Rivian is intensifying its push into autonomous driving, directly challenging Tesla’s dominance in the space with a bold new strategy centered on advanced hardware, lidar, and a subscription-based software model. At a recent event in Palo Alto, the electric vehicle maker unveiled its roadmap for achieving full self-driving capabilities, starting with the upcoming R2 model, its most affordable vehicle yet. The cornerstone of Rivian’s plan is the introduction of its new Gen 3 Autonomy hardware, which will feature an in-house-designed silicon chip. This marks a significant shift from Rivian’s current reliance on third-party chips from Nvidia and Qualcomm. The company says the new chip, built specifically for vision-centric AI, will be manufactured by TSMC and is currently undergoing validation. It is expected to be integrated into the R2 by the end of 2026. Rivian’s move mirrors Tesla’s long-standing strategy of developing custom AI chips, with the company’s AI3 and AI4 chips already in use. Tesla’s next-generation AI5 chip is expected to be 40 times more powerful than its predecessor, and Rivian is aiming to match that pace of innovation with its own in-house technology. A key differentiator in Rivian’s approach is its decision to include lidar in the R2. Unlike Tesla, which has consistently rejected lidar in favor of camera-only systems, Rivian is embracing the sensor as a critical component for safety and redundancy. The lidar unit is discreetly positioned above the windshield, with Rivian collaborating with a third party on its exterior integration. While the company hasn’t disclosed a timeline for achieving Level 4 autonomy—where vehicles operate without driver supervision—it emphasized that the hardware is designed with that goal in mind. In the near term, Rivian will roll out enhanced driver assistance features, including hands-free driving on over 3.5 million miles of roads across the U.S. and Canada, particularly on roads with clear lane markings. This capability will not be available on all roads and will initially require driver supervision. Rivian is also adopting Tesla’s Full Self-Driving (FSD) subscription model with its own offering, Autonomy+. It will launch in early 2026 at $49.99 per month or a one-time payment of $2,500—significantly cheaper than Tesla’s $99 monthly or $8,000 upfront fee. The software will include point-to-point navigation, eyes-off driving, and personalized Level 4 capabilities, with continuous over-the-air updates. Rivian is also introducing an AI voice assistant, set to debut in early 2026 on Gen 1 and Gen 2 R1 vehicles. The assistant will allow drivers to control features like seat heaters, access Google Calendar, and receive vehicle diagnostics through natural language commands. It will also be capable of connecting to third-party apps, expanding its functionality. CEO RJ Scaringe hinted at broader ambitions, including potential robotaxi applications, stating the technology opens doors in the rideshare space. With its combination of lidar, in-house chips, and a competitive software pricing model, Rivian is positioning itself as a serious contender in the race for fully autonomous vehicles—directly challenging Tesla’s long-held leadership in the field.