Rivian Seems To Have Resolved Its Biggest Money-Draining Issues

On Tuesday, Rivian Automotive Inc RIVN posted its second quarter results. The Amazon.com Inc AMZN-backed EV maker posted a narrower than expected loss while lifting its production guidance. Rivian shares initially went up nearly 3% after the report, but its stock has soared 80% over the past 90 days as it continues to enjoy growing demand for its electric pickup and sport utility vehicle despite raised borrowing cost. While its EV rivals burn cash to ramp up production and follow the EV king, Tesla Inc TSLA in lowering prices to boost demand, Rivian seems to be on solid footing. 

Key Q2 Numbers

For the quarter that ended on June 30th, Rivian made $1.12 billion in revenue from the R1T pickup, the R1S SUV and electric delivery vans it makes for Amazon, with sale of zero-emission regulatory credits making about $34 million of those sales. Still, Rivian topped Refinitiv’s consensus estimate of $1 billion and made quite an improvement from 2022’s comparable quarter when it made only $364 million in revenue. Unfortunately, it still made a net loss of $1.19 billion, but still improved from 2022’s comparable quarter when it lost $1.7 billion. When adjusted, Rivian is operating at a loss of $881 million, or $1.08 per share, which is better than $1.41 that Refinitiv’s survey of analysts anticipated. Gross loss amounted to $412 million, a significant improvement from 2022’s comparable quarter when its negative gross profit amounted to $704 million. Compared to the first quarter, it is an improvement of approximately $35,000 per EV. The adjusted loss was $31,595 per EV sold which is a great improvement from first quarter’s $67,329. Although still negative, gross margin improved to negative 37% while it was negative 81% in the first quarter. Rivian also trimmed its R&D costs by about 18% YoY to $444 million. It also lowered its capital expenditures from $359 (2022’s comparable quarter) to $255 million as during last year’s comparable quarter, it needed equipment for the early stages of production. As of June 30th, cash balance amounted to $10.2 billion.  

12,640 EVs were delivered, which is 59% higher compared to the first quarter and greatly beyond the 4,467 EVs it delivered in 2022’s comparable quarter. 

During the reported quarter, Amazon-backed EV maker made 13,992 EVs, rising its output from first quarter’s 9,395 and more than doubling 2022’s comparable quarter output which amounted to 4,401 EVs.

Lifted 2023 Guidance

Amazon-backed EV startup guided for 2023 output of 52,000 EVs, which is double to its 2022’s output and higher than its prior production outlook that guided for 50,000 EVs. Rivian reiterated that it anticipates to reach a positive gross profit sometime next year. It guided for full year capex of 1.7 billion, lowering its prior guidance of $2 billion.

RJ Scaringe reassures on liquidity and positioning

Rivian CEO concluded that the better-than-expected results reflect the company’s focus on achieving profitability through economies of scale, cost reductions and improved efficiency. During the quarter, the Amazon-backed EV maker achieved meaningful reductions in both R1 and EDV vehicle unit cost across the key components. Scaringe also assured investors that liquidity is covered through 2025. With the latest results, it seems that Rivian might have resolved its biggest money-draining issues. Moreover, with its upcoming lineup of smaller and cheaper EVs, Rivian’s EV sales seem poised to continue to ramp up and by gaining access to Tesla superchargers, it seems better positioned than many others for the EV race. There’s also the fact that Rivian managed to beat Tesla already by bringing to life the world’s first electric pickup, the R1T, while the Tesla Cybertruck is anticipated to hit the road later this year after many delays.

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