Rivian reduced its losses in the third quarter but also reported a sharp decline in revenue amid a supply chain disruption and softer demand from consumers for its electric SUVs, pickup trucks and delivery vans.
Company leaders, however, said the automaker’s fortunes could reach a turning point in the next few months, potentially boosting the startup closer to profitability and clearing the way to deliver its promised $5 billion EV factory to Georgia.
Rivian reported Thursday about $874 million in revenue during the year’s third quarter, a 35% decrease from the same time last year. It was the company’s lowest quarterly revenue since the beginning of 2023.
The company’s net loss for the third quarter was nearly $1.2 billion, about 15% less than the same time a year ago, as the company made progress on reducing expenses. Rivian ended June with nearly $5.4 billion in cash and cash equivalents at the end of June. At the same time last year, it had $7.9 billion in cash reserves.
Rivian and German auto giant Volkswagen announced in June a potential $5 billion partnership, which consists of an initial $1 billion investment followed by the remaining investments through 2026.
The revenue decline was primarily attributed to a production disruption at Rivian’s factory in Illinois, which prompted the California-based automaker to reduce its manufacturing goal for 2024. It lowered its yearlong production target to between 47,000 and 49,000 EVs. The goal was previously 57,000 vehicles, which would have roughly matched the start-up’s manufacturing figures from 2023.
Rivian said it is experiencing a shortage of a shared motor component used across its R1 vehicles and electric delivery vans. In a letter to shareholders, the company said its leaders have “a strong sense of urgency in finding a solution as we work in close partnership with the supplier to ramp additional capacity to accommodate planned production.”
Simultaneously, the automaker delivered fewer vehicles to customers. Rivian delivered 10,018 vehicles during the three-month stretch, a 36% decrease from last year’s third quarter and a 27% decrease from the prior quarter. It’s the fewest deliveries since the beginning of 2023.
The letter to shareholders described the third quarter as “a more challenging consumer environment,” mirroring other automakers’ recent concerns that the average American car buyer is hesitant to switch from gas to electric. High interest rates have also made monthly car payments for buyers who finance their vehicles more expensive, another hurdle for the industry.
Rivian CEO R.J. Scaringe said progress is being made to improve the company’s balance sheet, especially its production costs. Through cost-cutting measurers and technology improvements, the company reduced its material costs by 20% for its R1 platform of SUVs and pickup trucks. Company leaders say they’re on track for positive gross profit — not necessarily net profit — by the end of the year.
The company is also getting close to finalizing its material sourcing for its new line of crossovers called the R2. Rivian secured a five-year contract with LG Energy Solution to supply battery cells for the R2, which will be produced, at least to start, in Illinois.
The large order “marks a key milestone for LG Energy Solution in expanding its client base within the cylindrical battery segment,” the Korean battery maker said in a news release.
About 85% of the R2′s parts have been sourced.
“We are excited about the future and our midsize SUV, R2, which we believe will be a fundamental driver of Rivian’s growth,” Scaringe said in a news release.
R2 production and other planned models, the R3 and R3X, are expected to be produced at its Georgia plant. That plant remains on hold, though the company has said it will build it and meet its jobs and investment promises. State and local leaders offered Rivian $1.5 billion in incentives to woo the factory, and most of those incentives are only realized once the plant is built.
The company’s blockbuster $5 billion partnership with Volkswagen is also expected to close during the fourth quarter, providing a new capital source.
Cox Enterprises, which owns The Atlanta Journal-Constitution, also owns about a 3% stake in Rivian.
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