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The R2 reveals — in its smallest details — the automaker’s aggressive new focus on keeping costs low.
Let’s get the big news out of the way: The new Rivian cars are very cool. The airy R2 is a two-row SUV that, if released today, would rival anything else on the American electric vehicle market; Rivian claims that its entry level trim will cost $45,000 and that it will get more than 300 miles of range. After including the Inflation Reduction Act’s incentives, that means the starting price for this car — for many Americans — will be $37,500.
Even more exciting are the company’s R3 and performance-oriented R3X, a hot-hatchback-slash-crossover concept that will be even cheaper than the R2 and has “the soul of a rally car,” according to Rivian’s lead designer Jeff Hammoud. It looks at once like a Volkswagen Golf GTI, an AMC Gremlin, and — could it be? — a Yugo. I love it.
It was a good day for Rivian after a disappointing year. Many things about its business are still working well. The brand evokes a fusion of Apple’s and Patagonia’s sensibilities, although it’s historically been priced more like Porsche, and it has become a favorite of high-earning Millennial dads. I saw more Apple Watch Ultras on Thursday than I have ever seen in one place before. RJ Scaringe, Rivian’s chief executive officer, was wearing one of them.
But Thursday, more importantly, signaled a new phase in Rivian’s life. After years of aggressive spending, the Irvine, California-based company is cutting costs and trying to find a financially sustainable — and profitable — footing. It’s one more sign that in the global electric vehicle sector, an industry that will be central to the fight against climate change, the startup phase has definitively ended.
This shift to profitability can be seen in virtually every aspect of Rivian’s business right now — and even in the design of the R2 itself.
Courtesy of Rivian.
If Rivian can make it, its prospects are good. It is one of a handful of American electric-vehicle makers that has a shot at competing with Tesla and surviving for the long term. But that will require it to get through the next few years and cross the “EV valley of death.” This is the period after a company has fully ramped up production and has very high costs, but before its revenue has grown to compensate. Tesla made it across this valley in 2021 and 2022; now Rivian is making its own attempt. This was the deeper message of Thursday’s event: Now is Rivian’s make-or-break moment, and the company’s leadership knows it.
To get across the valley of death, Rivian must become obsessive to the point of maniacal about its costs. The company’s survival is going to be an exceptionally close thing, and every dollar will matter. That’s why possibly the event’s most important news came right at the end, when Scaringe disclosed, almost as an aside, that Rivian is indefinitely delaying work on its new Georgia factory. That will save it about $2.25 billion, a significant sum for a company that burned roughly twice that amount last year. Rivian’s shares leapt 13% on the news.
“Every single thing we do within the business is focused on driving costs on this,” Scaringe told CNBC on Thursday. Other Rivian executives kept the message going: Walking through the R2’s design with reporters, Jeff Hammoud, Rivian’s design chief, mentioned the company’s efforts to cut costs at least six times. (Form follows function, indeed.)
The team kept asking itself “how can we simplify things — and not only simplify things from a design perspective, but also from a cost perspective,” he said, adding that “we’re not trying to make this thing feel or look cheap — that’s not what we do.”
He’s right: The R2 does not look cheap (as for feel, I wasn’t allowed to touch it), but some of the R1 series’s more premium touches are gone. Rivian has moved the R2’s speakers out of the driver and passenger doors and put them in the center console, a cost-saving measure that Hammoud suggested would give people more space for their water bottles. One of the panels in the car’s rear is made of mold-injected plastic, not sheet metal, which Hammoud said will save money and make the car easier to repair after a fender bender.
Then there are changes most drivers will never notice. The R2’s dashboard panels have a wood-like finish, and Hammoud wanted us to know that they are made of actual wood. And unlike other cars, which use wood purely as a decorative element — I assumed he was talking about the BMW i3 here — the R2’s wood is structurally integral to the dashboard. In other words, they look good and save money on underlying structural material. “With our vehicles and the R2, [the wood] literally holds the screen, it creates the shape for the vents,” Hammoud said. “If you were to take it out, literally the panel would fall apart.”
Courtesy of Rivian.
You can see, too, how other business needs are shaping how the vehicle looks and works — and even what kind of vehicle it is in the first place. Rivian only sells vehicles in the United States and Canada now, but wants and needs to expand into global markets in the coming years. It might be most famous for its pickup trucks, and yet Rivian didn’t announce a next-generation pickup on Thursday. Hammoud told me that that’s partly because Rivian is thinking about what will work well abroad, and mass pickup truck ownership remains a profoundly American phenomenon.
The charging port on the new Rivian models is on the rear passenger side, a move that confused many Americans who have come to prefer the charging port on the drivers’ side. (That’s where Tesla and the Rivian R1 put it, and the location is seen as better for home charging.) But think about it, Hammoud said. Many people in left-hand-drive countries charge their vehicles on the street, and a passenger-side setup — which becomes a driver’s side setup — makes more sense for them. The new setup also puts the charger closer to the battery, reducing the amount of high-voltage wires needed in the car. That cuts the car’s weight and — ding ding ding — lowers its cost. (Tesla puts its charger in the car’s rear for the same reason.)
The company hasn’t always been like this. During the first decade of its existence, interest rates sat nearly at zero, and Rivian could spend with abandon. It planned for its sprawling Georgia factory and could plan to sell more expensive cars to consumers who had access to cheap credit to buy them. The R2 carries forward the R1 tradition of having a flashlight in the drivers’ side door, but it lacks the hidey holes and air suspension of its predecessor. “With the R1, it was our premium flagship. We got to say yes to a lot of things,” Hammoud said. With R2, the question was “what do we have to say no to.”
Courtesy of Rivian.
This spring, Rivian will close down its Normal, Illinois, factory for a series of process upgrades. These will speed up its assembly lines and allow it to make its existing vehicles, the R1T and R1S, faster, with fewer internal computers and less wasted material; Rivian expects these improvements to carry it most of the way to profitability.
Even if it achieves its goal of turning a technical profit by the fall, it will still have a long way to go to become an actually sustainable business — and it will have to survive another year with no new products. The R2 is not due to go on sale until the first half of 2026, and the R3, which is built on the same platform as the R2, won’t start deliveries until “after the R2.” (No price or firm release date for the R3 has been announced.) The American EV market will change significantly by then. By the end of this year, some 50 different EV models in the U.S. will get more than 300 miles of range. Hyundai, Kia, Ford, and GM are all capable of bringing new cars to market during that interval that could smoke the R2 or R3, in part because they will be benchmarked off of them. The R2 and especially R3 seem like perfect cars for today’s market — and perfect cars for Rivian’s cash-saving situation. Whether they’ll be as perfect two years from now is anyone’s guess.
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The administration can’t have it both ways on the Clean Air Act.
The Trump administration filed lawsuits this week against four states that are pursuing compensation from oil and gas companies for climate change-related damages. But Trump’s separate aim to revoke the government’s “endangerment finding,” the conclusion that greenhouse gases pose a threat to public health and should therefore be regulated under the Clean Air Act, could directly undercut the legal basis for the suits.
In each of the cases, the Trump administration is arguing that the Clean Air Act preempts the states’ actions. But if the Environmental Protection Agency rules that the Clean Air Act does not, in fact, require the federal regulation of greenhouse gases, that argument could fall apart.
Two of the lawsuits target Vermont and New York for their new “climate superfund” laws that require the companies responsible for the greatest amount of emissions over the last three decades to pay into a fund supporting adaptation and disaster response. The Department of Justice is also suing Hawaii and Michigan to block them from suing fossil fuel companies for damages for climate change-related harms. Neither state had actually filed such a lawsuit yet, although both had expressed interest in doing so. (Hawaii went ahead and filed its suit on Thursday night.)
“I just want to start by saying that these lawsuits by the government are totally unprecedented,” Rachel Rothschild, an assistant professor of Law at Michigan State University, told me when we hopped on the phone. To her knowledge, never before has the federal government tried to preemptively stop a state from filing a liability case against companies.
In an executive order in early April, Trump had directed Attorney General Pam Bondi to “stop the enforcement” of state climate laws and actions that “may be unconstitutional” or “preempted by federal law.” The order singled out lawsuits against oil companies as well as climate superfund laws, calling both a form of “extortion” and a “threat to economic and national security.”
Nevermind that climate change is a major threat to economic and national security, and states have filed these lawsuits and created these laws because they are scrambling to find ways to pay to address the unprecedented damages brought by the increasing severity of wildfires and floods.
Even before Trump took office, Rothschild said, the federal government had warned states that they were going to need to take more responsibility for preparing for and responding to increasing natural disasters. “[States] do not have the resources alone to address this problem,” said Rothschild. “These companies have engaged in an activity that causes external harms that they’ve not taken into account as part of their business practices, they’'re imposing all the costs of those harms on states and citizens, and they should be liable to help us deal with the resulting problems. That’s a very normal activity for tort suits.”
Dozens of states have filed similar lawsuits seeking damages from oil companies. (A Justice Department press release did not say why it was singling out states that had not taken any legal action yet rather than targeting those that had.) Many of these lawsuits have been stuck in a holding pattern for years, though. “Climate superfund” laws are a new legal strategy, modeled on the federal superfund program, that some states are testing to get oil companies to pay up.
The DOJ’s lawsuits claim that states cannot fine oil companies for their emissions because that authority lies with the federal government under the Clean Air Act. That argument is underpinned by the Environmental Protection Agency’s endangerment finding, which stems from a 2007 Supreme Court ruling that greenhouse gases are a pollutant as defined by the Clean Air Act, and therefore the EPA must determine whether these emissions pose a threat to public health. The court said that if the agency finds there is enough scientific evidence to say greenhouse gases are harmful, it must develop regulations to rein them in. EPA officially made this finding in 2009.
This was a big headache for Trump during his first term. He wasn’t allowed to simply repeal Barack Obama’s greenhouse gas rules — by law, he had to replace them. If he’s able to reverse the endangerment finding, however, he could undo climate protection rules and that would be that.
At the same time, he’d make oil companies much more vulnerable. “There is great concern that reversing the finding would open the door to a lot more nuisance lawsuits against all types of energy companies,” Jeff Holmstead, a partner with Bracewell, a lobbying firm, told E&E News. “It would eliminate one of the best arguments that oil companies have used to get lawsuits against them dismissed,” he added.
EPA administrator Lee Zeldin will face an uphill battle in reversing the finding, as there is a mountain of scientific evidence that greenhouse gases cause dangerous climate change. But Zeldin may instead try to argue that the EPA did not consider the cost of addressing these emissions when it made the initial finding — and that the costs of reining them in outweigh the costs of emitting freely.
Legal experts are skeptical this argument will go anywhere, either. In 2012, the D.C. Circuit Court found that the EPA’s endangerment finding should be based on science, not economics. Cost-benefit analyses and other policy considerations are relevant if the EPA finds that greenhouse gases do, in fact, pose a threat, but they “do not inform the ‘scientific judgment’” that the law requires the EPA to make, the judge ruled. Meanwhile, the Supreme Court’s decision last year to overturn “Chevron deference,” a decades-long precedent that gave agencies broad authority to interpret their statutory mandates, could also hurt Zeldin’s case.
Rothschild, for her part, is confident that states’ superfund laws and tort suits are defensible regardless of what happens to the endangerment finding. These actions have nothing to do with the Clean Air Act, she argued, because they are not an attempt to regulate emissions. “They're trying to impose liability for local, environmental, and public health harms from past activities,” she said.
One thing is for certain: Between states’ lawsuits suing oil companies, oil companies’ countersuits, the DOJ’s new lawsuits against states, and probably future suits against any actions the Trump administration takes on endangerment, there’s going to be a whole lot of new case law about greenhouse gases over the next four years.
The fundamentals are the same — it’s the tone that’s changed.
At some point in the past month, the hydrogen fuel cell developer Plug Power updated its website. Beneath a carousel explaining the hydrogen ecosystem and solutions for transporting fuel, the company’s home page now contains a section titled “Hydrogen at Work.”
“Hydrogen is key to energy independence, providing clean, reliable power while reducing reliance on imported fuels,” the text in this new box reads. “Plug’s hydrogen and fuel cell solutions strengthen the energy grid and enhance national security, positioning the U.S. as a leader in the global energy transition.”
It is fairly ordinary website copy, but to a keen reader, the text jumps out as an obvious Trump 2.0 tell. Plug Power — like many green economy companies — has pivoted to meet the political and economic moment, where “energy independence” and “energy dominance” are in and “climate” and “sustainability” are out.
“I am actually shocked every time I look at the website of a climate tech company that still uses the language from 12 months ago, from four months ago — that doesn’t do them any good,” Peter Atanasoff, the managing director and vice president of Scratch Media and Marketing, which helps B2B technology companies and climate tech businesses achieve growth and recognition, told me.
The shift in language is more significant than just brands chasing the latest buzzwords.
The first Trump administration saw broad-based pushback from the business community against Trump’s more inflammatory positions, especially by consumer-facing brands that played to the pussy hat-wearing, brunch-and-protest attitudes of the time. The CEOs of Facebook (now Meta), Nike, and Google issued statements of disappointment when the U.S. pulled out of the Paris Climate Agreement in 2017, and Tesla CEO Elon Musk even dropped out of the president’s business council over the decision. It was, needless to say, a very different time.
During Trump’s second term, he promised “retribution.” Many of the more moderate voices from his first administration are long gone, and there’s a palpable fear among nonprofits and businesses of drawing the wrong kind of attention from Washington, losing grant funding for saying the wrong thing. “The real trigger” for resulting differences in branding between the first and second Trump administrations has been “the change of tone and change of economic policy,” Atanasoff told me. “It is explicit opposition to any of these technologies."
The administration has launched an all-out assault not just on climate policy, but also on the very language of the energy transition. In a February memo obtained by E&E News, the Federal Emergency Management Agency listed 34 words to be erased from official documentation, including “global warming,” “carbon footprint,” “net zero,” and even “green.” As I’ve covered for Heatmap, farmers applying for Department of Agriculture grants have been encouraged to resubmit proposals with climate-focused language removed and “refocus … on expanding American energy production.” And at the National Oceanic and Atmospheric Administration, scientists have quickly learned to pivot to talking about “air pollution” rather than emissions, contending with a banned-words list of their own.
Lobbyists and clean energy companies that want to be in the administration’s good graces have adapted, as well. That has changed the tenor of green business at large. Alexander Bryden, who runs the Washington, D.C. office of Browning Environmental Communications, told me over email that tweaking brand language is “typical after any change of administration, particularly when there are significant shifts in policy.” But especially for organizations in the public eye, “it’s more important than ever to highlight the historic and potential economic benefits of environmental solutions — and show how they are supported by, and benefit, people across the political spectrum.”
The actual fundamentals of green business haven’t changed, though. On the contrary, in the first quarter of 2025, venture capitalists and private equity firms invested more than $5 billion in climate tech startups in the U.S., a 65% increase from the same period a year earlier, according to PitchBook data. While there are certainly obstacles like supply chain uncertainty and tariffs to contend with, especially for clean energy manufacturing, on the whole “it’s still a great time to start a climate startup,” Tommy Leep, the founder of the software-focused venture firm Jetstream, told my colleague Katie Brigham last November. His caveat? “Just don’t call it a climate startup.”
Roger Ballentine, the president of the management consulting service Green Strategies and the chairman of the White House Climate Change Task Force under President Bill Clinton, explained this thinking to me. “It’s what I refer to as climate capitalism, which is the realization that by incorporating climate change and its risks and opportunities into your business strategy, you’re actually going to be a more successful, more profitable, and more competitive company,” he said. Even with the recent economic turbulence, “That hasn’t changed. That’s not going to change.”
Where you do see adjustments, however, is “around the edges,” per Ballentine. Companies are attempting to match the frequency of the administration and, in turn, the broader policy ecosystem — a frequency that tends to be aggressive, assertive, and heavy on words like “dominance” and “security.” It might also take the form of decreasing the volume at which companies had previously shouted their climate bona fides.
Anya Nelson, the senior vice president of public relations at Scratch M+M, said her team has also advised touting “American-made production” in brand messaging, and reframing copy to focus on “the positive impacts and immediate business benefits” of the companies, rather than more idealistic messaging about climate goals that may have had stronger resonance during the Biden administration.
At this point, you may have noticed that I haven’t quoted any corporate brand officers. That’s not because I didn’t try to talk to any. (Even Plug Power, my example at the beginning of this story, didn’t respond to a request for comment on the change in their messaging.) Though the sudden prevalence of terms like “energy dominance” becomes conspicuous once you start to look for them, no one wants to draw the wrong kind of attention from the administration. It’s part of a greater trend of clamming up that my colleagues and I have experienced across sectors in our reporting, and at a time when even the word “green” can give you a black mark, I can’t say I don’t understand.
Ballentine, the Green Strategies president, dismissed reading too much into how language itself changes under President Trump. “If yesterday a new technology company was touting itself as a climate solution, and now it’s touting itself as a way to achieve energy dominance — I don’t care,” he said.
His thinking was more pragmatic. “Good business remains good business,” Ballentine went on. “Around the edges, will things change? Yes. General belt tightening? Yes. Fundamental change of direction? No.”
It might sound like branding agencies are encouraging companies to “play along” with the administration, but Nelson of Scratch M+M stressed that wasn’t what she was trying to say. At the end of the day, “your end goal is to be a viable company, right?” she said. “To be a thriving company that is going to change the world, first and foremost, you need to make sure you don’t go out of business.” The message might be more accurately summarized as “read the room.”
A report from Heatmap’s San Francisco Climate Week event with Tom Steyer.
Last Thursday at San Francisco Climate Week, Heatmap hosted an event with a lineup of industry leaders and experts to discuss the most promising up-and-coming climate tech innovations amidst a backdrop of tariff and tax credit uncertainty.
Guests at Heatmap's event, Climate Tech's Next Winners.Sean Vranizan
First up, Heatmap executive editor Robinson Meyer sat down with Tom Steyer, the billionaire investor and co-founder of Galvanize Climate Solutions, to explore the most promising climate technologies to scale. “No one's going to adopt new technologies to be nice,” Steyer noted. “They're gonna adopt new technologies because they're better, because they're a better deal, because they're cheaper or in some ways solve a pain point for the customer.” Steyer went on to emphasize that there is at least one “transformational and disruptive” idea for every six verticals in the climate industry — for example, measuring carbon sequestration in nature with machine learning andAI, a concept that was “literally unimaginable 5 years ago.”
Tom Steyer and Robinson Meyer.Sean Vranizan
As for the Trump-sized elephant in the room, Steyer encouraged climate tech startups to focus on “good leadership” as well as the willingness to adapt in this uncertain moment. “You’re gonna have hard times, and the world is going to change, and you’re going to have to figure out what to do,“ he said. Steyer also noted that all Americans, not only those working in climate tech, should understand the energy transition as a background condition of their careers. “If you want to be a screenwriter (...) be a screenwriter. But it’s really important that you put [the energy transition] into your screenwriting. If you‘re a banker (...) be a banker with an awareness of this issue. Bank the good stuff, not the bad stuff,” Steyer explained. He finished up the discussion with a remembrance of the late Pope Francis, a “tremendous human being for the planet.”
Sam D'Amico and Nico Lauricella.Sean Vranizan
Also on Thursday was a lightning talk between Nico Lauricella, Heatmap’s CEO and editor in chief, and Sam D’Amico, the founder and CEO of Impulse Labs, which sponsored the event. D'Amico explained that in addition to being an induction stove, Impulse’s Cooktop is “a way to get battery storage into people's homes” — a “concept car” for using batteries in appliances to create a more decentralized grid. Lauricella and D’Amico also discussed the impacts of Trump’s tariffs on clean tech companies like Impulse, with D’Amico advising other founders in the room to build prototypes based on the supply chain and to make sure they have options in terms of where their products are manufactured so they can keep up with changing trade policies.
Impulse's high-power Cooktop on display at the event.Sean Vranizan
Lastly, Heatmap News staff writer Katie Brigham hosted a panel with Gabriel Kra, managing director and co-founder at Prelude Ventures, Clea Kolster, partner and head of science at Lowercarbon Capital, and Rajesh Swaminathan, partner at Khosla Ventures. The group spoke about the unique circumstances facing investors in the climate technology space, what their firms are looking for when investing in the newest climate innovations, and how AI fits into the picture.
Katie Brigham, Clea Kolster, Gabriel Kra, and Rajesh Swaminathan.Sean Vranizan
All three panelists acknowledged that it’s a delicate time for clean tech investors and companies alike. “Volatility and uncertainty are the enemies of running and planning a business,” warned Kra. The true cost of the tariffs is therefore extremely high, Kra explained. Kolster agreed that things are generally gloomy in the investment space, but also highlighted the technologies that are currently thriving. Carbon removal, she pointed out, “is going better than ever. Contracts are being inked right now, in the past few weeks.” The companies and technologies she’s excited about, Kolster added, are building “cheaper, better, faster,” as Steyer pointed out earlier in the evening.
Swaminathan added that there will always be a certain element of risk when it comes to investing in emerging technologies. “Clean tech companies have so many single points of failure,” he said. “And you have to prop up each part with the right leadership team. You have to have strong pillars so that [your company] doesn’t break.”
Guests following the discussion.Sean Vranizan
Sean Vranizan
Sean Vranizan
Sean Vranizan
Sean Vranizan
Sean Vranizan
Guests at SFCW
Sean Vranizan
Thank you to our presenting sponsor, Impulse, as well as our supporting sponsor, V2 Communications, and our event host, IndieBio.