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Classification

Company Name

Rivian Automotive

Publish Date

2025-11-04

Industry Classification

Industry: Automotive

Sub-industry: Electric Vehicles

Document Topic

Rivian Q3 2025 Earnings Call Transcript

Summarization

Business Developments

Continued progress on R2 development: increasing quality and maturity of design validation builds; preparing manufacturing validation builds following production equipment commissioning.
Completed construction of 1.1M sq ft R2 Body Shop & General Assembly and 1.2M sq ft Supplier Park & Logistics Center; equipment bring-up and robot commissioning underway in R2 body shop.
Paint shop updates to increase annual plant capacity to 215,000 units; plan to add additional 400,000 annual units with new Georgia facility.
Groundbreaking in Georgia (expected to create ~7,500 jobs and significant local economic impact); Georgia facility intended to support R2, R3 and variants.
Launched Mind Robotics as a separate entity with $110 million seed financing; Rivian remains a partner and shareholder to develop AI-enabled industrial robotics.

Financial Performance

Q3 2025 consolidated revenues approximately $1.6 billion.
Q3 2025 consolidated gross profit of $24 million (included $125 million depreciation and $24 million stock-based comp).
Q3 2025 adjusted EBITDA loss of $602 million.

Outlook

Reaffirming 2025 delivery guidance: 41,500 to 43,500 units.
Reaffirming 2025 adjusted EBITDA loss guidance: $2.0 billion to $2.25 billion.
Expect R2 to achieve positive unit economics by the end of 2026 (R2 ramp and scale to drive volume and cost improvements).

Quotes:

"I've never been more confident in the opportunity ahead for Rivian than I am today." - Robert Scaringe, CEO and Founder, Rivian
"From an R&D perspective, our teams are executing well to ensure the development of R2 remains on track with our plans." - Robert Scaringe, CEO and Founder, Rivian
"We continue to expect to receive additional capital of up to $2.5 billion associated with our Volkswagen Group joint venture transaction." - Claire McDonough, Chief Financial Officer, Rivian
"We don't expect to have meaningful revenues from the sale of regulatory credits, and we've taken those out of our forecast." - Claire McDonough, Chief Financial Officer, Rivian
"We have sourced on a landed basis. So by contract, we have 100% of the car sourced." - Javier Varela, Chief Operations Officer, Rivian

Sentiment Breakdown

Positive Sentiment

Business Achievements:
Rivian reports tangible operational progress: completion of major R2 production buildings (1.1M sq ft body/GA and 1.2M sq ft supplier park), commissioning of paint-shop upgrades to raise plant capacity to 215,000 units, and ongoing R2 design validation with manufacturing validation builds scheduled by year‑end. Q3 delivery momentum (13,201 vehicles delivered) and a notable reduction in automotive cost of goods sold per unit (COGS per unit delivered of ~$96,300 in Q3 despite downtime) demonstrate improving unit economics and execution on product development and manufacturing readiness.

Strategic Partnerships:
The Volkswagen Group joint venture is generating meaningful Software & Services revenue (roughly half of the $416M segment revenue) and underpins a committed capital pipeline (up to $2.5B total, with $2B expected in 2026). Rivian also launched Mind Robotics as an external, AI‑robotics effort with $110M seed financing and retains strategic equity exposure. Partnership progress and these capital relationships strengthen funding optionality and validation of Rivian’s technology stack.

Future Growth:
Management emphasizes the R2 product as a large addressable opportunity (midsize 5‑seat SUV starting around $45k) and plans further capacity expansion (additional ~400,000 units at the Georgia campus, phased to start vertical construction in 2026 and first vehicles in late 2028). Autonomy and AI are positioned as strategic growth levers (Autonomy & AI Day on Dec 11), with a data flywheel from R1/R2 vehicles intended to accelerate driving model capabilities and long‑term differentiation.

Neutral Sentiment

Financial Performance:
For Q3 2025 consolidated revenue was about $1.6 billion with consolidated gross profit of $24 million (which included $125 million of depreciation and $24 million of stock‑based compensation). Adjusted EBITDA loss for Q3 was $602 million. Automotive revenue was ~$1.1 billion with automotive gross profit negative $130 million; Software & Services contributed $416 million revenue and $154 million gross profit. Production in Q3 was 10,720 units and deliveries 13,201. Cash, cash equivalents and short‑term investments totaled approximately $7.1 billion at quarter end. The company reaffirmed 2025 guidance: deliveries of 41,500–43,500 units, adjusted EBITDA loss of $2.0–$2.25 billion, CapEx of $1.8–$1.9 billion, and full‑year gross profit roughly breakeven. Management removed regulatory credit revenue from forecasts.

Negative Sentiment

Financial Challenges:
Rivian continues to record sizeable losses and negative segment profitability: large adjusted EBITDA losses YTD and a negative automotive gross profit in Q3 (-$130M). Elevated operating expenses and R&D investments for R2 and autonomy are pressuring near‑term profitability. Guidance implies substantial full‑year adjusted EBITDA losses ($2.0–$2.25B) and rising capital needs (noted step‑up in Q4 CapEx and higher CapEx expected in 2026 for Georgia). Working capital improvements in early 2025 are expected to reverse in Q4 and 2026 as inventory builds for R2, creating near‑term cash consumption.

Potential Risks:
Key risks highlighted include demand uncertainty following the end of consumer tax credits and the observed pull‑forward/softening pattern, policy and tariff volatility (though recent 232 adjustments reduced per‑vehicle tariff exposure materially, some residual impact remains), and regulatory credit unpredictability (management has excluded these from forecasts). Execution risks include R2 ramp timing, achieving targeted BOM and the projected 50% cost reduction versus R1, and successful commissioning of new manufacturing robots and processes. Funding and milestone timing risks persist around VW JV tranche timing and DOE loan draws (subject to project financing milestones). Continued high autonomous training spend, potential slower-than-expected adoption, and macro/market competition could further pressure cash flows and margins.

Named Entities Recognized in the Document

Organizations

Rivian (RIVN)
Volkswagen Group (VW)
LG (LG Energy Solution / LG)
Department of Energy (DOE)
Mind Robotics
Scout Motors
BYD
Tesla
Wolfe Research
Goldman Sachs
Canaccord
UBS
Barclays
Deutsche Bank
Bank of America
BNP Paribas
Baird
Jefferies
Cantor Fitzgerald
Wells Fargo
U.S. Securities and Exchange Commission (SEC)
Shareholder Letter (Rivian shareholder letter / filing)
Autonomy and AI Day (event)
Volkswagen ID.1 (product / VW program)

People

Robert "RJ" Scaringe (CEO & Founder, Rivian)
Claire McDonough (Chief Financial Officer, Rivian)
Javier Varela (Chief Operations Officer, Rivian)
Chip (Operator / call facilitator)
Emmanuel Rosner (Analyst, Wolfe Research)
Mark Delaney (Analyst, Goldman Sachs)
George Gianarikas (Analyst, Canaccord)
Joseph Spak (Analyst, UBS)
Dan Levy (Analyst, Barclays)
Edison Yu / Winnie Dong (Analyst(s), Deutsche Bank)
Federico Merendi (Analyst, Bank of America)
James Picariello (Analyst, BNP Paribas)
Ben Kallo (Analyst, Baird)
Philippe Houchois (Analyst, Jefferies)
Andres Sheppard-Slinger (Analyst, Cantor Fitzgerald)
Colin Langan (Analyst, Wells Fargo)
Operator (conference call operator)

Locations

United States (country)
Georgia (U.S. state; site of planned manufacturing facility)
Arizona (U.S. state; LG cell production)
Munich (city, Germany)
California (U.S. state)
Europe (region)

Financial Terms

$1.6 billion — Consolidated revenues (Third quarter, Q3 2025)
$24 million — Consolidated gross profit (Q3 2025)
$125 million — Depreciation included in gross profit (Q3 2025)
$24 million — Stock-based compensation included in gross profit (Q3 2025)
$602 million — Adjusted EBITDA loss (Q3 2025)
10,720 vehicles — Produced (Q3 2025)
13,201 vehicles — Delivered (Q3 2025)
$1.1 billion — Automotive revenue (Q3 2025)
-$130 million — Automotive gross profit (Q3 2025; negative)
$416 million — Software and Services revenue (Q3 2025)
$154 million — Software and Services gross profit (Q3 2025)
~$7.1 billion — Cash, cash equivalents and short-term investments (end of quarter)
Up to $2.5 billion — Additional capital expected from Volkswagen Group joint venture (transaction total)
$2.0 billion — Portion of VW JV capital expected in 2026
Up to $6.6 billion — Department of Energy loan (potential)
41,500–43,500 units — 2025 delivery guidance (range)
$2.0 billion–$2.25 billion — 2025 adjusted EBITDA loss guidance (range)
$1.8 billion–$1.9 billion — 2025 capital expenditures (CapEx) guidance (range)
Full year 2025 gross profit — Roughly breakeven (guidance)
$110 million — Seed round capital raised for Mind Robotics
~$96,300 (≈ $96,000) — Cost of goods sold per unit delivered (Q3 2025)
1.1 million square foot — R2 Body Shop and General Assembly Building (size)
1.2 million square foot — Supplier Park and Logistics Center (size)
215,000 units — Total annual plant capacity after paint shop updates (normal facility)
Additional 400,000 annual units — Expected capacity addition with Georgia facility (R2/R3 and variants)
7,500 jobs — Expected jobs created by Georgia investment
4695 cylindrical cell — R2 battery cell form factor (planned)
Late 2026 — Timing for LG-produced cells in Arizona (start)
3.75% MSRP offset (Section 232) — Tariff policy extended to 2030 (policy)
"A couple thousand dollars per vehicle" — Prior tariff impact (Q3 product sold)
"A few hundred dollars per unit" — Expected tariff impact going forward (policy effect)
$45,000 — R2 starting price (stated starting price)
Average new vehicle purchase price — Just over $50,000 (U.S. market benchmark)
155,000 units — R2 capacity allocation within 215,000 normal facility capacity
400,000 units — Georgia facility capacity (two phases; supports R2/R3)
Late 2028 — Georgia facility launch timing (first vehicles off line)

Products and Technologies

R2 — Smaller SUV derived from R1; lower-cost midsize 5-seat SUV (launching 2026; starts at $45,000)
R1 — Existing Rivian vehicle platform (performance/utility reference)
R3 / R3X — Planned follow-on products/variants (R3 to be produced in Georgia)
Autonomy platform — Rivian's autonomous driving platform (AI-centric approach; training/data)
Large driving model — ML model trained on fleet driving data for driving inference
Vertically integrated hardware and software — Rivian's integrated tech strategy
Autonomy and AI Day — Event to present autonomy and AI technology (Dec 11)
Volkswagen ID.1 — ~ $22,000 EV developed by Volkswagen leveraging JV technology
Software and electrical hardware joint venture with Volkswagen Group — JV contributing ~50% of Software & Services revenue
Mind Robotics — AI-enabled robotics company focused on industrial/manufacturing applications
EDV (electric delivery van / commercial vans) — Commercial vehicle product line (mentioned as EDV/van)
4695 cylindrical battery cell — Specific cell chemistry/form factor planned for R2

Management Commitments

1. Prepare launch of R2 and begin manufacturing validation builds

Commitment: Continue development and preparation for R2 launch, increasing design validation maturity and beginning manufacturing validation builds after full commissioning of production equipment.
Timeline: Begin manufacturing validation builds at year-end (2025).
Metric: Not provided
Context: Ensuring R2 development remains on track; commissioning robots in R2 body shop and bringing up equipment.

2. Increase total annual plant capacity to 215,000 units

Commitment: Update paint shop and related facilities to raise the plant's annual capacity to 215,000 units.
Timeline: Completed updates referenced as recently completed (Q3 2025); capacity effective going forward.
Metric: 215,000 annual units
Context: Supports R2 production at the "normal" facility.

3. Add 400,000 annual units capacity with Georgia facility

Commitment: Build a new U.S. manufacturing facility in Georgia to add ~400,000 annual units capacity for R2, R3 and variants.
Timeline: Groundbreaking referenced as occurring in September (2025); Georgia facility launch late 2028 (first vehicles off line).
Metric: ~400,000 annual units capacity
Context: Two-phase Georgia facility to support future product family; significant investment to expand U.S. manufacturing footprint.

4. Create jobs and economic benefits in Georgia

Commitment: Significant investment in Georgia expected to create jobs and economic benefits.
Timeline: Not provided for full realization; groundbreaking in September (2025).
Metric: 7,500 jobs
Context: Investment tied to expansion of U.S. manufacturing and technology footprint.

5. Invest in autonomy, hardware and software; host Autonomy & AI Day

Commitment: Continue investing in hardware, software and autonomy platform and present progress publicly at Autonomy and AI Day.
Timeline: Autonomy and AI Day scheduled December 11, 2025; ongoing investment over the long term.
Metric: Not provided
Context: End-to-end AI-centric approach; data from growing fleet to train large driving models.

6. Use fleet data to train large driving model for rapid rollout of driving inference models

Commitment: Collect real-world driving data from R2 and R1 fleet to train a large driving model enabling rapid rollout of updated driving inference models.
Timeline: Ongoing as fleet grows (post-R2 launch, 2026+)
Metric: Not provided
Context: Autonomy strategy leveraging vehicle data to improve driving capabilities.

7. Reaffirm 2025 deliveries guidance

Commitment: Reaffirm 2025 vehicle delivery guidance.
Timeline: Calendar year 2025
Metric: 41,500 to 43,500 units (deliveries)
Context: Guidance reiterated on Q3 2025 earnings call.

8. Reaffirm 2025 adjusted EBITDA loss guidance

Commitment: Reaffirm 2025 adjusted EBITDA loss guidance range.
Timeline: Calendar year 2025
Metric: $2.0 billion to $2.25 billion (adjusted EBITDA loss)
Context: Part of full-year 2025 financial guidance.

9. Reaffirm 2025 capital expenditures guidance

Commitment: Reaffirm 2025 capital expenditures guidance.
Timeline: Calendar year 2025
Metric: $1.8 billion to $1.9 billion (CapEx)
Context: Funding ongoing manufacturing and development activities.

10. Expect roughly breakeven gross profit for full-year 2025

Commitment: Expect full-year 2025 gross profit to be roughly breakeven.
Timeline: Calendar year 2025
Metric: Gross profit ≈ breakeven
Context: Company-level profitability target for 2025.

11. No meaningful regulatory credit revenue assumed

Commitment: Do not expect meaningful revenue from sale of regulatory credits and have removed them from forecasts.
Timeline: Near term and in forecast (through 2026 guidance planning)
Metric: Not provided
Context: Conservative forecasting due to policy uncertainty.

12. Achieve positive gross profit and unit economics for R2 by end of 2026

Commitment: Achieve R2 positive gross profit and positive unit economics.
Timeline: By the end of 2026 (exit-rate expectation)
Metric: Positive gross profit / positive unit economics (by exit of 2026)
Context: Driven by R2 ramp, scaling volumes, and cost reductions (targeting ~50% BOM reduction vs R1).

13. Launch R2 sales and deliveries (limited volumes) in first half 2026, ramp in second half

Commitment: Start saleable builds and deliveries of R2 in H1 2026 with limited volume, then ramp production in H2 2026 and into 2027.
Timeline: Sales/deliveries begin H1 2026; limited volumes H1, ramp H2 2026 and into 2027.
Metric: Not provided (volume described as limited then increasing)
Context: R2 ramp plan tied to commissioning and validation; 215,000 run-rate capacity optimization planned.

14. Receive up to $2.5 billion associated with Volkswagen JV; $2.0 billion expected in 2026

Commitment: Expect additional capital from Volkswagen Group joint venture transaction.
Timeline: Up to $2.5 billion total; $2.0 billion expected in 2026
Metric: $2.5 billion (up to), $2.0 billion expected in 2026
Context: JV includes software and electrical hardware cooperation; equity/tranche timing tied to JV milestones.

15. Partner with DOE for up to $6.6 billion loan

Commitment: Continue partnership with Department of Energy for an up to $6.6 billion loan.
Timeline: Ongoing; requires progress and will be updated as project advances (vertical construction 2026 referenced for DOE First Advance conditions)
Metric: Up to $6.6 billion loan
Context: Project-based financing for Georgia facility; favorable cost of capital subject to project milestones.

16. Begin vertical construction in Georgia in 2026

Commitment: Start vertical construction of Georgia facility.
Timeline: 2026 (plan to begin vertical construction)
Metric: Not provided
Context: Precondition for DOE project loan draws and supports Georgia facility timeline (first vehicles by end of 2028).

17. Mind Robotics spin-out and external seed financing

Commitment: Launch Mind Robotics as a separate company (Rivian as shareholder) to develop AI-enabled industrial robotics; raised $110 million seed round from external investors.
Timeline: Seed round completed (Q3 2025 referenced)
Metric: $110 million seed financing
Context: Develop robotics optimized for manufacturing and broader industrial applications; external capital financed the initiative.

18. Reduce working capital and inventory; expect working capital use in Q4 2025 and 2026

Commitment: Continue focus on reducing raw material, WIP and finished goods inventory; expect working capital to consume cash in Q4 2025 and be a use of cash in 2026 while building inventory for R2.
Timeline: Q4 2025 (consume cash); 2026 (use of cash)
Metric: Not provided
Context: Working capital normalization as R2 ramps and inventory builds for launch.

19. Provide more detailed 2026 CapEx outlook on Q4 earnings call

Commitment: Provide additional details on 2026 capital expenditures on the Q4 earnings call.
Timeline: Q4 2025 earnings call (timing implied)
Metric: Not provided
Context: Expect higher CapEx in 2026 to start vertical construction for Georgia facility and other investments.

Advisory Insights for Retail Investors

Investment Outlook

Neutral: Strong progress on R2, improving unit economics, and growing Software & Services are balanced by ongoing sizable losses (Q3 adjusted EBITDA loss $602M), negative Automotive gross profit (-$130M), and a meaningful cash use expected in Q4 and 2026.

Key Considerations

Revenue and Profit Mix: Q3 consolidated revenue was ~$1.6B with $24M gross profit; Software & Services contributed $416M revenue and $154M gross profit (~37% margin), supported ~half by the Volkswagen JV.
Automotive Unit Economics: Automotive gross profit was -$130M; COGS per unit delivered improved to ~$96,300 despite downtime, indicating material cost progress but continued losses.
R2 Ramp Timing: R2 deliveries begin H1’26 with limited volumes; ramp accelerates in H2’26 with a target for positive R2 unit economics by end of 2026—implying a 2025-1H’26 lull before scale benefits.
Capacity Expansion: Normal plant capacity increased to 215,000 units (R2 share ~155,000); Georgia adds 400,000 units for R2/R3 from late 2028—significant future scale, but execution risk and capital needs.
Cash and Liquidity: Cash/short-term investments of ~$7.1B; potential up to $2.5B additional capital from VW JV (most in 2026) and up to $6.6B DOE loan (project-based) support runway.
Guidance and Losses: 2025 deliveries 41.5k–43.5k; 2025 adjusted EBITDA loss $2.0–$2.25B; 2025 gross profit roughly breakeven—profitability inflection still ahead.
Policy/Tariffs: Tariff impact improved from ~“under a couple thousand dollars” per vehicle in Q3 to “a few hundred dollars” per unit on new builds under revised Section 232, aiding future margins.
Demand Environment: Management noted softer October demand post-IRA pull-forward; execution relies on R2 value proposition at ~$45k segment to broaden TAM.
Working Capital and FCF: Working capital aided cash in Q2–Q3 but expected to consume cash in Q4 and throughout 2026 as R2 inventory builds.
Partnerships: Volkswagen JV advancing (background IP revenue growing; ID.1 leveraging Rivian tech); regulatory credit sales removed from forecasts, limiting that upside.

Risk Management

Monitor R2 Milestones: Track completion of manufacturing validation builds (year-end) and the H1’26 saleable builds to gauge ramp timing and execution risk tied to 2026 unit economics.
Watch COGS/Unit Trend: Follow quarterly COGS per vehicle and fixed-cost absorption to confirm sustained material cost improvements and scaling benefits as plant utilization rises.
Liquidity Tracking: Compare quarterly cash burn versus the $7.1B balance and timing of VW JV inflows (up to $2.5B, most in 2026) and DOE loan progress to assess runway.
Policy Sensitivity: Monitor tariff and regulatory shifts; the move to “few hundred dollars” per unit on new builds reduces risk, but reversals could pressure margins.
Software & Services Visibility: Track VW JV milestone recognition and services growth to validate durability of the $416M revenue/$154M gross profit contribution.
Demand Indicators: Watch order intake and delivery cadence post-IRA changes and through R2 launch to assess pricing power and marketing effectiveness.
Working Capital Discipline: Review inventory levels and cash tied up during the 2026 R2 ramp to manage free cash flow expectations.

Growth Potential

R2 Mass-Market Entry: R2 targets the high-volume 5-seat SUV segment at a ~$45k starting price, with improved BOM (4695 cells from LG in AZ starting late 2026) and planned positive unit economics by end-2026.
Software & Services Expansion: High-margin revenue ($416M in Q3; ~$154M gross profit) from VW JV and services offers diversification and margin uplift potential.
Manufacturing Scale-Up: Normal capacity to 215k (R2/R1/EDV) plus Georgia’s planned 400k units for R2/R3 supports multi-year volume growth.
Autonomy/AI Roadmap: Upcoming Autonomy and AI Day (Dec 11) and growing fleet data aim to enhance differentiation and potential monetization.
Tariff Tailwinds and Exports: Reduced U.S. tariff impact per unit and Europe’s 0% import duty path create a more attractive future export opportunity (timing not yet announced).
Material Cost Progress: Q3 recorded one of the best quarters for automotive COGS per unit driven by material cost improvements, supporting margin trajectory.
Commercial Vans and Services: Consistent EDV volumes and growth in remarketing/repair and maintenance bolster non-vehicle revenue streams.

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