As the electric vehicle market weathers a fresh bout of uncertainty, Rivian Automotive Inc. is grappling not only with evolving consumer preferences but also a shifting global trade landscape that’s clouding the sector’s growth trajectory.

On a recent CNBC interview with Phil LeBeau, Rivian founder and Chief Executive RJ Scaringe acknowledged the tailwinds and headwinds defining the EV startup’s crucial juncture. While Rivian recently posted its second consecutive quarter of positive gross margin—a significant feat in a market punctuated by high cash burn—the company’s outlook is hemmed in by rising capital expenditure and cautious guidance on deliveries. Rivian now expects 40,000 to 46,000 vehicle deliveries for the year, down from an initial range of 46,000 to 51,000.

Scaringe put the turbulence squarely in context: “There’s a lot of uncertainty… both in terms of our cost structure on CapEx… with the trade and tariff situation. We are reflecting more CapEx spend for the same content,” he told LeBeau on Closing Bell Overtime.

The U.S. electric vehicle industry finds itself at an inflection point. After years of demand-driven expansion, particularly for high-end EVs, the sector is bracing for tariffs on imported components—especially batteries from China—and seeing consumer sentiment take a more price-sensitive turn. That’s putting pressure on automakers to recalibrate both their supply chains and product portfolios while keeping a watchful eye on capital efficiency.

A Shifting Customer Base

Rivian, famously brewing a fervent customer base for its adventure-oriented R1T pickup and R1S SUV—both starting above $70,000—has ridden the wave of premium EV enthusiasm. Scaringe noted that Rivian’s R1S leads as the “best selling premium SUV over $70,000—electric or non-electric—in California,” insisting that “the product is doing well.” He emphasized that Rivian is “the best selling premium electric vehicle, over $70,000, in the entire United States.”

But cracks are starting to show in the EV luxury segment. Data from automotive analysts suggests that even consumers inclined to pay a premium are re-evaluating big-ticket purchases as interest rates stay high and EV tax credits become more complex.

“The challenge is, as consumers start to be more price sensitive, it’s only our flagship product… so we really need our R2 product in the market,” Scaringe said, referencing a forthcoming mid-size SUV aimed at a lower starting price point of $45,000. “As we see more price sensitivity… having that lower-priced product is going to be really important for us.”

Margin Under Siege, Strategic Pivots Ahead

While Rivian posted a gross profit of $206 million for the quarter, the dynamic and sometimes punitive tariff environment is already affecting its cost base. “We are reflecting more CapEx spend for the same content,” Scaringe said, referencing the impact of tariffs on imported equipment and materials. That means launching new vehicles and scaling up production may require larger outlays just to hold the current line on content and capability.

Scaringe also said Rivian is exploring internal “knobs we can turn” to preserve profitability, including product mix management and beefing up premium offerings such as larger battery packs (“max pack”) and higher trim levels that boost the company’s average selling price, which currently exceeds $88,000 across all vehicles.

The company is also leveraging vehicle financing and leasing programs as levers to engage cost-conscious buyers. But Scaringe underscored that profitability, not short-term volume, is his prime directive: Rivian will “drive towards profitability,” even if it means sacrificing some near-term market share.

That discipline will be tested as the company strives to bring the R2 to market. Industry watchers see the R2 as Rivian’s bid to penetrate a broader swath of the U.S. car-buying public, which remains largely on the sidelines in the under-$50,000 EV segment dominated by Tesla’s Model Y and Model 3.

Supply Chain, Capital, and the Volkswagen Lifeline

With ballooning CapEx and strategic expansion ahead, access to capital is coming under scrutiny. Volkswagen’s decision to commit up to $5 billion in funding—contingent on Rivian’s gross profitability milestones—has become a crucial buffer. Rivian unlocked another $1 billion in funding from Volkswagen following its latest gross profit milestone.

“This second consecutive quarter of profitability does unlock another billion dollars coming in from Volkswagen that supports an overall strong cash position… and allows us to launch our R2,” Scaringe told CNBC.

The partnership offers Rivian both financial ballast and, over time, technical collaboration and scale. Still, it does not immunize the company from the volatile backdrop. With negotiations and policy coming from Washington and Beijing recalibrating the costs of batteries, rare earth minerals, and charging infrastructure, the next year is shaping up to be pivotal not just for Rivian, but for the future of U.S.-based EV manufacturing.

A Delicate Road Ahead

The path forward is rife with complexity. Rivian’s current lineup resonates with premium buyers, but the need to broaden appeal has never been greater. Its cash balances—buoyed by Volkswagen’s infusion—will underwrite new launches, but not without cost inflation and regulatory shadows in both sourcing and sales.

The industry’s transition from a demand-fueled sprint to a margin-oriented marathon is forcing hard decisions about model lineups, production footprints, and pricing levers. With competition from legacy automakers and EV pure-plays intensifying—and trade friction showing no signs of abating—Rivian and its peers are set for a period where adaptability will be as crucial as ambition.

As Scaringe concluded in his remarks, a “significant volume step up” is coming with the R2—but getting there will require deft navigation of a trade landscape in flux, and a consumer heartbeat that’s harder to predict than ever.