RJ Scaringe, the founder and Chief Executive Officer of Rivian, addressed the company’s industry-record cumulative cash burn rate in a new interview released on Wednesday.
The Irvine EV maker’s cumulative cash burn has exceeded $24 billion by the end of 2025, as it reported an additional $2.5 billion in negative free cash flow last year.
The company invested roughly $1.7 billion in capital expenditures last year, with expanded manufacturing capacity and product development, as it prepares for the launch of its mid-size SUV, the R2.
Scaringe was pressed by Buy Hold Rant podcast host Hamid Shojaee on a major criticism from investors — that Rivian “has sort of like burned through a ton of cash to get to where it is today.”
The CEO was faced with the numbers compiled by X user ‘alojoh,’ in a chart that includes US EV makers’ free cash flow history throughout their first years in the business.
When the host asked what will “take Rivian to the next stage” and how he responds to this rate of cash burn, Scaringe replied, “we wouldn’t be building a business if we didn’t plan for the business to make money.”
First Years
Noting that there are “a couple of things to keep in mind” with the chart, Scaringe pointed to the COVID-19 pandemic and the use of high-priced materials in its first models.
These factors caused Rivian to accumulate losses that the company had not originally anticipated.
“And we had the disadvantage of when we sourced the components that go into our vehicle, we sourced them when the auto industry was at like an all-time high,” Scaringe added, explaining that “because the auto industry was thriving at that point, it was very hard to get great pricing.”
The company was confident that, after launching, the volume of sales would help lower the costs of these materials.
“We had to launch (…), and we did that with the confidence that when we launched, the volume that we’d be driving and the success of the product would allow us to renegotiate those contracts,” Scaringe said.
However, with the COVID-19 pandemics affecting the supply chains in a global scale, the scenario for Rivian “actually got worse, because then we were just paying to get access.”
“And so it was like this double-compounding challenge of not having the scale to allow us to [re]negotiate aggressive or reasonable pricing, and then further having to pay just to get enough parts to go around our plan,” the Chief Executive clarified.
Tesla x Rivian Scale
RJ Scaringe noted that the chart overlooks the companies’ actual starting conditions, as seen when comparing Rivian to Tesla.
“Often when you look at this chart, it normalizes everything to the year of when we started the business and started spending,” he said. “And so, you see, they all have the same point on the left, but it ignores the fact that we’re not competing against Tesla of 2013.”
The CEO explained that Rivian hasn’t yet reached scale, so its R&D and operating expenses are proportionally higher — unlike Tesla, which can cover costs with its larger cash flow.
“From a customer point of view, if you buy a Rivian, you don’t want to say, ‘well, they’re not investing in all these things and their R&D budget’s really constrained, because they’re trying to compete against what Tesla was working on in 2012 or 2013 or 2014,'” he noted.
Rivian has “a very large R&D budget, and we have a very large OpEx budget for building out the infrastructure to be a company that’s much, much larger than we are,” Scaringe added.
Capital Intense Business
To Rivian‘s CEO, the downward curve in free cash flow is not a surprise.
“This is a capitalization of the business; we raise capital to become a very large company,” Scaringe mentioned, “and we knew that we’d be going into this trough. That’s why we raised a lot of money as a private company.”
According to Forbes, Rivian raised about $10.5 billion in private funding from investors including Amazon, Ford and T. Rowe Price ahead of its 2021 IPO.
The company went public on November 10, 2021, with a valuation of $90 billion — the biggest initial public offering since Facebook in 2012.
Its shares surged 29% on the first trading session, surpassing the market cap of both Detroit automakers General Motors and Ford then.
The stock reached a peak of $179.45 per share on November 16.
It has lost over 90% of its value in nearly five years.
The stock closed at $15.12 this Tuesday, giving the company a market cap of around $18.7 billion.
R2 Launch
In mid December, when asked whether Rivian would need to raise additional capital to reach profitability, Scaringe pointed to the company’s cash reserves, as previously referenced by Chief Financial Officer Claire McDonough.
“What we’ve been able to accumulate in terms of cash allows us to launch R2, ramp R2 without needing additional capital,” Scaringe said then.
This week, the CEO reiterated that launching a compelling vehicle required significant investment to make the technology robust.
“For us to be launching something that, I can say with conviction and confidence, is highly compelling, it has required us to spend money on making the technology incredibly robust,” Scaringe noted.
“The goal isn’t to sell 50,000 R2s a year,” he stated.
Rivian delivered 42,247 vehicles in 2025. It expects 2026 deliveries to be between 62,000 and 67,000 units, with the introduction of the mid-size SUV.
Considering that R1 and EDV sales are estimated to remain flat, the new model is expected to account for about 20,000 to 25,000 units this year as the company ramps up production.
“R1, which is a flagship product, we went into that knowing that it was not a high volume product, but that it was our handshake with the world,” RJ admitted, adding that “consumer satisfaction has been outstanding.”
As reported in December, Rivian has ranked first for the third consecutive year in Consumer Reports‘ Owner Satisfaction ratings.
While the R1S is, according to the CEO, the best-selling premium electric SUV in the country, it is also “a 90-plus thousand dollar car, so it’s not going to sell that many.”
“R2, on the other hand, it’s the first, in my view, it’s truly the first time there has been a product that’s highly compelling and priced similarly to a Model Y,” the CEO added.
Throughout 2025, Scaringe emphasized that US consumers currently have limited electric vehicle options, and that the upcoming R2 will provide more.
He believes that, for the first time, ‘there’s going to be more than one choice’ for customers looking to buy a $50,000 SUV.
The R2, for which pricing details will be unveiled on March 12, will have an entry-level variant priced at $45,000.
It will debut, however, with a pricier dual-motor iteration, as confirmed by management.
“And I think that’s probably the least understood part of the business is that we’re spending to become a very large company,” he added. “And we’re not a very large company until we have R2. R2 is how we get there.”
