Rivian shares fall as electric car maker reports second-quarter cost increases

Shares of Rivian Automotive Inc. fell more than 6% in late trading today after the electric car maker reported a wider-than-expected second-quarter loss.

For the quarter ended June 30, Rivian reported adjusted earnings per share of $1.13, compared with a loss of $1.08 per share in the same quarter of 2023 on revenue of $1.16 billion. Analysts were expecting a loss of $1.21 per share on revenue of $1.14 billion.

Rivian’s net loss for the quarter was $1.46 billion, or $1.46 per share, compared with $1.2 billion, or $1.27 per share, a year earlier. The company also reported an adjusted loss of $451 million, compared with a loss of $412 million a year earlier.

During the quarter, Rivian delivered 13,790 vehicles, with each vehicle delivered generating a loss of $4,278 due to costs that Rivian “does not anticipate will be part of our long-term cost structure.” In other words, it does not plan to lose money on every vehicle sold in the future.

The company’s total operating expenses rose to $924 million in the quarter, compared with $873 million in the same quarter last year. That figure included $177 million in noncash, stock-based compensation, compared with $158 million a year earlier.

Even though the company is still burning cash, it still has some breathing room. At quarter’s end, it had $7.88 billion in cash, cash equivalents and short-term investments, and, including its revolving credit line, $9.18 billion.

Notable events in the quarter, and one reason it has some breathing room, include Rivian announcing a joint venture with Volkswagen International America Inc. that included a $1 billion unsecured convertible note. Another $4 billion in potential additional investment from VW is also on the table, subject to approval.

The VW partnership could be Rivian’s saving grace in the future, as it involves providing electrical architecture and software for VW Group products. Considering that Rivian ships as many cars in a quarter as VW ships about every 12 hours, the deal has big advantages for Rivian, which, despite its big promises, continues to struggle in the highly competitive global electric car market.

“The partnership is expected to accelerate software development for Rivian and Volkswagen Group,” Rivian said in its earnings release. “The plan is for both companies to combine their complementary strengths and lower their cost per vehicle, increasing scale and accelerating innovation worldwide.”

The company confirmed its full-year 2024 guidance of total production of 57,000 units, an adjusted loss of $2.7 billion and capital expenditures of $1.2 billion.

Photo: Rivian