Rivian has reported mixed earnings results for Q3 2024, revealing both significant setbacks and progress in critical areas. While the company fell short of Wall Street expectations, Rivian maintains an optimistic outlook, projecting its first-ever positive gross profit in Q4.
Rivian’s Q3 revenue dropped 34.6% from the previous year, falling to $874 million, significantly missing the consensus estimate of $990 million. This shortfall was partly attributed to supply chain issues, specifically a shortage of a component in the drive units for its R1 vehicle line, leading to production bottlenecks. In response, Rivian already announced it was lowering its annual production forecast to between 47,000 and 49,000 units, down from the 57,000 initially projected.
Despite these disruptions, Rivian remains focused on meeting its target for vehicle deliveries, projecting between 50,500 and 52,000 units for 2024.
For Q3, Rivian posted a net loss of $1.1 billion, narrowing from the $1.37 billion loss reported a year ago. While the loss remains substantial, it indicates some progress in cost control efforts, as operating expenses decreased to $777 million from $963 million in Q3 2023. Rivian reported a negative gross profit of $392 million, marking an improvement from the $477 million loss recorded in Q3 2023.
This negative gross margin reflects the ongoing cost challenges, as Rivian grapples with high production expenses and increased spending on its new generation R1 vehicles, resulting in a $39,130 loss per vehicle delivered in Q3.
Rivian’s liquidity remains a key area of focus for analysts, given the company’s ambitious expansion plans. The company ended Q3 with $6.74 billion in cash and cash equivalents and $8.1 billion in total liquidity, down from $7.85 billion in the previous quarter. Rivian’s burn rate highlights the financial pressures on the company as it works to scale production and improve efficiency. Analysts suggest that Rivian may need to raise additional funds within the next two years to shore up its cash position and support future growth.
In addition to its Q3 financials, Rivian announced a partnership with LG Energy Solution to supply US manufactured battery cells for its upcoming R2 midsized SUV, expected to launch in 2026. This strategic partnership aligns with the domestic sourcing requirements under the Biden administration’s Inflation Reduction Act (IRA), which incentivizes EV production within the United States.
Despite the challenges, Rivian remains on track to achieve a modest positive gross profit in Q4 2024, something that if it achieves would be a significant milestone for the company. Scaringe emphasized that profitability is the “core focus” as Rivian strives to streamline production processes and optimize its cost structure.
You can read Rivian’s full Q3 2024 shareholder letter below.
