Rivian reported their Q3 2024 earnings. Revenue was $874M and it resulted in a loss of -$1.1B. It improved from -$1.367B last year same quarter. Rivian is still losing money for each vehicle it sells. They reaffirmed 2024 full year delivery of 50,500 to 52,000 vehicles. They remain on track for positive gross profit for 2024. Gross profit is revenue subtract the cost of goods. They made 13,157 vehicles and delivered 10,018 in Q3 2024.
Rivian launched a Tri-Motor R1 with 0-60mph 2.9s and range up to 405 miles. In 2025, they plan to launch a new Quad-Motor with two smaller motors in front to get to 0-60mph in 2.5s and 1,025 horsepower. These specs are slightly better than Tesla’s Cybertruck Cyberbeast Tri motor which goes 0-60mph in 2.6s with range of 301 miles and extendable to 415 miles with $16k Range Extender option. The new Rivian vehicles have Conserve mode. The rear motors can auto disconnect from driving the wheels when vehicle is just cruising and performance is not needed. Rivian’s motors are oil-cooled and have good thermal performance for high torque and high efficiency.
Cash
Available cash decreased to $5.396B from $7.857B. Without positive income generation, Rivian has to use cash at an alarming rate. The $5B VW partnership will help ensure Rivian get to produce the R2 and become profitable. The $5B will not be given out all at once. It will receive initial $1B as convertible note from VW in December 1 2024 pending regulatory approval. Two tranches of $1B each expected in 2025 and 2026 in form of Rivian stock issuance. $2B will be at payment in new JV and a loan to given out in 2026.
Expenses
Rivian’s operating expenses for Q3 2024 has decreased to $777M. It was $963M last year.
R&D expense decreased to $350M from $529M last year.
SG&A expenses slightly decreased to $427M from $434M.
Capital expense rose to $277M from $190M. This may be related to preparation for R2 next gen vehicle.
vw partnership and cost reductions
Rivian expenses are high and it is losing money for the vehicles it is currently making. This trajectory must be corrected to avoid bankruptcy. Rivian has extended its runway by partnering with VW on a joint venture for EV software. Rivian receives $5B from VW.
Demo drives is up 20% for R1 vs Q2 2024. Q3 suffered production disruption. They could not make enough of their in house Enduro motor due to a shortage of a component within the motor.
Rivian has lowered material cost by 20% for its R1 Dual Motor with Large Pack compared to Q4 2024 vs Q1 2024.
Next Gen Vehicle update
Rivian’s next gen lower cost $45,000 R2 vehicle will help Rivian expand its TAM and become profitable. An R2 large pack is expected to have 300 miles range. R2 comes in single motor, dual motor and tri motor. The $45,000 version is likely a single motor version. Rivian has completed 85% of sourcing bill of material for R2 AWD Large. They project it will be 45% lower cost than a R1 Dual Large vehicle. R2 will partner with LG Energy Solution (LGES) to supply 4695 structural cylindrical batteries from its US Queen Creek Arizona plant. These batteries makes the R2 IRA compliant and qualify for $7,500 incentive. ( Assuming IRA stays in the new Trump administration). Tesla’s batteries are 4680. This makes LG batter slightly bigger than Teslas. The larger batteries help Rivian reduce cell count when making a battery pack. R2 is expecting first customer delivery in first half of 2026. The R2 will compete with Tesla Model Y. A Tesla Model Y Long Range All -Wheel Drive costs $48,000 in the US at the time of this writing. The single motor Model Y Long Range Rear-Wheel Drive is $44,990 and has 337 miles range . Tesla only sells the long range version. If Rivian’s $45,000 is a single motor and small pack, it will have shorter range than a Tesla Model Y. Tesla Model Y will have a price and performance advantage. The Model Y does not have a tri motor option.
Sources:
https://rivian.com/newsroom/article/rivian-announces-mid-sized-platform
https://rivian.com/newsroom/article/rivian-and-volkswagen-group-announce-plans-for-joint-venture