Rivian posts “defining” Q2 earnings even as future remains uncertain

American electric vehicle (EV) newcomer Rivian published its second quarter earnings on Tuesday, with mixed results and lower production and deliveries contrasted with the CEO’s upbeat assessment of the quarter.

Seen to be one of the few electric vehicle manufacturers with the potential to push through slowing EV demand, Rivian’s future success hinges on its ability to dramatically reduce costs and deliver on its promise of a more affordable SUV.

The company had already announced that it had produced 9,612 vehicles at its manufacturing facility in Normal, Illinois and delivered 13,790 vehicles during the same period. This marked a drop from the previous few quarters but was nevertheless in line with company expectations due to the planned retooling upgrade at the Normal facility.

This retooling allowed for the launch of a second generation of the R1 platform which underpins both the R1S SUV and R1T pickups.

According to Rivian, “The new R1 includes hundreds of design, engineering, and performance upgrades. These upgrades were made while also realizing significant improvements throughout the vehicle, positioning the platform for long-term profitability.”

Rivian also unveiled two new in-house motor configurations during the second quarter – the Tri-Motor and the Quad-Motor. With all motors now designed, engineers, and manufactured fully in-house, the new Ascent Quad and Tri-Motor configurations are significantly lower in cost, quicker, and provide superior range.

Revenue for the quarter rose to $US1.16 billion – beating market expectations – but gross profit losses increased year-over-year to $US451 million. Net loss for the second quarter of 2024 increased to $US1,547 million compared to a loss of $US1,195 million in the second quarter of 2023.

Rivian is also now suffering from a depleted inventory stock due to the delays caused by the retooling effort and is reportedly now expecting a slight drop in third quarter deliveries.

Speaking to Reuters, company founder and CEO RJ Scaringe said that the company will likely see cost reduction from the factory retooling realised in the second half of the year, reaffirming the company’s target of reaching a profit in the last quarter of 2024.

“The second quarter has been a defining one for Rivian,” said RJ Scaringe, speaking in the company’s press release.

“We have demonstrated strong execution during the quarter with the plant retooling upgrade and launch of second generation R1 vehicles. The changes we made to the R1 platform have allowed us to reduce material and manufacturing costs, while simultaneously improving performance and capabilities.

“As a testament to our industry-leading technology stack, we also recently announced our proposed JV with Volkswagen Group. The technical workstream to prepare the integration of Rivian electrical architecture and software technology stack into Volkswagen Group products are moving along very well, and we expect to close the joint venture in the fourth quarter of this year.

“The output from our joint venture will see Rivian’s technology in vehicles all around the world, helping to create more consumer choice and speed up the transition away from fossil fuels.”

Rivian and Volkswagen announced their joint venture in late June, which saw the German automotive giant commit to invest up to $US5 billion ($A7.5 billion).

The joint venture will focus on the development of next generation electrical/electronic architecture, or E/E architecture, for electric vehicles, and provides Volkswagen with immediate access to Rivian’s existing E/E architecture technology for use in its own electric vehicles.

“Through our cooperation, we will bring the best solutions to our vehicles faster and at lower cost,” said Oliver Blume, CEO of Volkswagen Group.

“We are also acting in the best interest of our strong brands, which will inspire with their iconic products. The partnership fits seamlessly with our existing software strategy, our products, and partnerships. We are strengthening our technology profile and our competitiveness.”