Rivian (RIVN) unveiled its updated R1 pickup and SUV, with improved features and new powertrains aimed at making its electric vehicles cheaper to build.
The R1T pickup and R1S SUV retain their signature exterior design. Most changes are implemented both under the hood and in software. The biggest changes come with the electric drive units; the Rivian-built dual motor remains the base configuration, but now the EV maker is also offering its own motors for a new three-motor setup, as well as the top-of-the-line quad motor powertrain.
The electric drive units in the earlier quad motor setup came from German supplier Bosch; engines for that and the new three-engine setup will now be built by Rivian. The company says the quad-motor R1T now offers 1,025 horsepower and a 0-60 mph time of 2.5 seconds. The previous version with Bosch engines had a power of 835 hp and could sprint from 0 to 100 km/h in 3 seconds.
“We continue to develop our flagship R1 vehicles, offering quality and performance without compromise. Our updated R1S and R1T further push the technical boundaries and create our most capable products yet,” Rivian CEO RJ Scaringe said in a statement.
Rivian also said its large and maximum battery packs have redesigned modules and new “more efficient” packaging, making them easier to manufacture and maintain, according to the company, and offering a range of up to 420 miles, an increase of 10 miles.
Rivian is also offering new battery chemistries with a cheaper standard lithium iron phosphate (LFP) battery pack, with an EPA-estimated range of 275 miles. Rivian also offers a heat pump, which aims to cool and heat the vehicle more efficiently.
In terms of software and autonomy, the company now offers an improved self-driving system with eleven cameras, five radar sensors and ‘AI prediction technology’. Rivian said the system’s computer module is ten times more powerful than before.
The company also reduces the number of control units and removes 2.5 kilometers of wiring.
Rivian said the entry-level dual-motor R1T will start at $69,900 and the R1S will start at $75,900. Tri-motor max battery packs will cost $99,900 and $105,900 respectively, while quad motor prices will come at a later date.
The Importance of R1 Improvements (and Cost Savings)
Nearly three years after delivering its first R1T pickup, the timing was right for Rivian to do a mid-cycle refresh of its only product, which in the automotive world typically happens every three to four years.
The performance and functionality changes will likely be welcomed by Rivian customers; Most important to the company, however, are improvements in the costs and bill of materials for building these vehicles. Rivian closed its factory in Normal, Illinois, for four weeks to make improvements to its processes and build out the architecture needed to make the new R1 vehicles.
During its first-quarter earnings report, Rivian reaffirmed its adjusted EBITDA loss forecast of $2.7 billion for 2024, but now sees capital expenditures improving to $1.2 billion from $1.75 billion previously.
The company also said at the time that as a result of the redesign and other improvements, Rivian “remains confident on its path to achieving modest gross profit in the fourth quarter of this year.”
However, at last week’s Bernstein conference, CEO RJ Scaringe warned that second-quarter results would be “messy” as the plant closure will impact second-quarter profits and deliveries. But new supplier contracts and the manufacturing upgrades at the plant will reduce Rivian’s bill of materials through 2025.
Currently, Rivian’s loss per vehicle through the first quarter is $38,784, meaning achieving gross profit or variable positive gross profit would be a welcome improvement for the company.
Given the company’s cash burn, Wall Street is focusing on possible cost improvements as the company looks to build a bridge to its next product, the release of the smaller R2 vehicle in 2026.
“Even if Rivian manages to turn R1 economics positive, it will still need to make significant additional progress in reducing its bill of materials and cost structure between now and the first R2 deliveries in the first half of 2026,” analyst wrote Emmanuel Rosner of Deutsche Bank shortly after Rivian’s publication. Publication of the first quarterly results in May. Rosner currently has a Hold rating and a $10 price target on the stock.
Rivian CFO Claire McDonough will likely provide more updates on cost structure and gross profit forecasts at next week’s Deutsche Bank Autos conference in New York City on June 11-12, 2024.
Pras Subramanian is a reporter for Yahoo Finance. You can follow him Tweet and further Instagram.
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