Rivian will update investors on its second-quarter financials as the electric adventure vehicle maker looks to make its production more efficient and prepare for the mass-market introduction of electric vehicles in two years.
For the quarter, Rivian is expected to report revenue of $1.165 billion, according to the Bloomberg consensus, a substantial 76% jump from a year ago. The revenue increase won’t yet translate into profits, with the company expected to report an adjusted loss per share of $1.20, with an adjusted net income loss of $1.194 billion. Operating profit is expected to be slightly worse, at a loss of $1.371 billion and EBITDA of negative $892.3 million.
Last quarter, Rivian reaffirmed its adjusted EBITDA loss forecast of $2.7 billion for 2024, but now sees its capital spending improving to $1.2 billion from $1.75 billion previously. Rivian said this was because the company moved the start of R2 production to its Normal, Ill., plant and expected further savings in 2025 and 2026. Investors will be watching to see if those loss forecasts improve for the rest of the year.
Investors will also be watching for updates on Rivian’s full-year profitability numbers. In its Q1 report, the company said that as a result of its retooling upgrade and other improvements, Rivian “remains confident in its path to achieving modest gross profit in the fourth quarter of this year.”
Upgrades to the conversion impacted Rivian’s deliveries in Q2. Last month, the company said it produced 9,612 vehicles at its Normal assembly plant and delivered 13,790 vehicles. Both figures were down from the 13,980 vehicles produced and 13,588 delivered in Q1. Rivian said production and deliveries in Q2 would be “choppy” due to plant closures required for the conversion.
Rivian’s updated R1T and R1S models could be a catalyst for new sales, along with continued aggressive lease financing for its vehicles. Those new vehicles were available to order beginning in June, the company said.
This may have led Rivian to confirm its forecast for annual production of 57,000 vehicles in total, despite the decline in vehicle production in the second quarter.
Strengthening Rivian’s cash position
Rivian said it had $5.98 billion in cash in the latest quarter, up from $7.86 billion at the end of Q4. Part of the cash preservation and cost reduction came in the form of another workforce reduction of about 1%, following a 10% salary cut in Q1 that Rivian said was due to economic uncertainty.
A major boost to Rivian’s cash position came in June in the form of a joint venture deal with Volkswagen, which announced plans to collaborate with Rivian to create “next-generation software-defined vehicle (SDV) architectures” that could be used in both companies’ future electric vehicles.
This is exciting! Volkswagen Group CEO Oliver Blume and I are pleased to announce the formation of a joint venture between our two companies. This collaboration will bring Rivian’s software and zonal electronics platform to a broader market through Volkswagen Group’s global reach and… photo.twitter.com/11XVNUo89J
— RJ Scaringe (@RJScaringe) June 25, 2024
In return, Volkswagen will initially invest $1 billion in Rivian through an “unsecured convertible note that will be convertible into Rivian common stock,” with up to $4 billion in additional investment through 2026, for a total injection of $5 billion.
For Rivian, the news of new capital is a reassurance about the company’s expected starting position as it moves toward the launch of its next-generation vehicles, the mass-market R2 and R3 SUVs.
“This news is meaningfully positive for RIVN, as the agreement should provide the company with access to capital to not only finance production of the R2 at its Normal, IL plant, but also to build a new factory in Georgia for its midsize vehicle platform,” Bank of America analyst John Murphy wrote in a note shortly after the deal. “We have assumed RIVN would need to raise more capital, and VW’s investment in RIVN will prove valuable in helping the company achieve the scale needed to become free cash flow positive.”
Pras Subramanian is a reporter for Yahoo Finance covering the auto industry. You can follow him on X and further Instagram.
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