Rivian aims to break into profitability by the end of the year

The cooperation to develop car software agreed upon between Volkswagen and Rivian at the end of June is naturally a topic in Rivian’s Q2 annual report. The US American company states that the first billion from Volkswagen has already been transferred to Rivian. It should therefore be included in the Q3 balance sheet. 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 a planned joint venture by 2026 – depending on the achievement of certain milestones.

In the joint venture, the new partners want to 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 to be used in the upcoming SSP electric platform, which will be launched on the market at the end of the decade (expected in 2028). For Volkswagen, it is a new attempt to catch up on its software backlog – the problems with the current Cariad software unit are well known.

VW cooperation revolves around R2 platform

Rivian now specifies: “The lead program for this joint venture is expected to be our R2 platform with an expected start of production during the first half of 2026. While the zonal electrical architecture and core software technology developed in the joint venture will be common across vehicle programs, R2 and other Rivian vehicles will continue to have Rivian’s highly differentiated user experience
and interface and will benefit from our vertically integrated propulsion, high voltage, and autonomous driving systems.”

The R2 is Rivian’s hope for the mass market. The company plans to build 155,000 units of the new model annually at its expanded plant in Normal following its launch in 2026. The manufacturer currently only has its premium vehicles R1T pickup and R1S SUV and the Rivian delivery van, which is primarily intended for Amazon, on the market.

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 reason behind the slow production in the second quarter was rebuilding work that paralysed the plant for three weeks. However, the cost reductions in production should pay off in the second half of the year.

Financially, Rivian continues to perform consistently: with a turnover of USD 1.16 billion, the company was at a similar level to the first quarter (USD 1.2 billion) and the second quarter of 2023 (USD 1.12 billion). The net loss from April to June totalled around USD 1.46 billion – the same as in the first quarter (USD 1.45 billion), but USD 250 million higher than in the same period of the previous year (USD 1.2 billion).

2024 target for 57,000 BEVs remains unchanged

For the current year, Rivian is forecasting an initial “modest gross profit” in the fourth quarter of the year. Among other things, the changes at the plant are expected to contribute to this. But certainly also the Volkswagen billions. Rivian also explicitly confirms the annual forecast of a total production of 57,000 units, an adjusted EBITDA of 2.7 billion US dollars and capital expenditure of 1.2 billion US dollars. In order to achieve the targeted number of vehicles, Rivian must increase its production in the second half of the year. At the end of the second quarter, 23,592 units had been produced. This means that almost 33,500 vehicles will have to roll off the production line in the third and fourth quarters.

Reuters reports that the up to $5bn investment from Volkswagen Group will help Rivian maintain its cash position until the company can start selling the R2 in 2026. The news agency also writes that Rivian is still losing thousands of dollars for every vehicle it produces. Specifically, the loss is said to amount to 39 per cent of the sales price of a vehicle.

reuters.com, rivian.com (PDF)