TECH - From Volkswagen Partnership To Trimming Costs And Introducing Cheaper EVs: Rivian Steps On The Pedal To Touch Profitability | Benzinga
California-based EV maker Rivian Automotive Inc. (NASDAQ:RIVN) has been gaining investor interest in the past week, mostly due to a major investment by German automaker Volkswagen in the latter part of June. But there is more to the company’s attempts at achieving profitability.
Financial Shape: Rivian, despite its R1 vehicle offerings that have been well received, is yet to turn a profit. The company has been accumulating losses for every vehicle it delivered until the first quarter of 2024 when it made a loss of nearly $39,000 for each of the 13,588 vehicles it sold.
While this is a significant loss to incur on a vehicle starting at roughly $70,000, it is still lower than the first quarter of 2023 when it incurred a loss of about $67,000 on every vehicle it delivered.
The company, until recently, was looking to scale production to bring down losses. In the third quarter of 2023, the company sold over 15,000 vehicles and recorded a loss of about $31,000 on each, the least quarterly loss per delivery recorded by the company.
However, for 2024, Rivian expects to make only 57,000 vehicles, largely in line with its production rate last year when it produced 57,232 vehicles and delivered 50,122.
Race To Profitability: Rivian is looking to turn its first-ever quarterly gross profit in the fourth quarter of 2024. The latest in its strategy is the announcement of its intent to form a joint venture with Volkswagen aimed at creating software-defined vehicle platforms to be used in both players' future electric vehicles starting in the second half of the decade.
As part of the terms of the deal, Volkswagen will initially invest $1 billion in Rivian and then up to $4 billion until 2026. Both companies shall hold a 50% stake in ...