Release Date: November 07, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Rivian Automotive Inc (NASDAQ:RIVN) achieved a 20% reduction in material costs for their second-generation R1 platform compared to the first generation.

• The company produced 13,157 vehicles and delivered 10,018 vehicles in Q3 2024, generating $874 million in revenue.

• Rivian Automotive Inc (NASDAQ:RIVN) is on track to launch the R2 program with a starting price of $45,000, aiming for a substantial reduction in costs and maintaining strong market share.

• The partnership with Volkswagen is progressing well, with a joint venture expected to close by the end of Q4 2024, providing additional capital for growth.

• Rivian Automotive Inc (NASDAQ:RIVN) expects to achieve a modest GAAP gross profit in Q4 2024, driven by increased revenue per unit and improved cost efficiencies.

Negative Points

• Rivian Automotive Inc (NASDAQ:RIVN) faced significant supply chain challenges in Q3 2024, impacting production and leading to a gross loss of $392 million.

• The company experienced a decrease in Q3 deliveries due to production disruptions and a challenging consumer environment.

• Rivian Automotive Inc (NASDAQ:RIVN) revised its 2024 annual adjusted EBITDA guidance to a loss between $2.825 billion and $2.875 billion due to lower production volumes.

• The company is dealing with a component shortage affecting the production of Endura motors, impacting their ability to meet production targets.

• Rivian Automotive Inc (NASDAQ:RIVN) anticipates a shutdown in 2025 for plant upgrades, which may affect production continuity.

Q & A Highlights

• Warning! GuruFocus has detected 4 Warning Signs with RIVN.

Q: Can you comment on the improvements in gross profit and the implications for unit economics on the R1? How should we think about it for 2025? A: Claire McDonough, CFO: One of the primary drivers of improvement in gross profit is the growth in revenue per unit, driven by $300 million in regulatory credit sales and improvements in average selling prices. For 2025, we will launch our quad motor offering, which will also drive ASP increases. We are targeting a positive gross profit for 2025, but will provide more details in our Q4 earnings call.

Q: What percentage of your volume in the quarter was preordered versus sold out of dealer inventory, and how is that changing? A: Claire McDonough, CFO: In Q3, we saw an uptick in early preorder pricing volumes as customers utilized early lower pricing to purchase Gen 1 vehicles. Lease penetration was 42%, and most of our customers don't qualify for the $7,500 tax credit on financed or cash purchases.