Rivian Self-Driving Chip Surpasses Tesla's at Lower Cost
By Reuters | 11 Dec, 2025

The Rivian Autonomy Processor enables Level 4 autonomy in the near future using a system that combines lidar input and its proprietary Large Driving Model.

Rivian Automotive on Thursday unveiled its first custom computer chip for self-driving, shifting away from Nvidia's processors, and a new paid driver-assistance package called Autonomy+ with prices far below those of rival Tesla.

Shares of the pickup truck and SUV maker were down about 8% in afternoon trading, their biggest percentage decline in nearly a year.

The announcements, made at Rivian's first Autonomy and AI Day, come as carmakers worldwide pour billions into AI systems that power long-awaited self-driving technologies that have faced several technical challenges.

Rivian said its longer-term goal is Level 4 autonomy, in which a vehicle can operate without human input in certain conditions, and that its new foundational AI model trained on vast amounts of real and simulated driving data, called the Large Driving Model, will underpin those efforts.

The new in-house chip, called the Rivian Autonomy Processor, will boost the vehicles' capacity to process data from cameras, LIDAR and other sensors, key to achieving its target of higher levels of autonomous driving.

The company's deep vertical integration is costly at low production levels but becomes a major cost advantage at scale by eliminating supplier margins and tailoring components to its needs, CEO RJ Scaringe told Reuters.

"I think the question is when will we want to license it and in what structure? But we absolutely see this as an opportunity."

Tesla, too, develops its own AI chips, produced by Samsung and Taiwan Semiconductor Manufacturing Co. TSMC is the manufacturing partner for Rivian's new chip.

"Developing custom silicon is capital-intensive, but it's the right long-term play. Apparently they've already been making investments for several years, so I wouldn't expect any big jumps in costs," said Vitaly Golomb, managing partner at Mavka Capital and a Rivian investor.

Vidya Rajagopalan, senior vice president at Rivian, said the company expects that "at launch in late 2026, this will be the most powerful combination of sensors and inference compute in consumer vehicles in North America."

Driver-assistance package Autonomy+, priced at $2,500 in a one-time payment, or $49.99 per month, will include a Universal Hands-Free feature that works on more than 3.5 million miles of roads across the U.S. and Canada. The price is significantly lower than Tesla's $8,000 to buy its Full Self-Driving system outright, or $99 per month as a subscription.

Rivian also said it will add LIDAR sensors for three-dimensional mapping to its next-generation R2 models, improving their ability to identify obstacles and road conditions. The approach mirrors that of Alphabet's Waymo.

Its chip and driving model efforts will help Rivian expand hands-free driving capabilities later this month and roll out point-to-point autonomous driving next year, Scaringe said. The company expects to launch "eyes-off" functionality in 2026.

Rivian also introduced an AI assistant that it says can manage some vehicle functions, sync with apps and flag potential repair issues.

(Reporting by Akash Sriram in Bengaluru and Abhirup Roy in Palo Alto; Editing by Sahal Muhammed, Shailesh Kuber and Alan Barona)