Rivian Founder and CEO RJ Scaringe said he still travels to suppliers in Mexico “more often than you’d think” to keep pressure on parts makers, describing a supply chain of thousands of companies that he says sets the pace of the EV maker’s R2 ramp.
“Hardware’s hard in ways that I think people don’t fully always appreciate until you’re in it,” Scaringe said in a conversation published by venture capital firm Kleiner Perkins on Monday, alongside Vidya Rajagopalan, Rivian’s Senior Vice President of Electrical Hardware.
On Rivian’s third-quarter earnings call on October 29, Scaringe said the company had taken “an aggressive approach of reducing our supply chain complexity to have a smaller set of Tier 1 suppliers” for the R2. “And so we can only ramp as fast as our slowest ramping supplier,” he said.
He added that this did not mean “an acute challenge with a single supplier,” but that each supplier has to ramp in a coordinated way. He used similar words in July and in September.
Rajagopalan said in the same conversation that the data center boom has made the E-glass used in printed circuit boards “really hard to find.”
Kleiner Perkins led a $400 million funding round in May for Mind Robotics, the robotics company Scaringe founded.
Thousands of Companies
Scaringe contrasted a simple product with a vehicle. “On something like a car, you have thousands of companies that are involved,” he said, with hundreds at the Tier 1 level supplying Rivian directly and each of those relying on suppliers of its own.
“We had to grow through this and learn through this with our first product in 2021 and 2022,” he said, when Rivian launched the R1 during the pandemic.
He said the company keeps getting better at running the chain but that it needs constant focus. Even with its processes and tools, he said, “we still find ourselves” visiting suppliers in Mexico “more often than you’d think to keep the pressure on” and to find the root cause of problems.
The source “may be a tier two or even a tier three,” he said.
That matches what he told Morgan Stanley’s Laguna Conference in September. “It’s often not the Tier 1s,” he said then. “It’s the Tier 2s and Tier 3s that can be the most challenging.”
He put the count at several hundred direct suppliers, each with about 10 of their own and each of those with five to 10 more. He also said Rivian knew which supplier was slowest and had staff on site.
Chief Operating Officer Javier Varela made the same point on the October call. “Bringing up hundreds of suppliers” along with “their Tier 2 and the Tier 3 is an immense task,” he said, adding that Rivian has special teams to help suppliers scale.
Components
Both executives said components once bought without much thought now take planning.
“Three years ago, we were not spending a lot of time thinking about memory. It was a commodity,” Scaringe said. Now, he said, “an enormous amount of time goes into planning for memory,” into optimizing its use at the circuit board level, “and then really thinking strategically about how we source it.”
He said in October that rising memory prices were adding “many hundreds of dollars” to the cost of each vehicle, and called the supply chain “by far” the biggest challenge in the R2 ramp.
Rajagopalan added a second example, multilayer ceramic capacitors, known as MLCCs. “You never thought about them. You’re thinking about them now,” she said.
The E-glass shortage was her third example, and the one she tied directly to data centers. “You could have a component shortage in one space that totally throws you off,” she said. She called supply chain shortages the “bane of our existence.”
Hardware leaves little room to recover, she said, because a physical part cannot be patched the way software is fixed with an over-the-air update. Every piece also has to be available at the same volume.
Rivian’s finance chiefs raised the same costs on the October call. Claire McDonough, then CFO said the team “continues to work hard to manage supply chain risks and increasing commodity and memory costs.”
Derek Mulvey, who has since become Interim Chief Financial Officer, said “rising costs of core components” had affected profitability and were expected to keep doing so.
The company’s quarterly report for the period says the rapid increase in AI development “has created unprecedented demand for compute infrastructure, memory and related hardware and power, and vendors may prioritize other AI developer customers and contracts.”
“As a result, we have had to, and may continue to have to, pay premium pricing to secure capacity and may experience delays in securing such capacity,” the filing says.
The same filing says the majority of Rivian’s suppliers are “single-source providers,” and that China’s export controls on materials including rare earth minerals “have impacted, and could continue to impact” its ability to receive raw materials and components.
It adds that a number of suppliers have notified Rivian of potential supply chain impact from tariffs, and that renegotiating with them has raised costs.
AI to Find Alternate Parts
Rajagopalan said AI tools now help when a part is unavailable, a problem she said Rivian deals with all the time.
“Looking for alternates, compatible alternates, you can throw all that stuff at AI where previously it was very manual, labor intensive process,” she said.
The gain has a ceiling. “AI definitely helps everything, but at the end of the day, you’re still limited by the physics of how long it actually takes to manufacture something,” she said.
Returning to a question about the supply ecosystem for sensors and computing, Rajagopalan said it was “largely robust” in the Western world. She named LiDAR as one of a few areas still developing and said she expected that to change quickly.
Rivian has not named the supplier of the LiDAR it plans to fit to the R2.
Designing Its Own Chip
Scaringe said supply was part of the case for designing Rivian’s autonomy processor in-house, a decision he dated to about four years ago.
A payback analysis of the savings from avoiding a third party’s margin is “pretty straightforward,” he said. The harder question, he said, is what the supply chain looks like and whether there are “strategic or structural reasons” to control the whole system.
Rajagopalan said Rivian brings in-house anything it considers strategic, such as hardware running software that controls critical vehicle behavior, and buys merchant silicon in other areas.
Scaringe applied the same lens to robotics. He said a significant percentage of the robotics companies he met before founding Mind had not built hardware at scale and lacked “an understanding of what goes into design for reliability, design for supply chain.”
“You’re going to have a lot of scaling challenges,” he said he concluded after the first few questions.
What the Constraint Has Cost
The supply chain has left marks on the R2 program this year.
Rivian’s second-quarter results included about $100 million of incremental R2 ramp costs, covering expedited freight, temporary supplier premiums and unabsorbed expenses, the company said on its July 30 earnings call.
It recognized about $120 million more in the third quarter, McDonough said in October.
A second R2 shift at the plant in Normal, Illinois, began before the end of September. Vice President of Investor Relations Chip Newcom has said that “it’s really the supply chain right now that is constraining production within the plant.”
Rivian produced 19,751 vehicles and delivered 19,248 in the third quarter, according to the filing, which says the Normal plant is “operating significantly below full vehicle production rate capacity.” Upgrades completed in 2025 raised its capacity to 215,000 units a year.
Deliveries were up 46% from a year earlier in the R2’s first full quarter on sale, while the gross margin slipped to 8% from 11% in the second quarter.
Rivian raised its 2026 delivery guidance to 67,000 to 70,000 vehicles from 65,000 to 70,000 with the results. Mulvey said the R2 is expected to account for the majority of deliveries in the fourth quarter.
With 41,807 vehicles delivered in the first nine months, the new range implies about 25,200 to 28,200 in the fourth quarter.
Owners in the Queue
Owner-reported data point to a lengthening queue for the R2. Of 3,847 R2s linked to the owner-run tracker ‘Roamer’ on Tuesday, 2,017 had been delivered and 1,008 were still waiting for a vehicle identification number, or VIN.
Another 810 had a VIN and were awaiting shipment, in transit, at a service center or awaiting delivery.
The median wait from configuring an order to receiving a VIN was 45 days across tracked orders, up from 34 days on October 21, when the tracker held 2,516 R2s and 725 were waiting.
Roamer’s weekly medians put that wait at under 15 days for VINs recorded through mid-September and at about 40 days in recent weeks. Among orders still without a VIN, the median wait so far was 26 days and the longest 147 days.
Once a VIN is assigned, the tracker shows a median of 19 days to a scheduled pickup day.
Roamer counts only R2s whose owners link their accounts, not every vehicle Rivian has built, and its data do not show why an order is waiting. Rivian does not report R2 volumes separately.
