Rivian’s Chief Financial Officer, Claire McDonough says the company is on track to become profitable by the second half of 2024 thanks mainly to a significant ramp in production over the next two years. McDonough made the comments at the Bank of America Securities Summit and come after the automaker posted a $6.75 billion net loss in 2022.
At the summit McDonough revealed that Rivian aims to build 85,000 R1 vehicles next year, which is more than three times more than the nearly 25,000 it produced in 2022 and 35,000 more than it plans to make this year. This significant ramp-up in production will help address the backlog of orders that the company has amassed after a price increase in March, which “goes well into 2024,” according to McDonough. For orders made before the March price hike, Rivian anticipates building and delivering all necessary vehicles by mid-2023. The company recently started notifying thousands of customers to expect their cars in the next few months.
The increase in production will come at the same time as the company expects production costs to decrease. According to McDonough a number of their supplier contracts from 2018 and 2019 are set to expire, and will be renegotiated at lower prices.
Additionally, McDonough revealed some details about the upcoming second-generation platform, the R2. Rivian anticipates starting production for this platform as early as 2025 or 2026, in line with previous estimated targets, with the aim of manufacturing 200,000 R2 vehicles during 2026 and 400,000 units in subsequent years. The R2 is expected to be priced similar to that of the Tesla Model Y, around $40,000 USD for a base trim, and will be built at the company’s second manufacturing facility still to be built in Georgia. (via InsideEVs)
While ramping up R1 production and developing the R2, Rivian’s priority is currently the Electric Delivery Vans (EDVs) made for Amazon. These commercial vehicles are the first in line to get Rivian’s Enduro electric motors over the dual-motor R1 models. Production of the EDV was paused in the first quarter of 2023 for an upgrade with a new lithium iron phosphate (LFP) battery pack and the Enduro motor developed in-house. Currently, around 3,000 Rivian-made Amazon electric vans are making deliveries across the United States.
In addition to its production goals, Rivian plans to join the Federal Charging Fund to rapidly expand the number of chargers in its Rivian Adventure Network (RAN) of DC fast chargers, which currently only has about 20 locations across the US. With the funding Rivian would be able to recoup around 80% of the costs for a new station. However, accessing the federal funds requires Rivian to open up its network to all brands of EVs, similar to what Tesla did with the Magic Dock-equipped Superchargers. All RAN locations are currently restricted to Rivian vehicles only.