Rivian lost $1.46B in Q2 as it drives toward a VW-linked future
Rivian's financial losses have crept up as it pushed out the last of its first-generation R1 trucks and SUVs in favor of newer, more cost-efficient versions -- a sign of just how much the company could use the $5 billion it could get as part of a recently announced deal with Volkswagen Group.
The company announced Tuesday that it lost $1.46 billion in the second quarter of 2024, up from a first-quarter loss of $1.45 billion. The loss was nearly $300 million worse than the second quarter last year.
As a result, Rivian's balance of cash and cash equivalents was $5.76 billion at the end of the quarter. That includes the first $1 billion from VW.
This all comes as Rivian has begun shipping revamped versions of the R1 that are simpler and cheaper to make. Rivian CEO RJ Scaringe has said these vehicles, shipped at scale, should help the company reach positive gross profit by the end of 2024.
But since Rivian is expecting to make and sell roughly the same number of EVs this year as it did in 2023, all eyes are on its second model -- the R2 SUV, due out in 2026 -- to help establish it as a sustainable company.
Until then, Rivian will be helped by the additional $4 billion that VW will pour into the young automaker -- as long as the two companies finalize the agreement. That is supposed to happen sometime in the fourth quarter of this year. Once complete, the deal will see Rivian and VW create a joint venture that will leverage Rivian's advanced electrical architecture and software. That technology will flow into Rivian's R2 and the many VW Group's EVs, and possibly ones built by other automakers.
Scaringe was careful not to share much new information about the VW tie-up during a conference call Tuesday. But chief software officer Wassym Bensaid said Rivian has a drivable demonstrator vehicle equipped with the company's electronic components and its software stack.
"We're actually extremely excited with the progress that we're making in the electrical architecture integration analysis. Our engineers have been working very closely with the Volkswagen Group," Bensaid said. "We're moving forward really, really well in understanding how our technology will scale up and down the entire Volkswagen Group portfolio."
Rivian had previously said in the run-up to the announcement that it had completed "significant work" to "validate that Rivian’s electrical architecture and software are compatible with Volkswagen Group’s vehicles." Harry Porter, a spokesperson for Rivian, declined to offer any further information about the demonstrator vehicle.
Until the VW deal is done, Rivian will turn to other methods to pad out its business. For instance, the company said it sold $17 million worth of regulatory credits to other companies in the second quarter. Scaringe said on the call that major automakers scaling back EV ambitions has created a "void of products" that is increasing the opportunity for Rivian to sell these credits -- so much so, he said, that Rivian could wind up selling more than it had anticpated.
The company is also building out an EV charging network to support its vehicles that could pull in some extra revenue, especially as Rivian allows other EVs to access it starting later this year.