Rivian CEO RJ Scaringe on Ignoring Musk and Learning from Bezos

In the latest edition of GQ Clout, the founder of the world’s buzziest electric truck maker talks about competing with Tesla while battling climate change: “It’s a multidimensional 20-year chess game.”

Rivian CEO RJ Scaringe on Ignoring Musk and Learning from Bezos

Photograph by Cayce Clifford / Courtesy of Rivian

It’s 7 a.m. in Irvine, California, and RJ Scaringe is already in the office, drinking a green smoothie and waiting for guests. The Rivian founder and CEO has been working toward building mass-market electric vehicles since 2009, and still exhibits the passion of someone in a startup’s early days. “Innovation and progress require that kind of obsession,” he tells GQ. It hasn’t always been an easy road for Scaringe, who took out a second mortgage to help fund the company and then raised billions of dollars before delivering a single vehicle. And the company, which according to The Wall Street Journal lost $30,000 on every truck sold between April and June, still faces serious headwinds on its path to profitability. But things finally seem to be looking up. Rivian’s debut R1T pickup won MotorTrend’s Truck of the Year for 2022, where reviewers called it the most remarkable pickup truck they’d ever driven. And after testing its R1S Suv, the The Verge dubbed it “King of the Mountain.”

The big guns have certainly helped: Ford, Amazon, and others have collectively put in more than $10 billion in private funding. And in 2021 Rivian went public, raising $12 billion and further upping the stakes. Scaringe befriended Jeff Bezos en route to Amazon’s investment, but Elon Musk is the tech titan who factors most in his life. The mercurial Tesla CEO’s Cybertruck seems perpetually ready to be released and is already appearing on local roads. Scaringe will have to contend with Musk’s new truck, which threatens to cut his growth at a crucial moment. And those guests on the way—his corporate board—will certainly ask about it. But beforehand, Scaringe spoke with GQ about the path to where he is today, how to balance delegating and micromanaging, and when it makes sense to literally bet your house on a big idea.

GQ: What’s on the agenda for the board meeting?

Scaringe: All the fun easy topics. No, I mean we have a board that’s really open and dynamic. We typically start with a few hours of just open discussion around some of the biggest strategic questions and areas of the business.

Your main facility is an old Mitsubishi auto plant in Illinois. Is the fact that you’re there, and they’re not, a lesson in the ephemerality of the business?

Businesses need to continue to challenge themselves and evolve. The products being built there before were representative of what was, as opposed to what’s going to be.

You’ve had to play the long game—you started out as an entrepreneur in your 20s, and you’re 40 now. How do you balance being patient with quickly adapting to the moment?

One reason startups are so effective, particularly early stage startups, is the ability to rapidly iterate on an idea. When I started the company, if I was dead set on what the strategy was and wasn’t able to pivot or change or evolve, it would have been impossible to be successful. One of the enabling factors of startups is this desire to iterate, this desire to challenge one’s own ideas.

And you pivoted from a sports car to a pickup truck.

Yeah, but it wasn’t as if Friday night we put the sports car away and Monday morning we started on a pickup. There were many, many iterations in between them.

You can’t keep iterating every time there’s a new trend, though. Self-driving cars are promising now, but you decided to stop before then, right?

We’re building electric, smart, connected vehicles. And if we iterated off that, that’s a really big change. But then there’s lots of smaller insights and iterations, some of those may be around how we achieve a certain objective, like a feature or a technology. And then some of those may be strategic. But that tension is real. And one of the things we talk about a lot internally is that our objective is not to just create a formula and rinse and repeat. We need to continually be stretching ourselves, stretching the brand, stretching the products, stretching technology.

You’ve been obsessed with cars since high school?

Since I was a kid.

Our society tends to view people with obsessions as weird. Do you think everyone should have one?

I think indifference is a real challenge to society’s progress. I was deeply passionate about cars and transportation. Then as I got older, I realized these things I loved and grew up dreaming about—from a very young age, I would have windshields and engines in my room—were the source of so many of our macro challenges as society. Everything from the vast majority of wars, to the fact that every major city in the world has air quality issues largely as a result of cars, to climate change. It led me to say, “Well, can I be a helpful participant in driving some of the change we need to see?” Which of course led to me creating Rivian.

You can be obsessed with something and then you can go all in on something. You took out a second mortgage to build this company.

That’s right. It would have been a lot easier to start Rivian if we started with a lot of capital. Some of the first investment was leveraging a house that I had. My dad did the same. My dad refinanced the house he had, and two of us put some money in, which at the time seemed like a lot. But now I realize that was just a speck of a seed, if you will.

Compared to the billions you’ve raised?

Ultimately, to start a car company, if you’re realistic about developing technology and product, it’s a multibillion-dollar initiative.

When does it make sense to literally bet the house?

There’s something a lot of entrepreneurs have, which is a really powerful skill, then as the company grows, you need to understand how that skill can also be a weakness—which is extreme optimism. I’m extremely optimistic, and I look back, and I think, boy, I was 26 years old, I had no capital, no tech, no brand, no anything. And I thought that with $150,000, I could just start a car company. It’s an extremely low probability proposition. But there was such a degree of optimism, and there’s so much energy that I poured into it, that it started to create a really positive flywheel, and that energy created more energy, and it created more interest from partners, investors, then we’re hiring people, and it took years. But ultimately, it was built on a tremendous amount of optimism.

There are two ways to go about your business. One is to be boastful and puff yourself up. That works in business and politics. You have Elon and Trump. And then the other way is to be quiet. You’ve been the latter. Why pick that route?

You have to be authentic to who you are. My baseline is understated. I’m not by any means shy, but I’d rather put my head down and focus on execution. And I think one of the big challenges we have as a society is that there’s so much noise in the system. And there’s a lot of hype. There’s a lot of digital bullying of all sorts. As a company, we want to represent something different. And we want to make sure we’re focused on results.

The reason Rivian was created, and the reason we’re working hard, is to create products that shift mindsets and to create incredible experiences. Not to build something that in any way is trying to create polarization or trying to say “us versus them.” The scale of the challenge we have in terms of transitioning to sustainable energy is enormous, and this is not the time to be throwing stones.

Has being quiet hurt you? The other way seems to be working quite well for Musk.

I don’t think it’s hurt. We let the products do a lot of the speaking. And in fact, our customers do a lot of speaking. But I think there’s a level of intentionality with how we talk about what we’re doing. And I think that’s serving us well in terms of building that foundation or brand. Now, it’s not the fastest way to build a brand, right? Making bombastic statements is always a faster way to get a lot of coverage, a lot of clicks, but we don’t have a shortage of demand, we have a lot of people really excited. In fact, our biggest customer complaint today is that we’re not building vehicles fast enough.

You’re a $22 billion car company—that’s pretty big. Is it weird for you that Elon looms over almost everything you do?

I’ve owned multiple Teslas. I think the world’s better because Tesla’s here. But we have to recognize we’re still really early. It may seem like electrification has happened, and we’re there. But around 10 percent of new vehicle sales are electric. There’s a lot of growth left. And it’s still very unclear who’s going to be the big owners of the market as you add up to 100 percent.

There are many distractions in your world, Elon perhaps primary among them. Do you have a way of minimizing them?

If you’re a racecar driver, and you spend all your time looking at the cars, the left and the right, you’re going to run into the wall. When you play the game that we’re playing, we need to focus on the products we’re building. We’re really confident with technology platforms, with the brand that we’re building. We’re one of the largest market-share players in the premium segment. So what we think of as our flagship vehicles—the R1T, cars over $70,000—we’re the dominant market-share player there.

But as we move into what we call our R2, which is a much lower price point. Tesla is the dominant market share player there. So that product is so important for us, because it’ll be the first time we create something for that much broader cross section. And the relevance of the brand goes way up when a big cross section of the population can actually be a customer.

How much is that new car gonna cost?

The R2 generation, it’s gonna be priced in the $40,000 to $60,000 range. It’s right around the corner. I’ve never been so excited about something that we’re building. This is unreal.

You have a friendship with Jeff Bezos. How does someone become friends with Jeff Bezos?

I was introduced to him and we hit it off. I think he connects with entrepreneurs and people who have an appetite and a tolerance for high risk, and that’s certainly me. And so we quickly realized we had a great connection, and fortunately, that ultimately led to Amazon taking a significant position in Rivian as an investor, and then us designing a partnership together.

What did you learn from Bezos?

Jeff and the team at Amazon spent a lot of time asking, Do we understand the chessboard? Are we planning a two-move strategy? Or do we have a 25-move strategy? With a 25-move strategy, implicit in that is we’re thinking on a multi-decade basis. And are we planning to build a really big business? Which, of course we are. You don’t start a car company, and raise the kind of capital we’ve raised, to sell 50,000 cars a year. Our objective is to sell many millions of cars a year. But you can’t press a button and go from zero to 5 million cars or 10 million cars a year. It takes a lot of build up. It’s a complex, multi-dimensional 20-year chess game.

You’ve been public since 2021, and your stock price has been as high as $172 a share. Now it’s in the $20 range. Is there anything that you could have done differently?

We listed at $78 a share. And we’re now at $24. It’s painful to see the share price come down. But I have an all-hands meeting every two weeks. And I say, Look, if we continue to execute, everything takes care of itself. The first thing that we need to make sure we have is a product and a brand that people care about. So is there demand? And is the brand resonating? Are the products connecting? Have they won multiple awards across every sort of metric? Can we build them? Can we ramp up production? Can we do all this in a profitable way? Which we are in the process of doing. So it’s not as if the long-term metrics by which we’ll be judged are complex. Build things people want, be able to build them at scale, and be able to build them profitably.

Not only are you trying to get cars off the line, you’re dealing with a company that’s gone public during COVID with the supply chain crises and you don’t seem frazzled. What’s your secret?

This is so much easier than 2010 and 2011. We couldn’t make payroll. Like every other week, we were running out of cash. And we had 14, 15, 20 employees and we’re trying to start a car company. That’s hard. Today we have products people love, we have a clear line of sight to profitability. We’re ramping up, and the next product has been developed by this incredible team.

We started setting up our plant in February of 2020. You couldn’t have picked a worse time. Imagine installing a billion and a half dollars worth of equipment starting in February 2020. We had to be creative. And then immediately after getting all the equipment installed, we had this massive supply chain shortage, which basically meant we had a plant that we couldn’t run. And it’s very public—we are a public company, so we got punched in the face, so to speak, in front of everyone. But that was okay. Like, we got through it.

Wait, you’re saying that that was the chill part?

That was hard, but I knew it was gonna be hard. You don’t start a production plant in a car company thinking it’s going to be a walk on the beach. It’s going to be hard. If you want to join a company where you’re walking on a paved path, and there’s a cool breeze, and the sun’s in just the right spot, this isn’t that company. If you want to join a place where you’re going to be climbing up the side of a mountain, there’s no trail markers, and sometimes you grab a rock and the rock pulls out and you’re like, Oh, damn, what do I hold on to now? So it’s exciting, it’s invigorating, it’s going to stretch you. If you go in with that mindset, that’s a totally different outcome.

You still haven’t told me how you manage stress. There’s a line from a Times article that says, “Mr. Scaringe is a control freak who weighs in on everything from the color of the bathroom tiles, to lightning in the assembly plant.” Is that part of it: to be so in the details that you feel like you have everything managed?

On day one, year one, I was everything. I was the CFO, the CEO, the head of engineering. I had a laptop and I was drawing parts in CAD. I was doing everything from running spreadsheets, because we didn’t have a CFO, to cleaning the bathrooms on the weekend. Then we brought on really capable people that allow me to empower lots of other folks to make decisions. In developing a car, there’s something on the order of 10 to 20 million decisions that need to be taken in the development of a vehicle, everything from the radius on the structural part under the hood to the millions of lines of code that are going into the software stack. All those decisions obviously can’t be taken by one person. So there needs to be a way to drive highly distributed decision making, but do it in a way where, from the outside, it looks like there’s one brain that made every single decision, like it’s holistically managed and thoughtfully choreographed across those thousands of people making tens of thousands of decisions every day. I have been very deep into picking colors of walls and buildings or lighting configurations in the plant. But as we’ve scaled, a lot of those things that I used to do are now things that we have teams that are really capable of doing.

You want to decarbonize the world. Is more consumerism actually the right way to do that?

This is one of the most complex moments in human history, whereby the things that we allow to continue happening in terms of how we run our world, this industrialized complex that we live in today, if we just continue status quo, we will ruin the planet to a point that it’s nearly uninhabitable for all future generations. We have to replace all the stuff we have. We have to take the 8,500 coal power plants that exist in the world offline and replace them with renewables. We have 1.5 billion combustion-powered vehicles that if we could press a button and turn all those off, we should. So we’re going to have to buy new stuff and replace old stuff as quickly as we can. And that’s not easy. What do you do with the old stuff? Can you recycle it? How do you finance that shift? These are multi-decade big challenges. And there’s a lot of retrofitting, or replacement, that’s going to be necessary to move to a carbon-free, global economy.

How do you read what’s happening in Detroit right now, where the United Auto Workers is striking the major automakers?

Organized labor is a decision of the workforce, if the workforce wants to be organized, you know, organized into a union…

Would you welcome organized labor?

We believe the most effective relationship has a direct relationship. And I believe this, not just with our employees, I believe it broadly. We don’t believe in intermediaries. Every car company with the exception of ourselves and Tesla pays a third party to sell their products, they pay dealers 10 to 15 percent. Those intermediaries create a lot of friction. I think the same is true for an intermediary that’s charging essentially a service fee to employees to act on behalf of the employees, which is what a union will do. We’re watching this. Unfortunately, there’s a lot of tension. I don’t think either side is being represented well, I don’t think the manufacturers or the employees are going to benefit from these collective actions.

One issue is the exorbitant pay that CEOs receive, especially compared to line workers. Do you think CEOs of auto companies should be making less?

There’s market rates for things. And so if someone decides to pursue a career in artificial intelligence, versus someone that decides to pursue a career in, let’s say, manufacturing, the competition for talent, and the competition for those skill sets is different.

Do you think the ratio of CEO pay to worker pay in this country is healthy? I mean, of course there’s market rates, but in some places, it’s just out of control.

There’s definitely examples of it being wrong. The other thing to recognize is a lot of the packages that often get looked at, a lot of it’s equity. A lot of it’s built upon creating value. It’s at risk pay, meaning if the business doesn’t grow in value, the compensation isn’t realized. But that’s something that has to be thought about. One has to think about making sure that the compensation levels across the business are effectively rewarding all the hard work that goes in across all parts of the company.

Do you think the Cybertruck is pretty or ugly?

I think it’s cool that there are products like it that exist. It’s a really unfortunate part of where we are from a societal point of view, that everything needs to be pitched into: For this to win, something else has to lose…

That wasn’t my question, though.

Personally, it’s not something I would buy. But I think it’s cool that it exists. I think it’s good that there’s a diversity of products. I think it’s good that there’s cool choices. I’m a car enthusiast at heart. I like to see people putting different things in the world.

You’ve bought Teslas in the past. Why won’t you buy this one?

It’s a matter of personal choice. personal taste. It’s not for me, but I know it’s gonna be for someone.

Alex Kantrowitz is the host of Big Technology Podcast and the author of Always Day One: How the Tech Titans Play to Stay on Top Forever.

Pop Culture

Products You May Like

Articles You May Like

Adidas Slams ‘Dusty’ Kevin Durant For Anthony Edwards Shoe Diss
Casino Vacations: The Excitement it Offers Aussies and New Zealanders
Ra Pu Zel and the Stinky Tofu
Briston Squares the Circle with Clubmaster
Manga and Manhwa like Nano Machine

Leave a Reply

Your email address will not be published. Required fields are marked *