Cost control, profit outlook and VW deal in focus

Rivian will provide investors with a second-quarter financial update as the pure adventure electric vehicle maker aims to make its production more efficient while preparing for its mass-market electric vehicle launches in two years.

For the quarter, Rivian is expected to report revenue of $1.165 billion, according to Times Of Update consensus, up a substantial 76% from last year. That revenue increase won’t translate into a profit just yet, with the company expected to report an adjusted loss per share of $1.20, with an adjusted net loss of $1.194 billion. Operating income is expected to be slightly lower, with a loss of $1.371 billion and EBITDA of -$892.3 million.

In the latest quarter, Rivian reaffirmed its adjusted EBITDA loss guidance of $2.7 billion for 2024, but now expects its capital expenditures to improve to $1.2 billion from $1.75 billion previously. Rivian said this is due to the company moving the start of R2 production to its Normal, Illinois, plant and further cost savings planned in 2025 and 2026. Investors will be looking to see if these loss projections improve for the remainder of the year.

Investors will also be paying attention to updates to Rivian’s full-year profitability metrics. In its first-quarter report, the company said that due to its upgrade and other improvements, Rivian remains “confident in its path to achieve modest gross profit in the fourth quarter of this year.”

Tooling upgrades have impacted Rivian’s second-quarter deliveries. Last month, the company reported producing 9,612 vehicles Rivian produced 13,790 vehicles at its regular assembly plant and delivered 13,980 vehicles. Both figures are down from 13,980 produced and 13,588 delivered in the first quarter. Rivian said its production and deliveries in the second quarter will be “inconsistent” due to plant shutdowns required for retooling.

Rivian’s updated R1T and R1S models could be a driver of new sales, as could its continued aggressive financing of its vehicles through leases. Those new vehicles were available to order starting in June, the company said.

This may have led Rivian to reaffirm its annual production forecast of 57,000 total vehicles, despite the decline in the number of vehicles produced in the second quarter.

Strengthening Rivian’s treasury

Rivian said it had $5.98 billion in cash last quarter, compared with $7.86 billion at the end of the fourth quarter. Some of the cash preservation and cost reduction came in the form of another workforce reduction of approximately 1%following a 10% reduction in employee headcount in the first quarter, due according to Rivian to economic uncertainty.

Rivian’s cash flow got a major boost in June in the form of a joint venture deal with Volkswagen, which announced plans to work with Rivian to create “next-generation software-defined vehicle (SDV) architectures” for use in both companies’ future electric vehicles.

The story continues