Rivian Automotive's stock surged 5.02% during intraday trading on Wednesday, following a series of positive announcements regarding its next-generation vehicle platform.

The electric vehicle maker announced it has started production of its smaller, more affordable R2 SUVs, with customer deliveries expected later this spring. The R2 is central to Rivian's growth strategy amid broader EV demand challenges and is expected to compete directly with Tesla's Model Y. According to company officials, once production reaches a higher run rate in 2027, the R2 will cost less than half as much to build as the R1 models, thanks to aggressive cost-saving measures including die castings, new drive units, and simplified suspension systems.

Further bolstering investor sentiment, Rivian's CEO confirmed the company still plans to introduce a $45,000 variant of the R2 line over the next year, and reassured markets that R2 production remains on track despite recent tornado damage to the company's Illinois factory. The R2 launch comes as Rivian expects to exit 2026 with positive automotive gross profit margins, supported by rising R2 output and lower costs across its vehicle lineup.