Rivian, the electric vehicle (EV) maker, recently released its quarterly results for the first quarter. While the company reported mixed results, it expects cost savings from shifting production of its upcoming R2 model to its plant in Normal, Illinois. Rivian also trimmed its capital expenditure forecast and reaffirmed its full-year loss forecast.
In terms of revenue, Rivian reported $1.20 billion for the quarter, which beat expectations and represented an 80% increase from the previous year. However, the company posted a higher loss per share than estimated, with an operating loss that exceeded expectations as well.
Despite these results, Rivian remains optimistic about its future. CEO RJ Scaringe highlighted several milestones achieved during the quarter, including producing the company’s 100,000th vehicle and unveiling a new midsize platform that will underpin their upcoming models.
By moving the production of the R2 to its existing plant in Normal, Illinois instead of its planned Georgia facility, Rivian expects to save over $2.25 billion. This decision is expected to increase the total annual capacity of the Normal plant to 215,000 units, including up to 155,000 units of the R2.
While Rivian’s stock initially slipped 5% following the announcement, the company believes that its path to achieving a modest gross profit in the fourth quarter of this year remains intact. They are confident in their ability to achieve this goal due to their retooling upgrade and other efficiency improvements.
To bring down costs, Rivian recently implemented a 10% reduction in salaried staff. This move was made in response to economic uncertainty but is expected to contribute to their goal of reaching profitability.
Despite these optimistic statements, Rivian did not reiterate its previous claim that it was “very close” to achieving a positive contribution margin by the end of 2023. However, CEO Scaringe assured stakeholders that the company has not abandoned its plans for the Georgia facility and will utilize it once the R2 is ready for a larger rollout.
In addition to their US operations, Rivian announced plans to launch the R2 in Europe, which they see as a significant market opportunity. Currently, the company does not sell its larger R1 vehicles on the continent, making the expansion into Europe an important strategic move.
Overall, Rivian’s quarterly results may have been mixed, but their cost-saving measures and production adjustments indicate a commitment to long-term success. With a focus on achieving profitability and expanding into key markets, Rivian remains a company to watch in the EV industry.
