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Rivian’s latest quarterly results reveal a performance that did not meet market expectations, as the company reported an adjusted loss per share of 99 cents, compared to the anticipated loss of 92 cents. Revenue for the quarter was recorded at $874 million, falling short of the expected $990 million.
In light of these results, Rivian has adjusted its forecast for earnings before interest, taxes, depreciation, and amortization (EBITDA), now projecting a loss between $2.83 billion and $2.88 billion. This marks a revision from an earlier estimate that anticipated a loss of approximately $2.7 billion.
Despite these challenges, the company remains optimistic about achieving a “modest positive gross profit” in the fourth quarter of this year, a target that has garnered significant attention from investors and analysts alike. CEO RJ Scaringe emphasized the company’s commitment to profitability during an interview with CNBC, stating, “Our main goal is to drive profitability. As we look at the fourth quarter, we continue to lean towards gross margin.”
For the third quarter, Rivian reported a negative gross profit of $392 million, an improvement over the $477 million loss recorded during the same period last year. This suggests some progress in managing production costs, although the company still faces significant hurdles.
Following the earnings announcement, Rivian’s stock experienced a 2% increase in after-hours trading, recovering from an initial dip. The stock closed at $10.05, reflecting a 3.5% gain for the day. Analysts, including Tom Narayan from RBC Capital Markets, believe that the company’s reaffirmation of its gross profit goals could positively influence its stock performance. Narayan noted that many in the market had speculated Rivian might abandon its profit target, and the decision to maintain it could lead to increased investor confidence.
In examining Rivian’s financial health, the company reported a net loss of $1.1 billion for the quarter, a reduction from the $1.37 billion loss experienced in the third quarter of the previous year. Revenue also showed a decline, dropping 34.6% year-over-year, which includes $8 million generated from regulatory credit sales. This revenue decrease was primarily attributed to supplier outages that have disrupted production timelines.
Scaringe addressed these production challenges, acknowledging the difficulties posed by supplier issues and referring to them as a “short-term problem.” The company had previously revised its annual production forecast, reducing it from 57,000 units to a range of 47,000 to 49,000 units due to these ongoing supply chain disruptions. This production estimate was reiterated in the latest earnings call.
The supplier challenges coincided with Rivian’s efforts to launch its second-generation “R1” vehicles, which are set to feature significant updates in the 2025 model year, particularly concerning the vehicle’s interior components.
In a strategic move separate from its quarterly results, Rivian also announced a significant partnership with LG Energy Solution aimed at supplying U.S.-made battery cells for the forthcoming R2 vehicles anticipated for release in 2026. This collaboration is expected to bolster Rivian’s production capabilities and enhance its competitive edge in the electric vehicle market.
As Rivian navigates this challenging period, the focus remains on overcoming supply chain obstacles while striving for profitability. The company’s ability to adapt and respond to current market conditions will be critical as it seeks to solidify its position in the rapidly evolving electric vehicle landscape.
Associated media – Connected media
