Cost-cutting layoffs have had little effect on Rivian’s bottom line, as the troubled electric car maker has limped from another quarter with more than a billion dollars in losses.
Rivian lost $1.45 billion in the first three months of 2024, which was greater than the $1.35 billion hole it fell into Q1 2023, and less than other recent quarters. Rivian vehicles are still costing the manufacturer money hand over fist when sold, with CFO Claire McDonough saying on an earnings call this week that the automaker lost about $39,000 per delivery.
That said, the biz has retained some degree of optimism, with McDonough saying the second half of 2024 is looking up. And Q1 2024 netted $1.2 billion in revenue, up more than 80 percent from the same quarter last year, after delivering 13,588 vehicles, so it’s not totally screwed.
“We continue to move closer to making money on every vehicle we sell,” McDonough said. “We expect to see meaningful improvement in our gross profit during the second half of this year and believe we will reach a positive gross profit for the fourth quarter.”
Part of the reason for that optimism is the unveiling of the smaller-form Rivian R2 in March, which CEO RJ Scaringe said will be part of a drive towards profitability once the vehicle makes it to market in 2026.
R2 production will take place at Rivian’s Normal, Illinois, factory, which has been offline through most of Q1 to retool for R2 form-factor production that will be the basis for future Rivian vehicles.
“Starting R2 production in normal is expected to save over $2.25 billion between now and the start of production as compared to the original plan of launching the first line of R2 production at Rivian’s Georgia site,” Scaringe said on the call with Wall Street analysts. The retooled Normal factory is now back online and still able to produce other models, which Scaringe said will help offset costs further in coming quarters.
“First-quarter results exceeded our outlook and set a strong foundation for the remainder of the year,” Scaringe said, losses aside.
Rivian stock has been on a near-constant downward trajectory, and fell more when the California outfit laid off 10 percent of its staff in February.
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We note the stock experienced a bit of a bounce this week when rumors emerged the biz was considering a partnership of some sort with Apple. Rivian could do with a cash infusion from Cupertino, considering it’s down to less than $10 billion in the bank, though it’s unclear whether the whisperings are at all true – neither Apple nor Rivian responded to questions.
As for Rivian’s future, it’s been tradition for McDonough to share how long the company’s lifeline currently is. Back when Rivian reported its year-end 2023 earnings in February, McDonough said the biz was confident it could “fund our operations through 2025.”
McDonough’s optimism popped back up here too, with the CFO predicting Rivian could keep the lights on “through the launch of the R2 in the first half of 2026” – with a number of caveats, of course.
“Starting production of R2 in Normal, driving material costs down, increasing manufacturing and production efficiency, reducing operating and capital expenditures and optimizing working capital” are all essential parts of that operation extension puzzle, McDonough said.
That’s a lot to ask for, and Rivian’s future could be at stake. ®