The North American electric vehicle industry is going through a turbulent period. Rivian, the California-based manufacturer specializing in premium EVs, has confirmed the elimination of about 225 positions (or 1.5 percent of its workforce), this as it retools its factory in Normal, Illinois, to launch production of the new R2 SUV in 2026. The cuts affect Rivian’s sales and service operations in both the U.S. and Canada.
This restructuring comes in a tense context. The end of the $7,500 USD federal tax credit, scheduled for September 30, is expected to cause a sharp slowdown in electric vehicle sales starting in the fourth quarter of 2025.
Rivian bets big on smaller R2
After launching the R1T pickup truck and the R1S SUV, Rivian is now readying to introduce the R2, a midsize electric SUV to be offered starting at $45,000 USD. Its mandate is to reach a broader customer base and compete directly with the Tesla Model Y, Ford Mustang Mach-E and Hyundai Ioniq 5.
To prepare for production of the R2, Rivian will temporarily close its factory for three weeks in September 2025 to install a new assembly line dedicated to the model.
GM and VW also curb their ambitions
Rivian is not the only company rethinking its plans in the face of expiring federal credits and a market slowdown.
General Motors will temporarily suspend EV production at its Spring Hill, Tennessee, plant for several weeks this fall. This measure will notably affect the Cadillac Lyriq and Vistiq.
For its part, Volkswagen announced last week a slowdown in production of the all-electric ID.4 at its Chattanooga plant. That will entail a temporary layoff of 160 employees at the end of October. According to the manufacturer, this is a “market-driven decision” to adjust production volumes to demand.
An unfavorable economic context
The end of the tax credits, combined with the rising cost of raw materials and pressure from tariffs, is complicating the profitability of EVs for manufacturers.
Rivian recorded a net loss of $1.1 billion USD in the second quarter of 2025. The company expects to deliver between 40,000 and 46,000 vehicles by the end of the year, a decrease from the 51,579 units delivered in 2024.
Price hikes on the horizon
Rivian has already slightly increased its prices for 2026: the R1T starts at $72,885 USD and the R1S at $78,885 USD (fees included). The disappearance of the federal tax credit will make high-end EVs less attractive. Rivian hopes to attract a wider audience with the more accessible price of the R2, but the competition is set to be fierce.
The current slowdown in the EV market is not a simple accident: it reflects the limits of demand in a context where government incentives are disappearing. Rivian, GM, and Volkswagen are adjusting their strategies to navigate this period of uncertainty by betting on more affordable models better suited to actual demand.