Rivian aims to reach profitability by year-end

The cooperation in the development of automotive software, agreed between Volkswagen and Rivian at the end of June, is naturally the subject of Rivian’s annual report for the second quarter. The American company states that the first billion from Volkswagen has already been transferred to Rivian. It should therefore be included in the balance sheet for the third quarter. This is just the beginning: the Wolfsburg-based company has stated that it will invest up to three billion dollars in Rivian and up to two billion dollars in the planned joint venture by 2026 – depending on the achievement of certain milestones.

The joint venture will see the new partners create a new E/E architecture—based on Rivian’s existing software and electrical architecture—as a technology platform for software-defined vehicles. The new development is set to be used in the upcoming SSP electric platform, which will be launched at the end of the decade (expected in 2028). For Volkswagen, this is a new attempt to catch up on software—the problems with its current software unit, Cariad, are well-known.

VW cooperation focuses on the R2 platform

Rivian now specifies: “The lead program for this joint venture is expected to be our R2 platform, with production expected to begin in the first half of 2026. While the zoned electrical architecture and core software technology developed in the joint venture will be common across all vehicle programs, the R2 and other Rivian vehicles will continue to have very distinct Rivian user experiences.
and interface, and will also benefit from our vertically integrated drive systems, high voltage and autonomous propulsion.”

The R2 is Rivian’s hope for the mass market. The company plans to produce 155,000 units of the new model per year at an expanded factory in Normal once it comes online in 2026. The automaker currently has only its premium vehicles on the market: the R1T pickup and R1S SUV, and the Rivian delivery van, which is primarily aimed at Amazon.

Between April and June, Rivian produced 9,612 vehicles and delivered 13,790. In the first quarter, 13,980 were produced and 13,588 were delivered. The slow production in the second quarter was due to a reconstruction project that shut down the plant for three weeks. However, the cost reductions should pay off in the second half of the year.

Financially, Rivian continues to perform well: With revenue of $1.16 billion, the company was on par with the first quarter ($1.2 billion) and the second quarter of 2023 ($1.12 billion). Net loss from April to June totaled about $1.46 billion – the same as in the first quarter ($1.45 billion) but $250 million more than in the same period last year ($1.2 billion).

The 2024 target of 57,000 electric vehicles remains unchanged

For the current year, Rivian is forecasting an initial “modest gross profit” in the fourth quarter of the year. Changes at the plant are expected to contribute to that, among other things. But Volkswagen’s billions will certainly contribute, too. Rivian also explicitly reaffirms its full-year forecast of 57,000 total units, $2.7 billion in adjusted EBITDA, and $1.2 billion in capital expenditures. To reach that target, Rivian needs to ramp up production in the second half of the year. At the end of the second quarter, 23,592 units were produced. That means nearly 33,500 vehicles will have to roll off the production line in the third and fourth quarters.

Reuters Agency reports that an investment of up to $5 billion from Volkswagen Group will help Rivian maintain its cash position until the company can begin selling the R2 in 2026. The news agency also writes that Rivian continues to lose thousands of dollars on every vehicle it produces. Specifically, that loss is expected to be 39 percent of the vehicle’s selling price.

reuters.com, rivian.com (PDF)