Q4 2024 Gross Profit of $170M for Rivian

[140 degrees]

I'm fine with the results and the forecast. On the earnings call, Rivian forecast a slight year over year decline in shipments with an expected increase in average selling price. Given all of the risks in the year ahead, it seems like a reasonable projection. The stock was down the next day about the same as Tesla. So the market did not have a strong reaction to the announcement.

What are some of the downside risks? The federal incentive could (will?) go away. Auto loan rates might go up instead of down. Tariffs could force a price increase because of rising components cost. Tesla might do a big price cut to avoid another year of dropping shipments. Elon forecast a 20-30% increase in Tesla shipments for 2025, and the January numbers are showing a large decline. How will he react? Tesla is unpredictable at this point. Wall Street expects Tesla shipments to be down for the year.

I'm also very happy that Rivian did not propose price reductions on the R1s. You may recall the brutal depreciation that Tesla owners experienced when Tesla did large price reductions.
https://qz.com/tesla-resale-value-depreciation-elon-musk-price-cuts-1851327545

I appreciate that Rivian is keeping their eye on the prize. R1 will not make or break the company. It is doing a great job of building the brand and a loyal customer base. Rivian needs to build out their service center network and then execute on building a low cost and highly manufacturable R2.
On schedule!! And R3!!

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[BigSkies]

I list it as solid results. Rivian did what they committed to do even with production hiccups in Q4. Getting to positive gross margin is a big deal, and I remember a lot of skepticism on this forum about whether they'd manage it.

Maintaining positive gross margins will slow cash burn from operations considerably. Although a decent amount more will be going out the door for R2 and Georgia Capex.

I don't know why people were expecting major delivery growth in 2025? The R1 platform clearly has demand of around 40-45k vehicles annually at the current price points. I don't think it will ever be more than that outside of expanding internationally or a lower priced trim.

I had hoped for a slightly higher delivery forecast on the EDV with it opening up to new customers. But it sounds like new customers will mostly offset slower deliveries to Amazon.

 

[DuoRivian]

I list it as solid results. Rivian did what they committed to do even with production hiccups in Q4. Getting to positive gross margin is a big deal, and I remember a lot of skepticism on this forum about whether they'd manage it.

Maintaining positive gross margins will slow cash burn from operations considerably. Although a decent amount more will be going out the door for R2 and Georgia Capex.

I don't know why people were expecting major delivery growth in 2025? The R1 platform clearly has demand of around 40-45k vehicles annually at the current price points. I don't think it will ever be more than that outside of expanding internationally or a lower priced trim.

I had hoped for a slightly higher delivery forecast on the EDV with it opening up to new customers. But it sounds like new customers will mostly offset slower deliveries to Amazon.

Agree that the R1 demand is around 40-45K a year. They don’t have a production constraint but a demand constraint hence the incentives.

 

[Donald Stanfield]

Agree that the R1 demand is around 40-45K a year. They don’t have a production constraint but a demand constraint hence the incentives.

I think we also need to mention this demand constraint is normal and expected in the price point the R1 plays in. In fact the R1 series is in demand among other vehicles in the category.

 

[SANZC02]

Agree that the R1 demand is around 40-45K a year. They don’t have a production constraint but a demand constraint hence the incentives.

I would expect demand constraints could get tighter in the coming months with what looks to be shaping up as a challenging economic environment this year. Historically higher inflation and interest rates tend to hit the auto industries pretty hard.

 

[Riviot]

strategically cost-averaging my investments

Hey now, some of us are still buying shares to try to get our average down from buying too many at that IPO price, LOL. ?

I buy my $RIVN the way I play blackjack: split everything and double-down, baby!

 

[mkg3]

Agree that the R1 demand is around 40-45K a year. They don’t have a production constraint but a demand constraint hence the incentives.

Since Rivian forecasted to deliver 46K~51K vehicles, your take leaves RCV about 6k vehicles - just about what Amazon is schedule to accept (Rivian said they pull forward deliveries in the 2024Q4 so expectation is less than 10k vehicles).

My guess is that those that wanted R1 now has a R1. It's like all new things, right? There is a pent-up demand so the initial take is great but falls off. Just look at CT, or worse, Taycan.

As transition happens to R2, sale of R1 probably will drop lower than 40~45/yr. According to Grok3 about 150K SUVs are sold over $90K. If one assumes majority of R1 sales are SUVs, then Rivian needs to capture a large portion of SUV sales in the price range. The question is do these buyers want pure BEV? Vast majority of EV uptake currently is in the low to mid range vehicles (thanks to Chinese makers).

So lets hope that Rivian does not experience further delays in R2 release and they can retain the target price point.

 

[JohnB R1T]

R1 going forward
First, a few points about my R1T (gen 1):
I didn't buy it to save the planet
I didn't buy it to save on "fuel" costs
I didn't buy it for regular road trips

All that being said, my "lifetime" efficiency is about 2.2 mi/khw over 20,000+ miles
I can count the number of charges away from home on 1 hand...including at my daughter's house where we installed a 14-50 in her panel in the garage)
I pay my electricity provider a hair over 12 cents a kwh...that's 5.45 cents/mile...hard to beat with any ICE vehicle that you'd want to be in.

With RJ (and others) now raising the rates on the RAN et al to $.68/kwh that cost rises to $0.31/mile.
For comparison, with gas prices at $3.10/gallon, any ICE vehicle which gets >10 mpg is going to be cheaper to operate (based on fuel alone, ignoring oil changes and the like). My wife's Lexus NX350h AWD gets close to 35 on the highway. Every time.

This is not going to bode well for the (relatively) extremely inefficient R1 Quad platform. People will look at this and say "Well, hell" A couple of road trips a year won't break the bank, but the thought of a coast-to-coast trip here and there might be a decision maker. As it stands, with any long trip of a week's duration or more, you'd likely be money ahead to rent an unlimited mileage luxury ICE SUV and leave the R1 at home.

For frame of reference...I can drive from home to Austin and back without recharging, I can drive from home to Houston without charging, and I can't drive from home to Dallas without charging along the way. It would be all I could do (in the EV wasteland that is NM) to get 600 miles to Ruidoso, NM with three stops to charge.

This is not the way to encourage sales.

 

[jbssfelix]

Since Rivian forecasted to deliver 46K~51K vehicles, your take leaves RCV about 6k vehicles - just about what Amazon is schedule to accept (Rivian said they pull forward deliveries in the 2024Q4 so expectation is less than 10k vehicles).

My guess is that those that wanted R1 now has a R1. It's like all new things, right? There is a pent-up demand so the initial take is great but falls off. Just look at CT, or worse, Taycan.

As transition happens to R2, sale of R1 probably will drop lower than 40~45/yr. According to Grok3 about 150K SUVs are sold over $90K. If one assumes majority of R1 sales are SUVs, then Rivian needs to capture a large portion of SUV sales in the price range. The question is do these buyers want pure BEV? Vast majority of EV uptake currently is in the low to mid range vehicles (thanks to Chinese makers).

So lets hope that Rivian does not experience further delays in R2 release and they can retain the target price point.

Valid points, but I'm hoping that the R1 doesn't drop off at the same rate as others. The R1S, notably, is in a segment that is still fire-hot (large 3-row SUVs). The Cybertruck simply doesn't compete with the F150/etc, the Taycan/Model S/Lucid Air are all sedans/wagons, which is a dying breed in any form of propulsion. I have two young kids, so I get a weird first-hand visual of the trendiness of 3-row large SUVs among the soccer mom crowd. And I'm still seeing a slow, but steady, increase of R1S's in the parking lot mixed in with the Tahoes and Sequoias.

 

[ThirteenElectrics]

Rivian is still huffing and puffing trying to get too big to fail, but at this point, the decision by Rivian to issue more debt instead of more stock looks unwise (just like I said at the time). In a fever-dream of optimism, Rivian has issued $5.5 billion in bonds and $1.3 billion of it is due in the Trump administration (2026). Rivian's cumulative losses are already -$23B, some more dilution wouldn't not have hurt that much. Or at least, it wouldn't hurt then as much as it's going to hurt now. Fortunately, I believe RJ's veto power over the board expires in November 2026, so we may get better decisions then.

There's also the Georgia loan, but that's probably cheap debt with a long maturity. To the extent that loan is used to build a redundant factory instead of battery plant, it is dumb and bad for the environment, but the terms of the loan are probably decent for Rivian and won't kill them in the medium term.

In addition to the tax credits, which look dead, if the regulatory credit market also goes away, things get worse. I hate that Rivian sells pollution credits (negating any environmental benefit to buying one), but the program itself (that is, the government, not Rivian) does move the needle by creating incentives for automakers push at least some token EVs.

 

[ThirteenElectrics]

I wonder how much of the demand in Q4 was post-election, as people realized that the EV tax lease credit will likely be going away in the new year. There was also likely carry forward demand from the sales (not lease) federal credit expiring for Rivian at the end of 2024.

 

[mkg3]

Valid points, but I'm hoping that the R1 doesn't drop off at the same rate as others. The R1S, notably, is in a segment that is still fire-hot (large 3-row SUVs). The Cybertruck simply doesn't compete with the F150/etc, the Taycan/Model S/Lucid Air are all sedans/wagons, which is a dying breed in any form of propulsion. I have two young kids, so I get a weird first-hand visual of the trendiness of 3-row large SUVs among the soccer mom crowd. And I'm still seeing a slow, but steady, increase of R1S's in the parking lot mixed in with the Tahoes and Sequoias.

Yeah, we've had our share of soccer days with our two boys. During that time, we had Durango, XC90 and Odyssey (aasp! a minivan). By the time they reached u12, both kids were in separate clubs (one was far more talented than the other) so my wife an I split the soccer duties. So, the need for 3 row declined at that point.

The more talented kid went on to play for a university, graduated and now is working. The other kid played through high school, when to college, graduated and is working too. Both kids still play. The first one plays in a competitive adult league while the second plays in an adult rec league. Soccer is a great life long sport and keeps them in shape.

We got our R1S, because the wife liked it (she always liked 2 box SUV). The third row has been used once in 1.5 years (group of friends went to dinner together).

Back to your hope that R1S decline be different than others. Maybe so for few percentage points, if at all. Nothing significant enough to off set the decline though.

One of the main reasons for high end EV sales decline is the deprivation. Many of EVs that costs around $100K and above have seen 40~50% depreciation in a year or two. There is a huge reluctance to buy a new high end EVs. Not to say that people are not buying them, it's just few people.

With that said, it doesn't matter if it's a sedan, SUV or worse a coupe. Its the price point vs addressable market for the buyers.

 

[Hereforthesnacks]

The issue with Rivian is still the same. They have a CEO who is following the Tesla playbook. But it’s 2025 and not 2015.

Plus, Rivian has gained a reputation in key markets as having mediocre reliability with very long timelines for service.

Now demand is soft. Analysts are cutting price targets. And it’s going to get a lot harder to raise money.

There is one good shot here: get a CEO with ops focus.

 

[R1Thor]

The issue with Rivian is still the same. They have a CEO who is following the Tesla playbook. But it’s 2025 and not 2015.

Plus, Rivian has gained a reputation in key markets as having mediocre reliability with very long timelines for service.

Now demand is soft. Analysts are cutting price targets. And it’s going to get a lot harder to raise money.

There is one good shot here: get a CEO with ops focus.

I couldn't disagree with you more.
RJ is following RJ's (Rivian's) playbook.

And I for one (don't believe I'm alone) believe RJ Scaringe is one of the biggest benefits and absolute best chance Rivian has to succeed, bar none.

He has an Engineering background and mentality. In the days of late-stage-capitalism focused on profits before progress and instant gratification for figuring out the next quarter, RJ and his team are thinking 5 and 10 years down the road. THAT is what they need for long-term growth.

My completely unsolicited .02 anyway...

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