Rivian Automotive(US:RIVN)2024-11-08 01:18Financial Data and Key Metrics Changes - In Q3 2024, Rivian produced 13,157 vehicles and delivered 10,018 vehicles, generating $874 million in revenue [16] - Total gross profit was negative $392 million, with a gross loss per vehicle delivered of approximately $39,100 [18] - GAAP operating expenses were $777 million, the lowest level in three years, reflecting cost-saving initiatives [19] Business Line Data and Key Metrics Changes - Demand for R1 vehicles was negatively impacted by production disruptions and a challenging consumer backdrop [17] - The introduction of the second generation R1 platform is expected to enable a 20% material cost reduction by Q4 2024 compared to Q1 2024 [19] - Rivian reaffirmed its annual production guidance of 47,000 to 49,000 vehicles and delivery outlook of 50,500 to 52,000 vehicles for 2024 [20] Market Data and Key Metrics Changes - The R1S is the most popular SUV over $70,000 in California, indicating strong market demand [14] - Rivian anticipates approximately $300 million in regulatory credit sales for 2024, which will contribute to revenue growth [20] Company Strategy and Development Direction - Rivian is focused on ramping up the Gen 2 platform and addressing supply chain challenges as a short-term issue [8][9] - The R2 program is on track for a 2026 launch, with a target price starting at $45,000, aiming to capture market share similar to R1 [10][24] - The joint venture with Volkswagen is progressing well, with expectations for significant capital support for Rivian's growth [13][24] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, emphasizing the importance of creating compelling products to drive electrification [14] - The company is addressing component shortages impacting production and expects to recover capacity in the coming weeks [51] - Rivian aims for a positive gross profit in 2025, although not every quarter is expected to be profitable [56] Other Important Information - Rivian's cash, cash equivalents, and short-term investments total $6.7 billion, which will support its capital roadmap for growth [24] - The company is implementing lean manufacturing principles to improve operational efficiency [43][46] Q&A Session Summary Question: What is the improvement in gross profit and implications for unit economics on R1? - Management noted that revenue per unit growth, driven by regulatory credit sales and improved average selling prices, will enhance gross profit [27] Question: What percentage of volume is pre-ordered versus sold out of dealer inventory? - Lease penetration was 42%, and most customers benefiting from the $7,500 tax credit are in the leasing segment [34] Question: Can you decompose the third quarter COGS per unit? - Management indicated that Q3 was challenging due to supplier issues, but Q4 material costs are projected to be 20% lower than Q1 [39] Question: What is the status of the Volkswagen joint venture? - The joint venture is expected to close before year-end, with defined milestones for financing [80] Question: What are the expectations for regulatory credits in 2024? - Management expects to achieve $300 million in regulatory credit sales due to increased underlying value and sales opportunities [53]