How I Built This with Guy Raz - Charging up the electric vehicle market with RJ Scaringe of Rivian

Episode Date: December 28, 2023

Rivian’s all-electric vehicles have been in high demand thanks to their unique look and handy features. But soon after hitting the market, a series of supply chain snarls led to a backlog of orders and a retreat by key investors. Undeterred, Rivian CEO RJ Scaringe has focused on ramping up production and has big plans for the company’s future — including the release of a new mid-size SUV in 2026.This week on How I Built This Lab, how Rivian continues to shape the rapidly evolving electric vehicle market. Plus, Rivian’s plans to expand charging infrastructure across the U.S. and RJ’s strategies for leading through challenging times. And don’t forget to check out Rivian’s origin story from September 2022.This episode was produced by Katherine Sypher with music by Ramtin Arablouei.It was edited by John Isabella with research by Katherine Sypher. Our audio engineer was Neal Rauch.You can follow HIBT on X & Instagram, and email us at [e-mail] Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

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It had tall windows, beautiful old details, and plenty of space for all of us. And being in that home on Airbnb, right in the middle of Vienna, walking distance from so much of the city, made it feel less like a visit and more like we were actually living there. Plus, taking a trip is the perfect time to host your space on Airbnb. your place with all of its personal touches and its amazing location could make someone else's vacation even better your home might be worth more than you think find out how much at arbb.ca slash host hello and welcome to how i built this lab i'm guy ross rivian trucks and SUVs are some of the most in-demand electric vehicles on the market this is both a good and a bad problem

to have. Good, well, because lots of people want a Rivian. Bad because there's a backlog. Supply for the time being can't meet demand. Now, back in 2022, we told the story of Rivian and its founder, RJ Scouringe. RJ and his team spent almost a decade in stealth mode working on building an electric pickup truck. And if you haven't heard that episode, it's really great. Just go scroll back in the podcast queue to find it or do a search for Rivian and how I built the car. this in your podcast app. Anyway, we wanted to invite RJ back for an update because the company has big plans, not just to increase production, but also to build an all-electric mid-size SUV in 2026, one that will be significantly less expensive than its current models. But even

with all of the success, Rivian has faced many challenges over the past 18 months, including the aforementioned backlog. Much of that has to do with a supply chain squeeze that is really affecting some electric vehicles. We just started production in late 2021, and we launched our truck, our R1T, its sibling variant, the R1S, and then a commercial van with Amazon as a lead customer, essentially all within very close proximity of each other. So within six months, we launched those three different products.

and with a product as complex as a vehicle, there's thousands and thousands of things that can stop production. You have a supply chain with hundreds of suppliers providing thousands of parts. And if any single one of those components is missing or delayed, the whole system comes to a halt. You can't build a car if it's missing a bolt kind of thing. So we ended up being very challenged as we were not only ramping one vehicle, but the three. And then managing three supply chains just led to it. it being, you know, I would argue probably the hardest imaginable year you could pick to be ramping a supply chain, particularly ramping it for the first time and then ramping it across three different vehicles was just,

it was a challenge. It was a challenge. Your primary factory is in normal Illinois in large part because that's where the supply chain kind of meets up. But there are also parts that come from overseas like the semiconductors. And because there's so much technology in these vehicles, there's also a lot of competition for those chips, for those parts. For sure. We didn't anticipate the supply chain challenges, but we also were fighting a battle with a lot of these suppliers where we had no existing sort of purchasing relationship or history. Yeah. And so a lot of the decisions on who was allocated chips or who was allocated components was built around, you know, buyers and purchasers that had years and years of experience knowing the person on the other side of the line, so to

speak. And I think the thing that we probably talked about less, but was also a challenge, was it's not as if if you're missing one part, the only challenge is just that you're not building vehicles. It's that all the other parts still continue to come. So you have this ballooning challenge of inventory where it's not just the cash. You also have to have a place to put all these parts. If the plant shut down for, let's say, a week. Yeah. Because you're missing a handful of components. The rest of the supply chain keeps coming in. So managing all of the suppliers to not only be pushing really hard to get as many of the constrained parts as possible, but then also be managing down production supply of some of the parts that were being produced

as expected, just meant that it was a full court press. I mean, I spent hours and hours every day on the phone or in person with supplier CEOs managing all aspects of this. I mean, it must have been so incredibly frustrating. There's a wonderful video that I've seen that shows the factory in normal Illinois, and it's a really high-tech facility that you built there. But at the time we spoke, it was only running 25 to 30 hours a week, which must have been incredibly frustrating, knowing what it can do, but you couldn't do that. And meantime, all of these supplies that you were getting in were just piling up. What could you do? I mean, you mentioned that you were on the phone and you were even going to meet with CEOs of these suppliers. I mean,

were you pleading with them? Were you? What leverage did you have? Yeah, I mean, it was all the above pleading with them, painting the broader picture of why it was disproportionately important for us as a company to gain access to supply relative to other companies that might have multiple product lines or multiple suppliers providing the same component. But at the end of the day, the only way to get through it was sort of swallow this painful pill and just get through it. You had, I think at the time we spoke in the summer of 2022, there were about 100,000 pre-orders people waiting for. their vehicles and that year, you know, you would produce a fraction of that. How did you manage frustration? You know, I'm sure a lot of people were angry. They're saying, I put the deposit down. Where's my car? I've seen one in the wild. Where's mine? Yeah, I mean, that was a real

challenge. And I would say it continues to be a challenge where we have the great fortune of a product that is in high demand. Yeah, it's really resonated with consumers. And as a result, we still have a pretty significant backlog. And some backlog is helpful, but we need to, of course, make sure that that backlog doesn't create a glass ceiling to interest in the brand. Because what we don't want to be known as Rivian is the brand for which you place an order and you wait years. So we were trying very hard to carry some backlog, but to, of course, shrink that to a much more reasonable level. A challenge in terms of the customer experience is that there is still a wait time. And there are still people that have been waiting for the vehicle for years.

and that certainly isn't lost on us. I know that you're on track, I think, to build 50,000 vehicles this year, this calendar year. Yeah, we're actually, we've guided to say we're going to exceed 50,000. So, yeah, we're doing well this year. And I would say we're in a far better situation than we were in 2022. Yeah. That's not to say there aren't supply chain hiccups with such a large, complex supply chain. There's always going to be that.

That's just the natural course of doing business with this type of a product. I want to ask you about the R2 in a moment. This is a mid-sized sort of lower-priced vehicle that you plan to, I think, release in 2026. But I want to ask you about the general market around EVs, right? Because there's been a lot of chatter that the EV market has slowed down. I think there's some truth to that. We've seen Ford and GM and even Tesla report slowdown in sales. Yeah.

You know, what's your take on it? I mean, I think we can probably agree that in 25 years, no one's going to be driving, I mean, except for enthusiasts. No one's going to be driving a combustion engine. Yeah, hopefully sooner. But yeah, yeah. But right now, there seems to be a slowdown, which may be connected to sort of macroeconomic factors. Yeah.

Are you seeing that in things like pre-orders? I'm so glad you asked this question because I think often in really complex systems, we try to oversimplify the dynamics of a system. And there's a few big drivers. So first, I'd say broadly, in looking across all manufacturers, combustion vehicles and electric vehicles, interest rates being where they are creates pressure on purchasing expensive assets. So things like vehicles that have a high percentage of financing, you're just going to start to feel that and you're going to see it manifest with people being more price sensitive than they

historically would have been. The second thing is there's actually very limited supply of great EV products. And that may seem surprising when I say that because there's a number of manufacturers have launched products. But when I say great EV products, products that are truly represent a meaningful step forward in terms of features, attributes, a cohesive brand story and product story. And so I think we have a gap as an industry where we need a lot more choices at affordable price points. And so competition is the ultimate way to get there. And we need to have multiple highly successful car companies that are capable first conceiving of and then developing products that strike a chord that are interesting.

Yeah. And then building them at scale and building them at a cost. I don't think we're going to end up in a world where there's one or two electric vehicles that we produce 70, 80 million of a year that the whole world buys exactly those two or three products. I think the world needs, you know, lots of products, hundreds of different types of vehicles. Yeah. But today there's like a handful.

We're going to take a quick break, but when we come back, more on RJ's work to create more choice in the EV market, including where to power up. Stay with us. I'm Guy Raz, and you're listening to How I Built This Lab. This episode is brought to you by 8 Sleep. Sleep science shows that in order to sleep our best, our body temperature needs to drop in the early and middle part of sleep and rise in the morning. The pod cover will improve your sleep by automobes. automatically adjusting your bed's temperature based on your individual needs. The cover can be added to any bed like a fitted sheet and allows you and your partner to warm or cool your side of the bed as low as 55 degrees and up to 110 degrees. I've been sleeping on the pod cover by 8 sleep for a few months now and it is a game changer.

Seriously, I've been tracking my sleep for years and in the past few months I've slept deeper, longer, and more sound than at almost any time in my life. It's amazing. The last few months of the year can be stressful, but I rest easy knowing that I'm sleeping on the most sophisticated sleep tech in the world. Invest in the rest you deserve with the 8Sleep pod. Go to 8Sleep.com slash built and save $150 on the pod cover by 8Sleep. Eight Sleep currently ships within the USA, Canada, the UK, select countries in the EU and Australia. Welcome back to how I built this lab. I'm Guy Raz. My guest today is RIVI. founder and CEO RJ Scourange. Over the next few years, his company plans to expand their line of all electric vehicles. So, RJ, the R2, this is going to be your mid-priced sort of crossover that you plan to release in 2026, and it'll, as you say, retail for between $40,000 and $50,000.

It reminds me a little bit of how Tesla rolled out its cars. Started with a roadster, if you'll remember, right, in like 2010. And then it went to the Model S, which was a premium-priced vehicle. out of range for most people. And then they introduced the model three. And that was really how Tesla achieved profitability. It seems like a similar kind of approach, right? You've got the R1T, which is a pickup truck,

and then you've got the SUV version. They are sort of on the higher end of the EV scale. Yeah, yeah. And so this R2, that you'll release 2026, that essentially is kind of your version of a model three. Yeah, I mean, in terms of like strategically, it's very similar. We started with what we think of as like our flagship products, the R1. They're intentionally designed to be positioned at a higher price point. The performance, the capability of the feature set is set up for that. And then we're taking the essence of the brand that's represented by those products and then building that into something that we're achieving lower price points through really intentional and thoughtful tradeoffs you make around content and features. And of course, innovations were driving around cost to manufacture.

Your two visible consumer products are the truck and the SUV, but you're also developing delivery vehicles, vans, which will be used by, you know, businesses. Yeah, there's well over 10,000 of them on the road right now. On the road, yeah. And how much of your business, I mean, do you imagine in the future that is actually going to be the biggest part of your business? No, the consumer side will always be quite a bit larger just because the dresswell market on consumer vehicles is so much larger. But the commercial van, you know, was important for us when we launched, decided to go into that business to have a core anchor customer, a flagship customer, if you will. And, you know, Amazon is a great first customer. One of the things I always talk about in the context of that product is even for customers that haven't yet decided to buy an electric vehicle, if you buy a package through Amazon is delivered with an electric vehicle, you're an electric vehicle customer without even knowing.

Yeah. And so I think that's a really exciting. manifestation of our mission to see it come to life through the lens of a van. And that van, as you say, they're on the road. I've seen them. It's got the round Rivian lights in the front. Yep. That's very friendly looking. Yeah. The other thing that you did was you signed an agreement with Tesla to allow Rivian vehicles to charge a Tesla charging stations. It's obviously the biggest network in the world, which presumably will be an incentive. A lot of people are freaked out about

charging. This question I get asked all the time about when people see me in my car, they'll say, well, you know, what if you run out of charge, which never happens? But presumably that will later rest some of those concerns. How is it going to work? Are, I mean, are Tesla still going have priority at those chargers? Well, there won't be any prioritization. So starting early part of next year, will Rivians will be able to access the Tesla charging network. And in the beginning, it'll be through an adapter. And then over time, our vehicle's charging port will move to what's called the North American charging standard, which was previously the Tesla standard, but they've now made an open standard. I think the thing to recognize is even as big as

Tesla's network is, we still need to build a lot more charging infrastructure. And so we're continuing to invest in our own network, what we call the Rivian Adventure Network. Today we have around 60 sites live. So we have hundreds of sites to build. But we really believe that having robust charging infrastructure, a few different suppliers or providers of that charging is going to become really important. And part of the agreement with Tesla is also to allow Tesla's, and for that matter, other vehicles, other brands, to use our network when we open our network up. And we think that will be important both for us to make sure our network's a profitable part of our business, but also to give, again, customers of all brands access to a lower risk and high confidence,

high uptime charging infrastructure. You know, what I really appreciate about your story is how hard it is. It's just, it's not a cookie brand. And for years, you had a team that was working on something in stealth. They couldn't talk about it. There was no product. It took, you know, seven years before you actually could show something at a, and people are like, what is this brand where to come from?

And I know that there's so much sort of obsessive thought put into every detail. I mean, the cars have flashlights that you pop out of the. the door and an air compressor inside a compartment in the car and, I mean, just all these things that are really, really cool. But the cost of building these cars is high. I mean, I believe that effectively, Rivian is subsidizing every vehicle, right? Because it costs more money than you actually are making from the sale. You lose money on every vehicle. So how do you cut costs on every car, but still maintain that obsessive kind of, you know, those quirky details and the things that make the car appealing to the customers you're going after.

Well, in the case of R1, you know, today the product is not gross margin positive. So today is in like middle of Q4, 2023. But there's a very clear roadmap for that to achieve very healthy margins. And the two big elements of that are one, we have to ramp production. So when you have a large-scale plant, as you talked about before, that's running, you know, at 10% of its capacity, which is about where we were a year ago. it's just wildly inefficient. So you get no fixed cost absorption. So that ramp is what we're experiencing now and we're starting to see significant improvement in the cost structure as a result of just much better fixed cost absorption. The other is the material cost side. So what are all the

components that we purchase to go into the vehicle? What do we pay for those? And it's worth calling out that when we negotiated a lot of these original contracts for our bill of materials, that was in like 2018, 2019. So our leverage was essentially zero. We had to beg the suppliers to work with us. And the expectation was always that when we launched, we would be able to then negotiate savings based upon the success. What we didn't anticipate was just how hard 2022 was we couldn't negotiate savings. We were begging just to get supply. That's changed a lot. We're now in a position where suppliers want to see us successful.

They're extremely excited about R2. And it's allowing us to make very significant reductions in the overall cost structure. So sort of like how airlines buy fuel in advance, you're now in a position to negotiate better rates for your supplies, which will drive the cost of each vehicle down. Exactly. Now, that's on R1. So R1 has inherent costs built into it, things like the speaker that pulls out of the center console or this, you know, this flashlight in the door. Some of those unique features will make their way into R2. But R2's also been, you know, with us as a more mature organization and having a lot more engineering resources than we had when we were developed. a lot of the core features in R1, we are optimizing heavily around cost for R2 to maintain, again, as much of what makes Erivene a rivian, but at a smaller footprint, so it's a smaller vehicle, and with simplified architecture, and with a completely different supply chain relationship,

where the level of leverage we have today is night and day. And probably the best way to anecdotally explain this is a lot of the sourcing decisions for R1 on sort of the bigger components, I would have to fly to go meet a supplier at one of their offices. The person I'd be meeting was maybe a vice president, but very often like a senior manager. And we would be begging to get them to say, yes, we'll supply you. This is before you produced the first. This is in like 2019. Yeah, because they were like, who are you? And what are you? Yeah. So they're with like a PowerPoint explaining who is Rivian. Here's what this thing's going to look like. Not a single customer yet. Today, those very same suppliers have their CEOs flying to normal Illinois or to California

to sit down and meet with our team and spend a whole day talking about how they can work with us as part of a broader relationship. So it's just like a completely different backdrop for how these contracts are being built for the supply chain for R2 versus what we had originally put in place for R1. You are an engineer. I mean, that's your background. But I think in the last couple years, you've had to focus more on public markets and being the face of a public company and raising money and managing a growing business.

I know recently you assumed responsibility for product development. What does that mean? Why did you take that portfolio on in addition to the other things you're doing? Since the very, very beginning, I've been deeply involved on product. It's the reason I started the company. It's my core area of... It's interesting, too. It's more interesting than raising money.

Yeah, it's a different part of your brain, for sure. Although they both take some creativity. It's sort of where I feel like I could create unique and distinct value for the business. And as the company has evolved, I've maintained half of the product team for a long time. And for a while, the current head of product and I've been working together to transition those responsible is directly to me and essentially have the full product organizations, so vehicle engineering, propulsion engineering, electronics, software, and then autonomy report up through me. And it allows me to be very close to the product.

But of course, it means I also need to have across the rest of the business a very strong team that allows me and enables me to be so product focused. I wonder, RJ, you know, you've got this. product that obviously you're really proud of. And you've seen customer satisfaction, right, is through the roof. And at the same time, there's an external narrative, right, in the newspapers and on TV of Rivian's challenges, Rivian's problems. Ford, which is a big investor in Rivian's stocks, sold nearly all of its shares. Amazon wrote down their shares. I mean, there's a, there has been this other narrative of like a Rivian struggling to keep up with orders and

struggling to keep its head above water. How do you keep the industry? How do you keep the industry? How do you keep the internal team motivated and excited when they're getting these external messages of like doom and gloom. So we do a company all hands every two weeks and it gives me a chance to talk about things relatively real time to what's happening, whether it be externally and very visible or things that are big milestones or challenges internally. And one of the things I've said multiple times to the team and we've talked about quite a bit is just the reality that building something like this, like Rivian, it's a very visible. company. It's not like we're building sort of obscure enterprise software. You see it in your neighborhood. It's a car. And the market shifted following our IPO to looking at high growth, high capital businesses like ours very differently. So we've seen a lot of volatility in our share price. And at the end of the day, if we continue to make products that customers absolutely adore

and for which there's growing and continually excited awareness, along with, driving our cost structure to a point where we have a very profitable business and then launching new products, all of that takes care of itself. And it's like that classic line of in the short term, the stock market can be a bit of a sort of voting machine. But in the long term, it's a weighing machine. It captures the weight of the value that you create. It's a classic Horn Buffett line. But I mean, the reality is, is we have to take the longer term view. And so we spend a lot of time making sure people recognize that. Now look, there's not a lot of like super clear scoreboards that exist in the corporate world and the public stock market is certainly one of those. So it's hard not to glance at the

scoreboard and say, boy, that doesn't feel appropriate to what we're building. But, you know, it's the job of myself and the rest of the leaders across the business to make sure we celebrate the wins, make sure we call out, you know, the excitement that we're seeing and with customers, make sure we we call out the awards we're receiving and keep our head down and just continue to execute. And I will say this, there's an element, and this is sort of, I think, implicit and embedded often in entrepreneurial companies or startups where it's more fun to be the underdog. So when you have these types of things happening, it's sort of like, well, great, let's go show them. You know, let's go, we know what we're building is great. And so that that percolates throughout the

organization's culture. Yeah. I can't tell you how many supplier visits I had in 2017 or 2018 were they said, do you want to build an electric truck? Who the heck wants to buy one of those? Yeah. So I think the organization is more resilient to that than you might think. Just because of it's how we grew up. We grew up around people doubting the likelihood of success. And we're seeing it translate into you hop on the drive home from work and you see 10 Rivians away home.

It's pretty clear that the product's doing well. We're going to take another quick break. But when we come back, more from RJ on the future of Rivian. Stay with us. I'm Guy Raz and you're listening to How I Built This Lab. Welcome back to How I Built This Lab. I'm Guy Raz. Here's more for my conversation with RJ Scorange, founder and CEO of Rivian.

We've had founders in the show who built products and then were surprised when they discovered who was buying them. The R1 vehicles are really positioned for adventure seekers, right? And there are all kinds of components in the car that make it really easy to go surfing or skiing or driving. into the mountains. Are you finding that that is your typical customer? Or are you finding like a suburban family wants the SUV because they can use it to take the kids to school? It's been for me just a remarkably fulfilling journey of seeing what we just very much decisively said we want to target in terms of our type of customer, you know, we'll pull in to what's been achieved. And there were a few core aspects of what we were targeting. Number one, and perhaps

most importantly, is we wanted to make sure that the customers that were attracted to our brand were new EV customers, meaning we wouldn't be accomplishing anything towards our sustainability objectives if our brand just simply slid customers from a Tesla over to a Rivian. Yeah. So it needs to be pulling people out of ice and therefore out of a much broader cross-section of vehicles. Internal combustion engines. Yeah, of internal combustion engine vehicles. Yeah. And so around 80% of our customers have never before owned an EV, which is awesome. The second thing we really wanted to achieve as a brand is to have a diverse set of customers, both in terms of background, demographic, even like political orientation.

And the reason for that is your early customers can often become defining for the brand. And it's a dangerous thing to have a sort of, if you think it almost like a monoculture of customers that then embody or become emblematic for what the brand stands for. it's much better to have a melting pot of consumers that are coming from all different angles and aligning around something bigger than just their own existing perspectives. Which really brings me to the last point, which is the something bigger for us was the desire as a brand to inspire consumers to be adventurous. When I say adventurous, it doesn't mean simply like climbing or mountain biking, but the idea of having a curious mindset to want to accumulate new experiences, that adventurous mindset, we think is one of the most remarkable human characteristics

is our desire to explore. It's our desire to try new things. And so that's been the one that's been for me the most fulfilling to see that we're really connecting with that. So I get all kinds of customer emails, but a couple of weeks got an email from a customer that said, starts off, thank you. And it was like, okay, good. This is a friendly email. That's good. But it goes on to describe how this person used to be very active. They used to enjoy skiing. They used to enjoy exploring. And life sort of got in the way and they found themselves like having a life that was not very adventurous. And they then said, I connected with the Reveen brand and I'm now, I've lost 80 pounds. Wow. I'm walking around my neighborhood. I'm going for jogs. And all this

stuff that's like, they connected it back to our brand, which was awesome because, you know, we're building vehicles, but if the brand that our vehicles represent is inspiring people to live a more full and a more inspired version of life, like, that's incredible. And so the echoes of that, what we see is the groups that are forming and the groups, they're very diverse sets of customers. So politically, as diverse as you can be, you know, different ages, different everything. And what they're lining around is this excitement for new experiences. Yeah, I think it's important to note that the three states with the most EVs are California, Texas, and Florida.

Not surprising them, the most populous. But still, I mean, Texas and Florida are not as politically liberal as California. I think people when they drive an EV, they realize it's just a better experience as a driver. Yeah. And I think we've, and that's an important point. you bring up, it's a lot of our customers are buying the product because they see it as a better product, not just simply because they're focused on the environment, carbon neutrality. Yeah.

But what we've been able to do is we've been able to make that path to carbon neutrality is something that's exciting and interesting. And I think that's really important for large-scale adoption. I recently read an article about Jensen Wong, the founder of Nvidia. And apparently he opens every meeting with a line that goes back to the early days. where he says we're 30 days out from going bankrupt. And it was true in 1997 when they bet the company on one product. But I think it tells you something about how they think, even though it's worth the $1.2 trillion, there's this mentality there that they are just a step away from it all going up at a puff of smoke. I know that when we last spoke, you had a lot of cash on hand in the bank. And you can see a path towards greater revenue growth, but you still are losing. money, do you bring some of that urgency and maybe fear isn't the right word, but yeah, but fear to the table when you're thinking about and talking to your team about how to grow and how to hit sustainability? Yeah, it's sort of implicit for us of how important it is to not only continue

to reduce cost, but also to continue to grow revenue and therefore achieve healthy, positive gross margin and then ultimately be a profitable business. I think the important point is making the urgency to continue driving that progress part of the culture is part of my role. It's part of the rest of the leadership team's role. But it's also making sure that it's that translates into useful actions. And what I mean by useful actions is the time skills need to be recognized that in a business as complex as this, it's not as if like tomorrow we can work hard. order and drive costs. And we need to think strategically. So it's like balancing the short term, medium term, and long term, and being really intentional around that and building trust between

functions that our supply chain team is doing their job, our delivery team is doing their job, and creating the visible accountability across those different functions. How do you personally deal with that level of stress? I mean, you're an engineer, so I imagine maybe you take a more methodical approach to things and you're just looking at the data. down, you're saying, well, this is the way it is, but maybe not. I mean, I can imagine if I was running your company, I wouldn't sleep. I would just be so stressed out all the time. There's certainly days that are more stressful than others. If you're looking at our company today and look at all the challenges that we have, I would look at it and say, this is the lowest risk

moment in Rivian's history. We have clear line of sight to profitability. The brand has connected in a way that we could have only dreamed of, you know, a few years ago. And so relative to what it looked like in 2018 or 2019 or for that matter, 2015 or 2014, I've only known a version of Rivian where there's always risk. And you reference Jensen's line. But it's, I think with Rivian, when the company started, it was one employee, me, starting a car company. The likelihood of success is, I don't know, one in a million, something like that. And so from a probabilistic point of view, there's a lot of challenges, but the sort of height of the cliffs we have to climb is far more understood and reasonable than what it looked like in years past. What do you do to just personally cope with that

stress? I mean, do you run every day? Do you have a routine or something that you do to make sure you know, you are healthy and managing that? I try to exercise frequently. For me, if I miss exercising or some sort of outdoor activity too many days in a row, I'd notice the quality of my thinking starts to degrade and the quality of my attitude, if you will, if my, my, like, mood isn't necessarily as optimistic or positive. So for me, that's a big part of it. I think the other thing that's often underappreciated is, like, building the resilience to block out some of the noise and all the idioms of, like, glasses have empty, glass out full. But the reality is, is there's any business is going to have lots of challenges. And it's really easy when you're on the

outside to look at this and say, boy, how are they going to overcome those challenges? And I just have the benefit of having gone through a lot. So reminding ourselves of what we've achieved and what we've overcome and keeping that front of mind as we look at the challenges in front of us, I think is really important. And the other thing is I do really believe it's a mindset. I read a letter every year to the whole company. And this year, actually, the sort of core focus of the letter was on mindset. And it's amazing. It's like remarkable what an impact your attitude can have on the exact same set of variables. So the exact same situation with a level of optimism, and I'm not saying blind optimism, but optimism with realism has versus a cynical or defeatist or negative attitude.

And it's like the outcomes are so different for the exact same situation. And it's much more fun to operate with that mindset. And so I bring that with me into everything that I'm working on. And it's fortunately, you know, become an embedded part of the culture as well. RJ Scringe, thanks so much for coming back on the show. Yeah, well, thank you. That's RJ Scorange, founder and CEO of Rivian. Hey, thanks so much for listening to the show this week. Please be sure to click the follow button on your podcast app so you never miss a new episode of the show.

And as always, it's free. This episode was researched and produced by Catherine Seifer with music composed by Rumtine Arableau. It was edited by John Isabella. Our audio engineer was Neil Rauch. Our production staff also includes Alex Chung, Carla Estevez, Casey Herman, Chris Mussini, Jay C. Howard, Kerry Thompson, Malia Agudelo, Neva Grant, and Sam Paulson. I'm Guy Raz, and you've been listening to How I Built This Lab. I sent you a feedback email a couple months ago, and I think this is a huge innovation that could happen in vehicles,

which is when you honk your horn to somebody, they think you're angry, but sometimes just warning them. You're just saying, hey, you know, heads up. You know, I'm in the, you're like in the grocery parking lot, and somebody's looking at their iPhone. I think there should be another horn. Yeah. Like a second and a friendly horn button. I think it's a great idea. So as I said to you in email, we're looking at that, a friendly horn. Maybe it could be my voice.

I can say, excuse me, pardon me.