Written by Cláudio Afonso | LinkedIn | X
Electric vehicle maker Rivian expects to achieve positive gross profit by the fourth quarter of 2024, CFO Claire McDonough announced at the Deutsche Bank Global Auto Industry Conference on Tuesday.
McDonough also highlighted Rivian‘s strong relationship with Amazon, its largest shareholder and commercial customer while teasing future partners.
The company is in discussions with other enterprise clients to expand its commercial van business, which has a capacity of 65,000 units at the Normal facility.
“Today we’re just building on a single shift in normal for our commercial vans and not even a full shift at that. We’ve talked a lot in the past about the longer term sales cycle required for the commercial van business itself. So we’re in market speaking to a number of large B2B enterprise players about the capabilities, the total cost of ownership advantages that our vans can provide. And we truly believe it is best-in-class in terms of performance within the commercial van space in the market itself. But it will take us some time to build up more of the longer term demand trajectory, you know, beyond the Amazon relationship that we have as well,” the chief financial officer said.
The electric vehicle manufacturer, known for its light and commercial EVs, is targeting production of 57,000 units this year. Rivian recently unveiled its second-generation R1 models, which incorporate new technology and features designed to lower production costs and improve manufacturing efficiency.
“Last week was a really exciting week at Rivian to bring our Gen 2 product to market,” said McDonough. “We have introduced our own next-generation in-house drive unit powering our tri-motor and quad-motor offerings. Our tri-motor now achieves 0 to 60 in 2.9 seconds, with a range of up to 410 miles.”
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The new R1 vehicles also feature significant reductions in wire harness length and weight, contributing to cost efficiency. Additionally, Rivian launched its autonomous driving platform with enhanced processing power and improved sensor technology.
McDonough detailed the cost and margin benefits of the new R1s, attributing 60 percent of the improvements to supplier negotiations and 40 percent to engineering design changes. These efforts, along with a retooling of the company’s Normal, Illinois facility, are pivotal to Rivian’s goal of positive gross profit by the last quarter of the year.
The chief executive RJ Scaringe has recently shared that the company was able to reduce the components in the battery pack from 41 to 16.
Rivian’s R2 and R3 vehicles are slated for launch in early 2026. The R2, with a starting price of $45,000, shares much of its electronic architecture with the new R1s, allowing for streamlined production and reduced costs. The company aims to make these models globally accessible, expanding its market reach beyond North America.
The production capacity at Rivian’s Normal plant has increased by 30 percent, now able to build 56,000 units annually on two shifts. This efficiency is crucial as Rivian prepares for the R2 launch and considers future production expansions, including potential developments in Georgia.
Software and services remain a significant long-term opportunity for Rivian. The recent launch of Connect+ offers premium connectivity features, and the Rivian Autonomy platform promises additional paid features, enhancing the company’s recurring revenue streams.
As Rivian looks to the future, it plans to continue investing in production capabilities and innovative technologies. The company is set to spend approximately $1.5 billion in CapEx next year, slightly higher than this year’s $1.2 billion.
With confidence in its near and long-term roadmap, Rivian is positioning itself as a leader in the electric vehicle market, driven by technological innovation and strategic investments.
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Rivian Automotive has successfully cleared its inventory of the 2023 and 2024 R1T and R1S models following significant discounts announced in April and May, videos shared on social media show.
Over the last few days, Rivian‘s Vice President of Software Wassym Bensaid took to Reddit to address questions and provide updates on the company’s Gen 1 vehicles, assuring owners that their cars will continue to receive significant improvements through over-the-air (OTA) updates, even as Gen 2 models boast enhanced features.
Rivian will also introduce native support for streaming services such as Apple Music, Spotify, and Tidal via its Connect+ platform, leveraging both vehicle connectivity and an impending phone tethering feature.
Rivian CEO RJ Scaringe attended recently the Bernstein’s Annual Conference in New York where he revealed that the R3, expected to be launched in early 2026, will be priced at “mid to high $30,000s”.
In the same interview, the chief executive acknowledged that from an investor’s perspective, the second quarter will appear less favorable due to the plant shutdown in April. The suspension lasted four weeks, significantly impacting production at the plant in Normal, Illinois.
Written by Cláudio Afonso | LinkedIn | X
