Carmakers that continue to prioritise petrol and hybrid vehicles over electric technology risk finding themselves “woefully behind” by the end of the decade, according to RJ Scaringe, founder and chief executive of Rivian. The Amazon-backed US electric vehicle manufacturer’s boss said the industry has reached a “fork in the road” between short-term profits and the heavy investments – particularly in software – that will be needed to survive.
Industry at a fork in the road
Scaringe said many manufacturers have chosen the profitable path, ramping up production of petrol and hybrid pickup trucks and SUVs in the US and Europe while lobbying to slow the transition to electric vehicles. The retreat has been particularly striking in the United States, where the Trump administration has gutted incentives to produce and buy EVs, terminated the $7,500 federal tax credit for electric cars, and signalled a “free-market approach” that includes potentially revoking California’s stricter emissions standards. Consumer demand has been further hit by concerns over cost, charging infrastructure, battery range and manufacturing issues.
The shifting policy landscape and tepid demand have forced major carmakers to write down billions from their previous EV investments. General Motors announced a $6bn charge in late 2025, including $4.2bn in cash payments to suppliers and $1.8bn in non-cash impairments, on top of a $1.6bn charge in the third quarter of that year. Stellantis recorded a €22.2bn ($26.2bn) write-down in early 2026, driven by a strategic retreat from ambitious electrification targets. Ford has taken roughly $19bn in charges related to its EV reset, and Volkswagen has also booked significant write-downs. US electric vehicle market share fell to 5.7% of all new car sales in the final quarter of 2025, down from 8.7% a year earlier, as the federal tax credit expired in September.
Scaringe warned that the decisions to focus on profitable petrol cars could come back to haunt manufacturers. “That looks really good financially for 2026, 2027, maybe even 2028,” he said. “But as you get to the end of the 2020s and into the 2030s, I think we’re going to find a lot of companies are unfortunately woefully behind in terms of their technology.”
Software is the real prize
Scaringe argued that the “more damaging and more dangerous aspect” of the turn against EVs is not the delayed transition from petrol engines to batteries but the failure to develop the software that increasingly controls every aspect of the vehicle. He said petrol cars are stuck with a design that scatters computer chips throughout the vehicle – from the engine to the seats and wing mirrors – rather than a centralised architecture that can be easily modified. Relying on a single computer instead reduces production costs by “thousands of dollars”, according to Scaringe.
Rivian has invested heavily in digital technology and software, and that bet is already paying off. The company’s software and services segment more than doubled its revenue in 2025, rising to $1.56bn from $484m the previous year, while gross profit from that division surged from $7m to $576m. A key driver was the $5.8bn electric technology and software joint venture agreed with Germany’s Volkswagen Group in 2024, which helped boost the software segment’s performance. Further validation came in March 2026, when Uber announced an investment of up to $1.25bn in Rivian to deploy up to 50,000 R2 SUVs as robotaxis. The deal includes an initial purchase of 10,000 vehicles, with options for 40,000 more, and initial deployments are slated for San Francisco and Miami in 2028, expanding to 25 cities by 2031.
Rivian’s financial position has improved as a result. The company reported its first annual gross profit in 2025 – $144m, compared with a $1.2bn gross loss in 2024 – driven by the software and services performance, higher average selling prices, and cost reductions per vehicle. Full-year consolidated revenue rose 8% to $5.387bn, although automotive revenue fell 15% to $3.83bn partly due to lower regulatory credit sales and fewer vehicle deliveries. The net loss narrowed to $3.626bn from $4.746bn. In the first quarter of 2026, Rivian posted $1.381bn in revenue, an 11% year-over-year increase, and $119m in consolidated gross profit, while recording a net loss of $416m.
The company is now pinning its hopes on the R2 SUV, which began production in Normal, Illinois, in early 2026, with first customer deliveries in the US on June 9. Scaringe described the model as “make or break” as Rivian tries to turn a profit for the first time. The company expects to deliver between 62,000 and 67,000 vehicles in 2026, with an adjusted EBITDA loss of $1.8bn to $2.1bn and capital expenditure of $1.95bn to $2.05bn. Rivian ended the first quarter of 2026 with $4.83bn in cash, cash equivalents and short-term investments, and expects the first advance on a $4.5bn Department of Energy loan for its Georgia facility in early 2027.
Despite the backlash against EVs in Washington, Scaringe believes Rivian can help increase take-up in the US. Electric cars accounted for 7.8% of all US car sales in 2025, and he said the R2 alone could eventually add three or four percentage points to that share. “The objective is to be a very large company” with annual sales in the millions, he said. He was sceptical of carmakers’ claims that buyers do not want EVs, arguing instead that the dominance of Tesla’s Model 3 saloon and Model Y SUV in the US is “a sign of a market starved for great choices”. Chinese carmakers dominate the global EV industry but are locked out of the US by prohibitive tariffs.
Rivian is also aiming to sell the R2 in the UK and mainland Europe, although a UK launch is not expected until around 2027 or 2028. The UK government has introduced a new Electric Car Grant offering £1,500 to £3,750 off eligible new electric cars priced at £37,000 or under, with the scheme expected to run until 2028-29. Grants are also available for home EV chargers, covering 75% of the cost up to £500, and fully electric cars benefit from lower vehicle excise duty, with first-year VED at £10.
