US electric-vehicle maker Rivian on Tuesday reported third-quarter earnings, disclosing a net loss of $1.166 billion, after its shares earlier in the day fell to their lowest level since late August.
However, the gross profit of $24 million came in higher than what the Wall Street consensus had estimated.
The company founded and led by RJ Scaringe was expected to post a gross loss of $39 million for the third quarter, according to average estimates compiled by FactSet.
The EV maker reported quarterly revenue of $1.56 billion, also above analysts’ estimates of $1.52 billion.
Immediately after the results, Rivian shares are trading 3% higher after having closed 5.23% lower on Tuesday at $12.50.
Loss from operations was reduced to $983 million, down from $1.169 billion in the second quarter of the year.
Rivian reiterated its guidance of between 41,500 and 43,500 units, which was trimmed for the second time this year in September.
The EV maker has a record industry-wide cumulative loss of over $22 billion, as it moves into the launch of its more affordable vehicle.
Rivian‘s outlook hinges increasingly on the successful execution and timely ramp of its forthcoming R2 model, which is planned to begin deliveries in the first half of 2026.
“Highly Concerning” Cash Burn Rates
Last month, CFRA analyst Garrett Nelson noted that Rivian‘s cash burn rates are “highly concerning,” with the construction of a new plant in Georgia acting “as an even greater drag on free cash flow.”
After several delays, the company recently broke ground on its $5 billion plant in Georgia.
The company is supported by both a federal loan and state incentives (at over $1.5 billion); however, investors still see it as a burden in the balance sheet.
Last week, Rivian‘s Chief Financial Officer Claire McDonough said the company is planning to get access to the US Department of Energy’s $6.6 billion loan only after the plant is fully built.
“It’d be prior to starting production in 2028 that we’d be drawing down the loan,” McDonough stated.
R2 Production
According to the CFO, Rivian‘s operating profit target will be hit in 2028, once its main plant in Normal, Illinois, reaches full production capacity of 200,000 vehicles a year.
Earlier this month, in a separate interview, CEO RJ Scaringe said that the Normal plant will be able to produce “up to 175,000 R2s,” for which the company will soon start production.
Rivian originally projected that, in 2026, the Normal plant would produce 155,000 R2 vehicles, alongside 85,000 R1S and R1T vehicles and 65,000 electric delivery vans (EDVs).
Scaringe admitted that R2 production will be a “structural cost challenge” while the company produces “less than 50,000 units a year,” which will become an enormous advantage once they “add volume.”
Volkswagen Investment
Rivian and Volkswagen entered a partnership late last year, according to which the German automaker agreed to invest $5.8 billion in the EV maker as it adopts Rivian‘s zonal architecture and software stack in its future electric vehicles.
During the first two quarters of the year, as the company reported positive gross profits, Rivian received two $1 billion payments from Volkswagen under their agreement.
The results were largely driven by revenue from automotive regulatory credit sales, which were fully booked from January through June.
“We no longer anticipate we’ll be selling or earning revenue from the sale of regulatory credits in the second half of of this year,” the company’s CFO noted in the previous earnings call.
Q3 Results x Q4 Outlook
EV sales surged ahead of the September 30 deadline for the US federal consumer credit. It led Rivian to report its strongest quarterly deliveries of the year.
In August, founder and CEO RJ Scaringe said the company expected the third quarter to be the “strongest” this year.
This suggests Rivian doesn’t expect the final quarter of the year — typically the best period for automakers — to perform as well.
Ahead of the start of R2 production, the company recently announced that it is cutting 600 jobs in sales and services. It marks the company’s fifth layoff in just two years.
According to the CEO, “these changes are being made to ensure we can deliver on our potential by scaling efficiently towards building a healthy and profitable business.”
Late last month, Rivian agreed to pay $250 million to settle a securities class action lawsuit filed in 2022, resolving claims that the EV maker misled investors around the time of its initial public offering.
