Rivian Beats Q2 Earnings Estimates, Predicts Q4 Profit

EV maker Rivian beat its second quarter earnings estimates, but more importantly predicted it would be in the black for the first time ever in the final quarter of 2024. A series of cost cutting measures and changes to the way the company sells vehicles combined to make the second quarter a good one.

The company reported net loss of $1.5 billion on revenue of $1.2 billion for the second quarter. Through the first half of the year, Rivian’s lost $2.9 billion on revenue of $2.4 billion.

For the second quarter, Rivian posted an adjusted loss of $1.13 per share, better than analysts’ expectations of $1.20 a share. Sales came to $1.16 billion, below the consensus analyst estimate for $1.17 billion. However, the company’s April shutdown to update technology is expected to have a positive effect on its bottom line.

“During the second quarter we took significant steps towards our profitability targets through some of the changes we made to the R1 platform,” the company wrote in a letter to shareholders.

“We expect to start seeing the impact of these changes in the second half of the year and expect to reach a modest gross profit in the fourth quarter of this year.

Reaffirmation

The company reaffirmed its production and fiscal guidance for the year. The company expects “57,000 total units of production, $(2,700) million in adjusted EBITDA and $1,200 million in capital expenditures.”

The company produced 9,612 vehicles during Q2, bringing the full-year total to 13,970 units. These numbers include the delivery vans it produces for Amazon. The numbers come despite an expectation espoused by the California-based EV maker that deliveries will fall in the third quarter — slightly, according to Reuters.

The April factory update allowing for more efficiency and the next-generation of R1 trucks and SUVs combined with special offers on leases which pushed delivery numbers upward, resulted in lower inventory, which is going to impact the delivery numbers in Q3, officials noted.

Despite all of this, the company noted it ended the second quarter with $7.9 billion in cash, cash equivalents, and short-term investments. Including the capacity under the company’s asset-based revolving-credit facility, Rivian ended the quarter with $9.2 billion of total liquidity.

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Volkswagen’s help

The cash number includes the $1 billion from Volkswagen, which is part of the new $5 billion deal with the German automaker. Scaringe noted the deal generated a lot of excitement from the company’s supply base.

The investment is designed to form a new joint venture between the two companies that is “equally controlled” and will create next-generation electrical architecture and best-in-class software technology, Rivian claims in a release.

VW will initially invest $1 billion into the deal with another $4 billion coming in installments through 2026. The $1 billion is an unsecured convertible note that converts into Rivian common stock. That funding will actually aid Rivian with the expansion its product lineup, starting with the R2 revealed in March.

It will also help get the company’s factory in Georgia up and running. It was expected to produce the R2 there, but for the time being, it will be built at Rivian’s existing plant in Normal, Illinois. The remaining $4 billion is split into a $2 billion purchase of Rivian shares — $1 billion in 2025 and $1 billion in 2026 — and $2 billion into the new joint venture.

The investment of $2 billion related to the joint venture is expected to be split between a payment at the inception of the joint venture and a loan available in 2026.