Rivian Remains on Track for Positive Gross Profit for Q4 2024

On November 7, Rivian Automotive, Inc. reported solid third-quarter results for 2024, producing 13,157 vehicles and delivering 10,018 from its Normal, Illinois manufacturing facility. The company anticipates achieving positive gross profit in Q4, driven by improvements in unit economics.

Key factors include increased revenue per vehicle, resulting from a higher sale of regulatory credits and a shift towards more premium variants of its R1 vehicles, as well as reductions in material costs and enhanced operational efficiencies.

Rivian is also advancing in the development of its R2 platform, targeted for launch in the first half of 2026. The R2 is being designed for cost efficiency and ease of manufacturing without compromising Rivian’s commitment to performance and utility. 85% of the materials required for the R2 have been secured within Rivian’s cost targets, signaling strong progress in achieving affordability goals as it broadens its market reach.

For Q3 2024, Rivian reported total revenues of $874 million, driven by the delivery of 10,018 vehicles, with an additional $8 million from regulatory credit sales. The company’s gross profit was negative $(392) million, an improvement over the $(477) million loss in Q3 2023. Costs included $37 million in efficiency initiatives that are not expected to persist long-term.

Operating expenses decreased to $777 million from $963 million in Q3 2023, partly due to lower stock-based compensation ($105 million, down from $219 million) and depreciation expenses ($73 million, down from $80 million). Net loss was $(1,100) million, compared to $(1,367) million in the same period last year, while adjusted EBITDA showed improvement at $(757) million, up from $(902) million.

Capital expenditures rose to $277 million from $190 million last year. Rivian ended the quarter with $6.739 billion in cash and equivalents, or $8.105 billion including its revolving credit facility. This liquidity includes a $1 billion unsecured convertible note from Volkswagen, expected to convert into shares in December.

RJ Scaringe, Rivian Founder and CEO, said: “This quarter we have made progress against our key objectives and have seen meaningful progress on our Gen 2 R1 cost structure due to the new technologies incorporated into the vehicle and manufacturing process. We are excited about the future and our midsize SUV, R2, which we believe will be a fundamental driver of Rivian’s growth. We’re also looking forward to closing our proposed joint venture with Volkswagen Group which is expected in the fourth quarter.”

Rivian Is Announced a Strategic Supply Agreement With LG Energy Solution

Rivian has announced a strategic supply partnership with LG Energy Solution (LGES) to support its upcoming R2 midsize SUV with advanced cylindrical 46 series battery cells (4695 cells). Production for these batteries is planned at LGES’s Queen Creek, Arizona facility, ensuring alignment with the U.S. domestic manufacturing focus and Inflation Reduction Act (IRA) compliance. This supply agreement is a crucial step for Rivian as it advances toward its R2 platform, targeting a 2026 launch with cost-effective and high-performing battery solutions.

The 46 series cylindrical batteries, specifically the 4695 model, mark a significant advancement for EV technology, boasting six times the energy capacity of the more common 2170 batteries. With a 46mm diameter and 95mm height, these batteries enhance energy density and space efficiency while improving safety—a major focus in the industry due to how EV batteries respond in crashes.

For Rivian, the adoption of 4695 batteries aligns with its goals for the upcoming R2 model and beyond. The larger capacity and energy density of these cells are expected to extend vehicle range, bolster durability, and increase overall efficiency. Additionally, the streamlined design of the 4695 cells allows Rivian to reduce the number of parts required per vehicle, thereby simplifying production and reducing costs. These efficiencies could help Rivian offer more affordable EV options to consumers while maintaining high performance, a key part of Rivian’s strategy to expand its market reach and drive long-term growth.

Innovative Second-generation Tri-Motor Configuration for R1 Vehicles

This quarter, Rivian also introduced the second-generation Tri-Motor configuration for its R1 vehicles, blending the power of two in-house Ascent motors in the rear and one Enduro motor in the front. With 850 horsepower and 1,103 lb-ft of torque, the Tri-Motor R1 achieves a remarkable 0-60 mph time of 2.9 seconds, exceeding the performance of its original Quad-Motor models.

However, Rivian is facing a production disruption due to a shortage of a critical component in its Enduro motor system, affecting the R1 and RCV platforms. Consequently, Rivian has lowered its 2024 production guidance to between 47,000 and 49,000 vehicles and adjusted its expected annual EBITDA loss to between $(2.825) billion and $(2.875) billion. Despite this, Rivian reaffirms its delivery target of 50,500 to 52,000 vehicles and a $1.2 billion capital expenditure outlook for the year.

VW Joint Venture

Rivian’s joint venture initiative with Volkswagen leverages its zonal network architecture and full-stack software technologies, marks a significant milestone. This partnership will not only reinforce Rivian’s technology leadership but also open doors for collaboration with other manufacturers, expanding Rivian’s role as a tech partner in the EV industry.

Further enhancing its consumer offering, Rivian launched Connect+ in August, a subscription-based streaming and connectivity service that seamlessly integrates with Rivian’s in-car display. With an initial 60-day free trial, Connect+ has seen high conversion rates as customers adopt the enhanced connectivity features and new apps available through Rivian’s software platform.