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Why Rivian’s R2 LiDAR Timeline Risks the Osborne Effect
With Rivian confirming that LiDAR is coming to R2 in late 2026, but also making it clear that R2 deliveries begin in early 2026 without it, there’s an interesting business dynamic worth talking about, the Osborne effect.
The Osborne effect is a classic concept in tech. It happens when a company announces a future product or major upgrade too early, causing customers to delay or cancel purchases of the current version. The name comes from Osborne Computer Corporation in the early 1980s, which prematurely announced a next-generation computer. Customers stopped buying the current model, sales collapsed, and the company never recovered.
In simple terms, if buyers know something better is coming soon, many will wait. That’s why Rivian’s LiDAR timing matters.
R2 is expected to be Rivian’s highest volume vehicle by far, aimed squarely at mainstream buyers who care about technology longevity. By confirming that LiDAR will arrive roughly 9 to 12 months after launch, Rivian is walking a tightrope. On one hand, transparency builds trust. On the other, it risks giving potential buyers a reason to pause their purchase.
For some shoppers, the logic will be straightforward. Why buy an R2 in early 2026 if a more advanced autonomy hardware stack is coming later in the year? Even if Rivian promises strong camera and radar based autonomy at launch, LiDAR carries a perception of being more future proof, especially for hands-free and higher levels of autonomy.
This is exactly where the Osborne effect creeps in.
Rivian likely knows this risk, which is why they framed the announcement carefully. They emphasized that R2 launches with a capable Gen 2 autonomy computer and that LiDAR is an enhancement, not a requirement for early features. Universal hands-free driving still launches without LiDAR. More advanced capabilities arrive later.
In other words, Rivian is trying to prevent buyers from thinking early R2s are incomplete.
Still, there will absolutely be a subset of buyers who wait. That’s unavoidable. Tech-savvy consumers follow these announcements closely, and Rivian’s audience tends to be more informed than average. Some will delay orders specifically to get LiDAR hardware baked in from day one, even if it means waiting into late 2026 or 2027.
The flip side is that Rivian almost had to announce this now.
Autonomy Day set expectations. Rivian is competing not just with traditional automakers, but with Tesla, which constantly sells the promise of future autonomy. Staying silent about LiDAR could have backfired just as badly once leaks or sightings surfaced. By owning the narrative early, Rivian controls expectations instead of letting speculation spiral.
My take is that Rivian is accepting a small, calculated Osborne effect in exchange for long-term credibility. R2’s price point, design, and overall value proposition will still pull in plenty of early buyers who don’t want to wait. At the same time, Rivian plants a flag that R2 has a clear autonomy upgrade path, something many buyers care deeply about.
This isn’t Osborne Computer Corporation in the 1980s. Rivian isn’t replacing R2 with a new vehicle, they’re evolving it. The risk is real, but manageable, and arguably the right call for a brand trying to play the long game in autonomy.
The real test will be whether Rivian can make the non-LiDAR R2 feel genuinely future-ready from day one. If they pull that off, most buyers won’t wait. If they don’t, the Osborne effect could become more than just a business school example.
I lost track in the presentation. Is LiDAR going to require the Gen3 processors or was the Gen3 computing a future future? Could LiDAR be a Gesr-Shop optional add-on/plug-in for these initial R2s?
If they are clear that personal L4 autonomy is possible and enabled without it, then there’s little downside to being an early adopter.
If on the other hand LiDAR is a prerequisite for personal L4….. I know I’ll wait.
I would not trust Rivian on that at this point. They love making claims about what is possible but leave themselves plenty of wiggle room for why it won’t happen. I would not be at all shocked if all of a sudden R2’s without LIDAR can’t do something Rivian said they would be able to do.
My Guess is they make the launch addition with lots of extras, maybe free Autonomy + and some other stuff. to make it hard to pass up
My guess is that the announcement helps slow initial sales, which in-turn helps with the inevitable bottle neck of production ramp up. 9 months down the road demand will increase for those holding out for gen3 (and/or more affordable options) just as production ramps up. Brilliant! My guess is there will be a launch version that will offer some perks that make it appealing for early adopters.
One thing nobody seems to be bringing up – don’t you think lidar could be an extra charge? Like an autonomy package or something. We might see them say that the package won’t be available until late 2026.
And as a counter question, how much is saved by not installing MobileEye hardware and its hidden subscription that Rivian was paying in the background for all Gen1 trucks
Rivian likely will need most of 2026 to ramp up to the full 12,000 a month R2s that they claim capacity for (eventually) in Normal, and also service centers will need to ramp up to handle so many more customers. So, some customers delaying until 2027, or late 2026, in order to get lidar is probably a fine thing. It will leave Rivian with a situation similar to Gen 1 R1s that are incapable of the latest autonomy…but that’s also an upgrade incentive. Managed properly, with expectations set as during Autonomy day, it can be just fine, with those needing a vehicle in 2026, or caring less about full lidar autonomy, knowing what they’re in for, and accepting it upfront, rather than feeling duped later (as the article points out). Rivian just needs enough demand on 2026 to match the ramp up, and give investors (and VW, source of bridge loans) confidence. Trying to achieve too high sales too quickly, before the ability to scale service and iron out production and design issues, could backfire. Now through the end of the decade is, if all goes well, likely a matter of scaling up enough each year, and repeatedly showing enough of the future roadmap with enough credibility, to keep investors (and VW) sufficiently happy and onboard. Good enough sales (and, importantly, reviews) in 2026. Scale to 12,000 R2 a month sometime in 2027, and start delivering vehicles with lidar. Show the Georgia factory starting to come online in 2028, with more teasers of R3*, and ongoing improvements in hand free, maybe teasers of true lidar level autonomy. R3 and the Georgia plant ramp in 2029. Progress each quarter for the decade, rather than massive jumps. Osborne effect ok to a degree, if properly managed, as nowadays everyone knows that there will always be a better mousetrap next year.
It really doesn’t matter. Rivian is bankrupt before the decade ends.
Haha okay John… if that’s even your real name 😉
I’d put money against that any day. Once the R2 drops they’re going to be in excellent shape.
Ok, I’m in the middle ground on this… I think that Rivian has some real opportunity, and a good backer in VW, and a good customer in Amazon. But also has a lot to achieve the rest of the decade, against a moving competitive background. R2 is necessary but, with Normal’s production capacity, not sufficient until Georgia comes online. A string of successes will be needed…R2, scale service, Georgia factory, R3*. I have a few shares. Not all in. ymmv
Thought of this immediately and realized. They will just raise the price… and it will be warranted given the new value
And/or it’ll only come on the higher end tri models (which are late 26 also, no?). So the dual won’t be affected one way or another
At first, I was alone too, and then I just realized there’s no way RJ with his PhD came this far just to fumble it at the goal line
Given the slow ramp up, they’ll likely only make 20-30k R2’s next year (I hope 50k but let’s be realistic). I will keep my order just to support them and get a dual without LiDAR and lease it! In VA no property tax on electric, with that gas and cheaper insurance I’ll still save money compared to my v8tt x5
What in the world are you talking about? “In VA no property tax on electric”?
Please don’t spread incorrect information, we have enough of that in the world. Don’t generalize that the whole state of VA doesn’t have property taxes.
VA *most definitely* has LOCALITIES with property tax on EVs
Haha yep I was wrong just looked it up! It’s just a reduced property tax, darn.
Thanks for clarifying. Not gonna lie tho, still getting an early R2 lol, has no bearing on my point about the LiDAR pricing or the article?
While I am not an R2 reservation holder (currently own and am quite happy with my G1 R1S Launch Edition) I would absolutely not take an R2 without LIDAR now that I know it will be coming eventually. My experience with Rivian’s bait and switch on the R1 (first the pricing and then the self-driving) shows that they cannot be trusted to do what they say they are going to do. Any promise that a R2 without LIDAR will do everything a R2 with LIDAR will do is worthless IMO.
As Jose commented (roughly), you don’t buy something for what it is going to do in the future, you buy it for what it can do today. While those words are 100% true, they are also (no offense meant Jose), crap. If someone tells you they are going to do something they should do it. Sure, there are all sorts of reasons why Rivian does not *have* to do what they said (e.g. automatic lane changes in G1) – I’m sure the contracts are written extremely carefully after what Tesla had to deal with, but that doesn’t make it right.
For good or for bad, Rivian is a public company whose only job is to make money for shareholders (something it hasn’t been doing so well on either and as a IPO stock investor it kind of sucks, but I digress) and doing the “right” thing only matters if it will increase shareholder value (and I will absolutely give them credit for honoring the pre-IPO pricing even if it took a massive amount of bad PR and huge pressure campaign to get it done). Of course, one could make an argument that telling your early adopters that they need to go spend $100k to get what you told them they would get in the first place might not be a great way to increase shareholder value.
While only time will tell, many people who start companies are not great at running companies as they grow. It takes very different skill sets to get from $0 to $1,000,000 than from $1,000,000 to $100,000,00 than from $100,000,00 to $1,000,000,000. That doesn’t mean someone who is good at the first won’t be good at the second or third but it also does not mean that they automatically will be. RJ did a great job getting Rivian started and selling vehicles and maybe he is the right person to lead the company through it’s next phase. But based on all that I hear about RJ running marketing, RJ telling existing G1 owners sucks to be them, RJ telling people all about the great thing coming next, etc. I’m not convinced that is true anymore.
100% I will be waiting for this class action lawsuit.
They have lost my trust. Next car will be a Tesla. At least they have a reputation vs Rivian just starting to get one.
They have done the same for longer one many data points: 1) Their mileage and range scandal in 2023 2) The FSD and HW backwards compatibility promises of the last decade. 3) The large degree they update their model pricing up/down.
Not to mention that supporting Tesla also supports certain ideologies that aren’t the most accurate or compassionate.
As a Gen 1 R1T owner and early preorder reservation, I didnt buy the truck for its ADAS. I do wish it could do more, but going in Rivian was behind. I do intend to get an R3X and will surely wait for the ADAS to get fully baked before I do. It is nice but the R1 gives in other ways. I am more excited about the AI assitant.
Their stretch goal was probably to have Gen3 ACM ready in time for R2 rollout. Didn’t happen, and the alternative of delaying R2 rollout would have been fatal. And just saying that R2 Gen1 would only have Gen2 ACM would also have been fatal. Rock and hard place.
I have an R2 reservation – I’m actually fine with Gen2 ACM. Frankly, Eyes-off and Personal L4 will take a good year or more of real-world feedback *after* they roll out before I would trust them. I plan to get the R2 on a 2-year lease, so when it comes off that lease I’d be ready look at the R2 (or R1 Gen3) with the Gen3 ACM. Timing actually works well for me. Point-to-point, Universal Hands-free and AI agent would suffice for what I need in the near term, both for the R2 and my R1S Gen2.
They made the right call for me. They are crossing their fingers that people in my situation are the majority. We should be able to tell about a year from now.
Jose – can’t you clarify this as there is some debate. Rivian said LIDAR would be enabled in late 2026. Any chance that means the first R2s will come off the line with the hardware and they’ll just wait for a software update to take advantage? Seems very strange to me that we’ve seen no pre-production models without the hardware LIDAR installed and that what goes to the factory will be something different. Hoping your connections can confirm.
Per Rivian, the first R2s off the line will not have the hardware or ability to retrofit. Its as weird to me as it is to you.
At first I felt very weird about this however after going back and watching the event over I’m more at peace with it lol.
1. For the short term Lidar integration benefits Rivian and the overall ecosystem rather than the individual consumer. The individual perk is long term “expectation” that you will be future proofed for further enhancements or capabilities of level 3 autonomy and beyond. This is followed by the new computer system and chip which I actually think is the bigger elephant in the room. However like most case situations, that expectation is usually watered down because it’s based on “perceived” not yet attained projections. By that time they will realize that they need 20 cameras, a new current advance 3 processor system and tech, and all perceived advantages will generally fall short at time of full implementation in comparison to what will be the current tech.
2. I absolutely predict that there will be a paywall or package category. The first release will not be 45K yet they will not be maxed out. They will be the sweat spot on price and package offerings/capabilities. Then the later more expensive packages will come dangling tri-motor, lidar, new processor, etc. I also do not believe every R2 at the lower end 45k price will get lidar.
3. Every vehicle we buy is outdated after purchase. Every manufacturer generally adds some new enhancement or capability year over year in effort to sell the newer sometimes higher priced model. Rivian is no different. If you think R2 without lidar will be obsolete and outdated what about the person with a gas car, non zonal architecture, etc. That doesn’t stop them from selling/ buying those vehicles. Autonomy driving is only one factor, as I believe a max battery is a larger consumer target area.
Lastly I think no later than February we will have a very clear picture of the pricing structure and packages.
Jose, it would be interesting to know how many people pull their R2 orders and wait for the Gen3 hardware update in 2026 . Is there a way you can do a survey on the web site? You
Great write up Jose! I was puzzled … noting how Gen1 R1 has not been getting any driver assistance features updates due to g1 system limitations, and with current updates focusing on Gen2 due to system flexibility… the same will probably apply to Gen3. When g3 comes out, g2 will stop getting major updates probably early 2027. So unless you are pressed to buy a vehicle now, why not just wait till 2027-2028 to get a somewhat future capable system. Might even have a friendlier policy climate in DC by then to see if tax benefits come back. Anyways… Great post dude.
I was not aware of the Osborne Effect and so am glad to be better informed. That being said, the more of you who wait the better, it’ll move me up in the cue of reservation holders. Is there such a thing as the Retro-Osborne Effect?
I personally could not care less about LidAR or enhanced autonomy of my vehicle and will gladly place my order for the earliest possible R2 available. Happy New Year!