Electric vehicle maker Rivian said Tuesday it is making progress in its efforts to rein in costs and shore up its manufacturing capabilities — both critical components to determining when the company might start construction on its planned $5 billion Georgia factory.
The California-based automaker recently announced multiple waves of layoffs and slowed vehicle production to transition its existing Illinois manufacturing plant to new suppliers to cut costs and improve efficiencies.
The planned Georgia plant was also indefinitely delayed as a cost-cutting measure, saving Rivian more than $2.2 billion in development costs at a time when company leaders are focused on trying to turn a profit.
In March, when Rivian announced plans to pause the Georgia plant, it also announced it would shift the start of production of a new crossover, the R2, to its factory in Illinois. There, the state of Illinois said it would provide $827 million in incentives to support the Rivian plant expansion.
Rivian told shareholders in a letter Tuesday afternoon that moving the start of production of its new R2 crossover to Normal, Illinois, will allow it to “significantly reduce the capital expenditures required to launch R2,” reducing its expected capital expenditures for this year by $550 million to $1.2 billion.
“We also expect savings from moving the R2 launch to Normal to impact 2025 and 2026,” the company wrote in the shareholder letter.
Rivian reported $1.2 billion in revenue during this year’s first quarter, an 8.4% decrease from the fourth quarter but 82% more than Rivian reported during the first three months of 2023.
The company’s net loss for the first quarter was $1.4 billion, larger than its $1.3 billion loss in the first quarter of 2023.
Rivian ended March with nearly $6 billion in cash and cash equivalents.
The company produced 13,980 vehicles during the first three months of 2024, a 49% increase from a year ago but a sharp decline from more recent quarters.
Despite steadily increasing production over the past two years, Rivian forecast that production will be flat this year at 57,000 vehicles as it shifts its focus to various cost-cutting measures.
Rivian also delivered 13,588 vehicles during this year’s first quarter, continuing a backslide that began late last year. While it’s a 71% increase from 2023′s first quarter, it’s a 3% decrease from the prior three months.
The Illinois factory has a production capacity of 150,000 vehicles, nearly triple its current output. Rivian officials said incorporating R2 into the factory will boost its capacity to about 215,000 vehicles.
Rivian said it still expects to lose money for the full year in 2024, though the company said it believes it will enter the black in the fourth quarter.
“We do expect Q4 to be gross profit positive for the quarter. And that sets us up nicely as we think about achieving positive gross profit for the full year of 2025 on a go-forward basis as well,” said Claire McDonough, Rivian’s chief financial officer, during the company’s investor call Tuesday evening.
The slump in deliveries comes amid growing concern in the automobile industry about consumer hesitancy about switching to EVs. Overall, EV sales grew during 2023 and hit milestones, but adoption lagged industry predictions.
Rivian CEO R.J. Scaringe said he remains committed to building the factory along I-20 an hour east of downtown Atlanta, stressing it remains critical to the EV maker’s future. A timeline to begin vertical construction has not been released. As proposed, the Georgia factory’s first phase will include the capability to produce 200,000 EVs, eventually growing to double that figure.
Cox Enterprises, which owns The Atlanta Journal-Constitution, also owns about a 3% stake in Rivian.
Credit: TNS
Credit: TNS
