Fans of the automaker were excited about its new R2 model, but the high cost to lease it highlights the industry's struggles amid a rapidly shifting electric vehicle market.

Earlier this year, the Rivian R2 electric SUV was unveiled at an off-road driving venue in Austin.

Rivian's new R2 model has a starting lease payment of around $829 per month, disappointing many potential customers who had placed reservations.

Kevin King, a resident of Nashville, Tennessee, had been watching for years as Rivian Automotive, Inc. (RIVN, down 3.15%) built its reputation for rugged electric vehicles. He had hoped the brand's new, more affordable R2 SUV would finally be his ticket to ownership.

After putting down a deposit, one factor ultimately made him back out: a monthly lease payment exceeding $800. "I was really looking forward to getting an R2 this year," said Kevin King. "When I saw that lease price, I just couldn't justify it."

Last week, as the first R2 deliveries began, the official lease pricing was revealed. According to Rivian's website, the model's lease starts at approximately $829 per month, with higher-trim versions potentially exceeding $1,000, a cost many reservation holders have called unaffordable.

The California-based company has high hopes for the R2, viewing it as the vehicle that can transform the struggling EV startup into a mainstream, volume-selling automaker. When it announced a target starting price of around $45,000 two years ago, the vehicle generated significant excitement.

Rivian later stated the initial launch versions would be well-equipped higher-spec models priced around $58,000, with lower-priced variants to follow. However, the recently disclosed estimated lease payments have left many consumers feeling the cost is higher than anticipated.

Many reservation holders, including Kevin King, have taken to social media and forums like Reddit to express their disappointment, noting that the current R2 lease costs are approaching those of Rivian's premium models. Many say they plan to wait until next year for the promised $45,000 base model, or for the $54,000 version expected later this year, for which lease pricing has not yet been announced.

"Rivian's future product launches and expansion plans are heavily dependent on the R2's success," said Joseph Yoon, a consumer insights analyst at car review site Edmunds. "If the lease terms are not attractive, it could significantly hinder the company's progress."

Yoon had also considered the R2 for his next vehicle but changed his mind after seeing the lease quote.

Rivian's sales chief, Gary Gaines, noted that the R2 requires a lower down payment for leasing than the more expensive R1S: $3,500 versus $6,500. In the first few days of sales, about half of buyers chose to lease, which aligns with the company's expectations.

"The demand for the R2 as a new vehicle is very strong," Gaines said.

Rivian's EVs, which blend Apple-like minimalist tech with Patagonia-inspired outdoor styling and feature advanced driver-assistance and off-road capabilities, have historically targeted the premium market. Its previous models, the R1S and R1T, can exceed $90,000 or even $100,000 when fully optioned. Data from automotive intelligence firm Motor Intelligence shows sales of these two models fell 15% and 4% year-over-year in May, respectively.

Rivian aims to replicate the classic playbook of Tesla and traditional automakers: launch with higher-priced, well-equipped models first, then gradually expand the lineup with more affordable versions. The average price of a new vehicle in the U.S. is currently around $50,000.

The market performance of the R2 is critical for Rivian's trajectory. The automaker reported $5.4 billion in revenue last year from selling roughly 42,000 vehicles but has never posted an annual profit. The R2 was designed for profitability, being nearly 2,000 pounds lighter than the R1S with a simplified parts structure to reduce manufacturing costs.

Buoyed by optimism ahead of the R2 launch, Rivian's stock rose about 2% for the month and is up 6% since the vehicle went on sale last Tuesday.

However, the challenge exposed by the lease pricing reflects a broader industry reality: it is currently very difficult to launch a truly affordable and profitable electric vehicle in the U.S. market.

Monthly lease payments are influenced by multiple factors, including the vehicle's projected residual value at the end of the lease, the down payment, the lessee's credit score, and market interest rates. In recent years, leasing had been one of the most economical ways to get a new EV in the U.S.

During the Biden administration, the Inflation Reduction Act provided a $7,500 federal tax credit for nearly all leased EVs. Coupled with automakers' aggressive push for electrification, this led to ultra-low monthly payment deals, with some models leasing for under $200.

However, last year's policy changes under the Trump administration, which eliminated the EV tax credit and rolled back fuel-economy rules promoting electrification, have reduced automakers' incentive to sell EVs at a loss. Ultra-cheap EV leases have largely disappeared, with several automakers canceling some EV programs or delaying development plans.

Edmunds data shows that 45% of EVs sold in the U.S. this year were leased, compared to 69% in 2025 before the tax credit expired.

Despite the cooler industry climate, Rivian is pushing ahead with its EV plans, including a second assembly plant in Georgia scheduled to open in 2028. The company believes the R2's strong hardware specifications could win over customers who weren't previously considering a purchase.

The currently available version of the R2 offers up to 330 miles of range and accelerates from 0 to 60 mph in 3.6 seconds, rivaling the performance of many more expensive luxury vehicles.

Professional reviews of the R2 have been overwhelmingly positive, with MotorTrend magazine stating that Rivian has built another vehicle with almost no flaws.

The high lease price has not deterred all loyal fans. Brian Reese, CEO of aftermarket parts company EV Sportline, secured an R2 reservation the moment orders opened online in March 2024 and test-drove the vehicle two months ago.

"My initial takeaway was that this mid-market SUV far exceeded my expectations for value," he said. "I thought the interior might feel stripped down, but it absolutely does not. The interior quality is fantastic."