On July 25th, Caixin News reported that sometimes business competitors may be better able to explain a company's difficulties. Rivian, who has been struggling in the electric vehicle field for many years, has always been one of Tesla's strong competitors. Faced with Tesla's declining market share, Rivian CEO RJ Scaringe has his own thoughts.
In an interview this week, Scaringe pointed out that although Tesla's Model Y and Model 3 are excellent, they are already saturated in the market and consumers want to see more diverse choices.
He added that there are not many electric vehicles in the $50000 price range available in the market, and the number of good products is very rare. Due to the widespread popularity of Model Y in the global market, some electric vehicle companies want to simply replicate its appearance and temperament, rather than trying to come up with new designs like traditional fuel vehicles.
He emphasized that this does not mean that Model Y is not a good car, but rather that the market now needs diversity.
According to data from JATO Dynamics, Tesla's Model Y won the global best-selling electric vehicle title in 2023. However, another report earlier this month showed that Tesla's market share in the United States fell below 50% for the first time, causing widespread concern.
Tesla's second quarter financial report shows that as of June, Tesla's sales decreased by 4.8% and profits decreased by 45%. This weak financial report also caused a significant drop in the company's stock price, further exacerbating market pessimism.
Does a new product have a new market?
In Scaringe's view, one reason why the good car Model Y cannot sell well is the decrease in novelty. He also pointed out that customers waiting outside may prefer an electric vehicle with an SUV appearance, but the best choice on the market may only be a Model Y or a Model Y like vehicle, which makes them prefer to postpone their purchase.
He believes that there is a large potential demand in the current market, and more differentiated products in appearance, packaging, branding, and decoration will drive these customers to shift from internal combustion engine vehicles to electric vehicles.
This old rival of Musk also stated that Rivian strives not to get involved in politics, and even does not pay attention to Musk's political statements or preferences, but instead focuses on how to create great products.
As the US presidential election approaches, Musk repeatedly emphasized his support for Republican candidate Trump, which has led to more and more American Democrats moving away from the Tesla brand, which is also seen as a contributing factor to Tesla's declining market share.
Scaringe also bluntly criticized last month that he would let his products speak for themselves instead of making some exaggerated remarks like Musk.
Returning to the electric vehicle market itself, Scaringe's viewpoint is not just empty talk. Although Rivian is preparing for the release of multiple new models, the electric vehicle products sold in the United States are actually quite fixed in terms of models, and some manufacturers have even reduced the development of new models due to the recent contraction of the electric vehicle market.
Earlier this year, Musk canceled Tesla's highly anticipated low-cost electric vehicle plan and claimed that the company will transition to developing autonomous taxis. Ford and General Motors have also recently abandoned their ambitious plans for electric vehicle development.
For car manufacturers, controlling costs and finding new profit points are very much in line with business logic, but perhaps Scaringe's view is also worth learning from: instead of shrinking along with the existing market, it is better to explore new markets through new products, but this is not an easy task to achieve.