I'm mindful of the fact that in recent years a chip shortage exposed how fragile the supply chain can be to your point earlier. Is this a hedge against that or how much of this is about reducing your own reliance on companies like Nvidia versus a bid to compete more broadly in the AI compute space? Well you're developing an in-house inference platform. It's not like something you wake up on a Sunday and so let's go do this and like it's done at a week. It's a it's a big commitment and it's you know many many hundreds of millions of dollars of time over over years. You have to build a team there's lots of iteration you have to build a development environment around it so it's it's a it's a highly contemplated decision. The decision for us to bring our inference platform in-house which you'll be announced is it's a very high performance chip so it's a 800 tops chip. We put two of them into a vehicle for 16 hours sparse sparse tops so you know double that for if you're talking about then stops that joins operations per second. The chip itself can process 5 billion pixels per second so it's extremely high performance since optimized around vision based robotics and so the that decision to do that was because we felt the most expensive part of a self-driving system which a surprising is it doesn't get enough attention. It's not actually the perception we often talk about like cameras and radar and light are the different perception. All those elements have become fairly cost effective. It's actually in the brain and so we want to have a very cost effective way to integrate very high levels of self-driving because we have very high levels of compute built into the vehicle and it's built around a deeper thesis that we have that the biggest shift to transportation as big as electrification may seem it's not actually electrification it's it's the shifts to vehicles being able to drive themselves. We're at like the very beginning of this so in terms of consumer vehicles today there's what's called level two system so it's where the vehicle you know they're gonna test the FSD it can drive itself but she still are paying attention to the road. AWAMO is a level four it can drive itself empty it doesn't need a person in driver's seat but our view is that over the next few years we're gonna see everything like every type of vehicle whether it's owned or robotaxi becomes something that should have level four kit building meaning can you drive itself empty now whether that's in two years or three years or four years you can debate but certainly in the very near future and so as you look at the remainder of this decade we think consumer confidence and self-driving is gonna grow a lot as they start to get exposure to early examples of things like AWAMO but by the time we get to 2030-2031 there's two ways to look at this not having very high levels of capability in terms of self-driving will dramatically reduce market share and the inverse that is true if you are among the small number of companies that have that capability you can greatly expand market share or you could sell the technology you could do one of those two things be sure it's it's something that's could be monetized to a few different pattern paths and so we made the decision to say that's so important if we believe if we're convicted to being in the transportation space we must have deep conviction here it's a necessary element how this the space evolves and so we invested heavily in it so we built you know if you think of to do self-driving if there's a lot of ingredients so we when we launched in 2021 we had a fairly off-the-shelf system we used a mobile-eye front camera we launched in 2024 an in-house system it's still used in a video processor and but it was part of a broader effort to bring all of this in-house since we have perceptions in-house sorry camera platform in-house the compute with our in-house processor comes in-house with R2 and then the model which is trained very different than how they've historically been built but now it's built much more on like a neural net type architecture it's a trained end-to-end it's it's a lot of it's inspired from the transformed-based encoding that we've seen be deployed in LLM so it's very different solid building the model that's how far it's out of this and we're wildly bullish on what will happen with this over the next video imagine setting your makeup then forgetting it's even theirs meet new grippy setting mist from mabily new york gel to mist technology locks in your look for up to 24 hours with flexible all-day comfy grip no tightness no stickiness no residue just clump to a hydrated skin that still feels like your skin try new grippy setting mist from mabily new york maybe it's mabling years it's the goal here to license or sell that out to other automakers or transportation providers long-term and you know obviously continue to grow beyond the traditional OEM I would say it's it's one of the major pathways to monetize to like have this make money but I think the answer we have to recognize well there's a there's a deeply help belief we have which is in time if you're a vehicle manufacturer you want to maintain market share we think it's a must-have that you have these two things the first is the vehicle needs a completely different software and electronic architecture than what is historically been in cars it's going from a world where and this is true for every company the exception of Tesla and Rivian cars have you know many many ECU so depending on the vehicle call it anywhere from 75 to 150 what's called electronic control units little mini computers that run little islands of software that are supplied by suppliers and all these ECUs are plugged together to this part of a network architecture to essentially an aggregate deliver the software features in the vehicle we can spend a lot of time this but it's his for historical reasons it grew out of the first ECU as a social fuel injection and over time like a field of weeds all these ECU started popping up as features within the vehicle started to become software defined as I said like a field of weeds it's it's almost the precise opposite of of what you would design if you're like architecting a system and if you're architecting a system you'd design what what you see in a Rivian which is a very small number of computers that do all the thinking in the vehicle so more of the centralized computer zonal architecture and so the reason that's so important is you don't want to have your software distributed across a hundred different companies on the hundred different little islands of code you want to have one software bait a code base that you can do updates to and add features to and so today what you see in all the sort of legacy vehicles is this this system of many many ECUs and they're very hard to make software updates you can do it but it's like brute forces there is you don't see a lot of over the your updates outside of a of a Rivian or a Tesla and so our view is that architecture is hard today it's impossible in a world where you're imagining an AI enabled vehicle and so I think every car if it wants to maintain market show we'll have to shift to this software to find architecture so that's piece number one but that's not necessarily binary you you can brute force your ways as I said for a bit but then eventually it just becomes so archaic that it's hard to hire people to work in these development environments it's very hard that's number one second thing is it's inconceivable to us that you'll be able to maintain market share without high levels of autonomy when we get into that call it post slate 2020s early 2030s time frame and that will become also increasingly true and so the reason I say all that is if we believe those two things to be true every car company in the world has three choices the first choices they could decide to ignore that and shrink so they could lose market share which is a choice they may not explicitly make but they may implicitly make by just their actions but it is it's important to note that that is a choice they could decide to develop those technologies in house that's very hard because for most car companies these are not skill sets that are embedded within the businesses the way many car companies grew up they just grew up differently they grew up as tech companies or software companies so they don't have a lot of you know internal expertise around designing electronics designing software designing AI systems or third they could go buy it from a third party our view is most companies are falling to the latter two categories they'll try to do with themselves or they'll realize they don't have those capabilities and it would take too long to do all those and they'll decide to buy it and so we think there's pretty interesting business on both the software architecture so the software defined element of the vehicle and then self-driving ultimately is going to be something we think most car companies are in need to buy and so that's a path to monetize those technologies the other path of course is just market share selling more vehicles and so we're going to pursue both and so we did a deal with the Volkswagen last year on the on the software defined aspect we did a 5.28 billion dollar software licensing deal to provide the ECUs and the software architecture and software platform for Volkswagen Group products it's like Audi VW there's a bunch of brands and I think that's a very good example of an automaker that could use your expertise by the way and no shade to them I'm just saying I think that it's a great pump of the sector excuse me second largest car company in the world all the outstanding set of brands, but it's are really interesting partnership for us. We're able to deploy, really at scale, our technology across different form factors, different price points, different markets. - Another venture I recently learned about is Mind Robotics, a new company that you started last year. First off, genuinely, how the heck did you find time to do this? And second, tell us how this kind of came together and your strategic vision here. - We just talked a lot about AI. Vehicle autonomy is one form of AI in the physical world. We for a while have been convicted on AI manifesting in the physical world in many ways, but Industrial Robotics is another big, enormous opportunity. And I live this, you know, every day with Ruby and we have a plant that employs lots of people to build our vehicles. And as we're thinking about scaling, there are real constraints on how many people are available to work in these plants. And I think a real opportunity to take a lot of these, task a lot of these jobs that are highly repetitive and can be quite challenging and develop highly dexterous robotics that have reasoning capabilities. And so making a very long story short, we've been looking at this for a while. And last year, as you said, I started another company and took a little bit of time for myself along with Rivian's board to figure out how to structure that because I'm the CEO and chairman of Rivian and I intend to stay the CEO and chairman of Rivian. And I wanted to start and run this other company. Where it stands today is it's like enormously exciting. It's really at the, I think we're at a point in time where we're about to see robotics in many different parts of the world and many different applications. But we think one of the biggest applications is Industrial robots that are specifically designed to do manufacturing and to do human-like skills in manufacturing. Well, so I previously covered business and tech out of Asia Pacific. And we've seen a lot more of that as well over there, I think, especially with some of the factory applications and whatnot. I'm curious if you're taking any learnings from other regions as you continue to build out this new venture. When we think about robotics and manufacturing, you can Google it and immediately see every car company in the world, every scale manufacturer, Rivian included, is using a lot of robotics as it is today. But these are very simple PLC-controlled six-axis robots that are doing fixed-motion plan with very specific end effectors. So they're not generalized robots. They're not doing human-like skills. They can do things very fast and very repetitively. But when you introduce variation or when you introduce human decisioning, it's where that type of robot really doesn't work well. And so the concept of doing robots that have human-like capabilities or even human-like form factors is something that's been around for a while. But it hasn't been really until recently that the ability to create a brain for these-- a model for these to operate with-- has really facilitated the realistic deployment of these at scale. And so it's something we've been watching very closely. And the way we're now creating these VLA models and these world models to describe how to behave in a plant with the benefit of lots of data feeding them is enormously exciting, but it's very new. This is like not something that was around more than a couple of years ago. And I think precisely because of that, it's what gives me so much confidence that this is like very realistic to deploy at scale. Rivian is a great first customer. By virtue of Rivian being a shareholder in mind as a customer, it allows mine to focus on a scale deployment as opposed to demos. And a lot of the robotics world for a while has been in this loop of lots of demos and lots of proof-of-concepts. But not like, how do we deploy 100 robots? How do we deploy 1,000 robots? Lots of trade shows and whatnot. So we're very focused on execution? Yeah, that your building robots will perform real tasks, real plants at real scale. What's like one example of that? What's something you really just want them to be able to get up and do? So like hard tasks are things like routing a wiring harness and plugging it in. Easy tasks of which there's millions and millions of these types of tasks across manufacturing globally is something called pick and place. Taking a part, let's say in a box that's unsorted, like a box of parts and placing it into, say, a shortage shelf or into a fixture. And so it doesn't require enormous dexterity or manipulation. So it's a relatively straightforward task, but it's one for which there's enough variation in the process that classical automation doesn't work for it. It's where we see lots of humans doing this type of work. Highly repetitive. In some cases, it can be quite tiresome or cumbersome. And so this is one of the very immediate things we can address with mind. But when I think of the capable of mind, it's not going to end at pick and place. It's going to include every type of manufacturing. So dealing with objects that can be manipulated. So these are like soft goods, carpet, headliners, wiring harnesses, dealing with connectors that have force feedback when you plug them together. These are a lot of the skills we're both training against and then ultimately building the dexterity and the mechatronics to deliver on those tasks. And zooming out, Arjay, what is your end game here? Because you have your hands in so many different things. I'm just curious if we were to sit back down again and let's say 15, 20 years, where would you really want to be? You think of the set of companies. So Riven is obviously working very hard to help advance smart, connected, increasingly autonomous vehicles. And very soon, our view is that a modern vehicle should just be capable of driving itself. So it should be capable of going to the grocery store, picking up your stuff, dropping you at the airport. And we think that'll be, of course, in robot axes, but importantly, in just a car you own. Your car you own can be running tasks for you. And we're developing the technology to be operating at scale, producing many millions of units a year for that. To help on that journey, mind was created to build the robotics to allow us to get the cost structure of these reduced dramatically. And so if you look at the labor content that exists in a vehicle, not just in the vehicle assembly plant, but across its supply chain, it's quite high. And so allowing us to build really compelling products at a much, much lower price point is something that minds working towards. And in mind, of course, is designed to support all types of manufacturing. So building cars, microwave, soft goods, clothing, everything we see is the surface area that we were working to address with mind in manufacturing. And then there's a micro-embelling company that was a spin-out from Rivian. And my goal there, the name of the company is also. And the name is sort of captures what its purpose is. And really it's both on this idea that Rivian is working very hard to electrify and create incredible products in the vehicle space. But we also need to rethink and electrify everything else. And so it's the name also is working on everything else. So that's all these different form factors that are smaller than a car in many parts of the world are primary modes of transportation. In the US, we're so used to it, but our primary mode of accessing personal transportation is a car. So there's over 700 cars per 1,000 people. That's 2 or 3 orders of magnitude, more car ownership per person than what you have in most countries. In most countries, you're using two wheelers or three wheelers to get around. In some cases, quadrucicles are four wheelers. Also is working to rethink that segment in a really meaningful way with both technology, connectivity, obviously electrification, and autonomy in these much smaller form factors. So stay tuned. That's an exciting one. I'm eager to see what you do with that. Thank you so much, RJ. Now we're going to wrap with a quick rapid fire. All right. OK, don't over think and just say whatever comes to mind. Ready? Go to playlist in the car. Go to playlist. I feel like electronic music. Oh, interesting. Thanks. Peaceful. I would have, like, picked your, like, a country music star for you. OK. Oh, Tesla or Toyota? Who keeps you up at night as a competitor? I wouldn't say I-- a classic line of focus on what you're executing, not looking to your left or your right. Favorite way to unwind after a long day? Usually reading, reading something, reading articles, or-- What do you like to ask when you're hiring? Usually tie it to whatever the role is to a specific example, challenge your problem to see how one would, like, construct putting that together or solving it. One piece of advice you come back too often. I'd say zoom out, like, take a step back and, like, look at the full system. I love the simplicity of that. RJ, thank you. I've enjoyed this. Thank you. Thanks for joining us on Behind the Business. For more stories on business and leadership, follow us on Apple Podcasts, Spotify, YouTube, or wherever you get your podcasts. See you next week. [MUSIC PLAYING] Imagine setting your makeup. Then, forgetting it's even theirs. Just plump, dewy, hydrated skin. That still feels like your skin. Maybe it's Maybelline. [BLANK_AUDIO]