Rivian's quarterly loss balloons, but EV maker says gross profit is within sight

By Claudia Assis

Rivian says it lost $6,000 less per vehicle last quarter

Rivian Automotive Inc. late Tuesday reported quarterly results that were largely in line with expectations, with earlier, steeper stock losses narrowing as investors seemed to focus on hopes that the EV maker reaches a measure of profitability by the end of the year.

Positive gross profit by the fourth quarter of the year, as Rivian promised in a letter to shareholders accompanying results, "would be a major proof point for management, especially considering that the company continues to lose $30k+ per vehicle even through" the second quarter, RBC Capital analyst Tom Narayan said in a note.

Rivian (RIVN) lost $1.46 billion, or $1.46 a share, in the second quarter, compared with a loss of $1.20 billion, or $1.27 a share, in the year-ago period. Adjusted for one-time items, Rivian lost $1.13 a share.

Revenue rose to $1.16 billion, from $1.12 billion a year ago, mostly thanks to the delivery of 13,790 Rivian EVs, the company said.

FactSet consensus called for an adjusted loss of $1.24 a share on sales of $1.15 billion.

Shares fell 7% after hours.

Chief Executive RJ Scaringe said in a call with analysts following results that for Rivian "to achieve the full potential of our vision, we need to aggressively drive toward profitability."

Scaringe also mentioned Rivian's deal with Volkswagen AG (XE:VOW), saying that the proposed team-up is "moving along very well, and we expect to close the joint venture in the fourth quarter of this year."

In the letter to shareholders, Rivian said it expects to reach "a modest gross profit" in the fourth quarter, and reiterated its 2024 guidance of making 57,000 EVs. It produced 57,232 vehicles last year, above guidance of 54,000 vehicles.

In the call, Chief Financial Officer Claire McDonough highlighted that Rivian cut its gross profit loss per vehicle by about $6,000, to $32,705, and made progress on reducing its gross inventory balance.

"We believe these trends will result in further improvements in our cash usage," McDonough said.

Rivian's deal with Volkswagen Group has boosted the stock and has been seen as a vote of confidence in Rivian's technology.

See also: Rivian's VW partnership seen as 'game changer' for EV maker's prospects

Shares of Rivian have been the rare spot of green among auto stocks this week, but that advantage evaporates taking the longer view. The stock is down about 37% this year, contrasting with gains of around 11% for the S&P 500 index SPX.

-Claudia Assis

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08-06-24 2014ET

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