The economics of autonomy are shifting dramatically at Rivian, where lidar—once prohibitively expensive for mass-market vehicles—is now becoming what one executive calls a “no-brainer” for integration into future electric vehicles. This represents a significant shift in the autonomous driving landscape, where strategic technology choices can make or break a company’s position in the increasingly competitive self-driving race.
According to Rivian’s hardware engineering director Chris Stevens, lidar sensors that once cost around $75,000 per unit just a few years ago have plummeted to approximately $1,000 today. This 98% price reduction is transforming how Rivian approaches its autonomous driving strategy for 2025 and beyond.
“The cost has come down so dramatically that it’s almost a no-brainer to include it in the sensor suite,” Stevens told Business Insider during a recent interview. This cost trajectory allows Rivian to potentially leapfrog competitors who have chosen different technological paths for their autonomous systems.
Lidar (Light Detection and Ranging) uses laser pulses to create precise, three-dimensional maps of a vehicle’s surroundings. The technology provides crucial depth perception and object recognition capabilities that complement cameras and radar, especially in challenging weather conditions or low-light environments where visual sensors alone might struggle.
The precipitous cost drop is largely due to manufacturers shifting from mechanical spinning lidar units to solid-state versions with fewer moving parts. Companies like Luminar and Innoviz have pioneered these advancements, with Luminar recently announcing its “Iris” lidar will cost less than $1,000 in volume production.
This technical evolution is occurring as Rivian prepares its next generation of electric vehicles. The company has been methodically building its driver assistance capabilities, recently expanding its Highway Assist feature that offers hands-free driving on select highways across North America.
Rivian’s approach stands in stark contrast to Tesla, which famously rejected lidar in favor of a camera-centric “vision-only” autonomous strategy. Tesla CEO Elon Musk has repeatedly dismissed lidar as a “fool’s errand” and “unnecessary,” arguing that humans drive using vision alone, so vehicles should be able to achieve the same feat.
The debate between sensor fusion (using multiple types of sensors including lidar) versus vision-only approaches has divided the autonomous vehicle industry for years. While Tesla has made significant strides with its camera-based system, many experts maintain that redundancy across different sensor types provides crucial safety margins.
“Having multiple sensing modalities that operate on different physical principles gives you the best chance at a robust perception system,” explains Sam Abuelsamid, principal analyst at Guidehouse Insights. “When one sensor type struggles in certain conditions, others can compensate.”
The timing of Rivian’s lidar strategy aligns with broader industry trends. While high-end vehicles from Mercedes-Benz and BMW already incorporate lidar for advanced driver assistance systems, the technology’s declining cost curve means it could soon reach more mainstream price points.
For Rivian, which positions itself at the premium end of the electric vehicle market with adventure-focused models, adding lidar may help justify higher price points while delivering tangible safety benefits. The company’s R1S SUV and R1T pickup truck already command starting prices above $70,000.
Beyond the immediate cost considerations, Rivian appears to be playing a long game with autonomous technology. The company hired Kelly Flanigan, formerly a senior director at Google’s self-driving subsidiary Waymo, to lead its autonomy team in 2022—signaling serious intentions in this space.
The company has been relatively measured in its autonomous driving claims compared to some competitors, focusing on gradual, validated improvements rather than splashy promises. This methodical approach may serve Rivian well as regulatory scrutiny of autonomous systems intensifies following high-profile incidents involving other manufacturers’ systems.
Rivian’s current Highway Assist feature requires active driver supervision, using a combination of cameras, radar, and ultrasonic sensors along with driver monitoring to ensure attention remains on the road. The potential addition of lidar would enhance this system’s capabilities while potentially accelerating the path to more advanced autonomy levels.
Industry watchers note that Rivian’s strategy reflects a pragmatic understanding of both technological and market realities. “The autonomous driving space is settling into a pattern where different approaches make sense for different vehicle segments and use cases,” notes Mike Ramsey, automotive analyst at Gartner. “Premium vehicles benefit from having the most comprehensive sensor packages available.”
As 2025 approaches, Rivian’s lidar strategy could help differentiate its offerings in an increasingly crowded electric vehicle marketplace where software capabilities and autonomous features are becoming key purchasing factors for tech-savvy consumers. With production challenges largely behind it and a clearer path to profitability emerging, Rivian appears positioned to make technology investments that could yield significant competitive advantages in the years ahead.
