Rivian Automotive(US:RIVN)2025-11-04 23:00Financial Data and Key Metrics Changes - Consolidated revenues for Q3 2025 were approximately $1.6 billion, with a gross profit of $24 million, which included $125 million of depreciation and $24 million of stock-based compensation expense [8][10] - Adjusted EBITDA losses for Q3 were $602 million, with a quarter-over-quarter increase in overall operating expenses driven by elevated R&D investments and SG&A growth [8][10] - The company ended the quarter with approximately $7.1 billion in cash, cash equivalents, and short-term investments, showing improvements in working capital [10][11] Business Line Data and Key Metrics Changes - In the automotive segment, the company produced 10,720 vehicles and delivered 13,201 vehicles, generating $1.1 billion in automotive revenue, although automotive gross profit was negative $130 million due to low fixed cost absorption [9][10] - The software and services segment reported $416 million in revenue and $154 million in gross profit, with significant contributions from a joint venture with Volkswagen Group [10] Market Data and Key Metrics Changes - The average new vehicle purchase price in the U.S. is now just over $50,000, with the most popular configuration being a five-seat SUV or crossover, which aligns with the target market for the upcoming R2 model [4][17] - The company is optimistic about capturing market share with R2, which is designed to be a cost-effective option in the midsize SUV segment, starting at $45,000 [17][58] Company Strategy and Development Direction - The company is focused on launching the R2 model and developing its technology roadmap, including autonomy and vertically integrated hardware and software [3][6] - A significant investment in Georgia is expected to create 7,500 jobs and provide billions in economic benefits, supporting the expansion of U.S. manufacturing and technology [6][11] - The company aims to differentiate its autonomous capabilities through an end-to-end AI-centric approach, leveraging data from its growing fleet of vehicles [6][7] Management's Comments on Operating Environment and Future Outlook - Management acknowledged near-term uncertainties from trade, tariff, and regulatory policies but remains focused on long-term growth and value creation [8] - The company reaffirmed its 2025 delivery guidance range of 41,500-43,500 units and expects to achieve positive gross profit and unit economics for R2 by the end of 2026 [11][12] Other Important Information - The company is not planning to offer an extended range electric vehicle (eRev) and remains committed to a fully electric future [35] - The relationship with Volkswagen Group remains strong, with ongoing collaboration on multiple programs [27][28] Q&A Session Summary Question: Demand environment in the U.S. post-consumer tax credit removal - Management expected a pull forward of demand into September due to the end of the IRA program, resulting in softer demand in October, but remains confident in the long-term demand for R2 [16][17] Question: COGS per vehicle and future cost expectations - COGS for Q3 was approximately $96,300 per vehicle, with expectations for improvement as R2 ramps up production and scales [21][22] Question: Update on the Volkswagen relationship - The relationship is strong, with ongoing collaboration and product development, including the Volkswagen ID.1 [27][28] Question: Tariff impacts and battery sourcing strategy for R2 - The company expects a reduced tariff impact moving forward and plans to source battery cells domestically in Arizona [42][44] Question: Free cash flow and working capital outlook - Working capital is expected to consume cash in Q4, with a normalization anticipated as production ramps up in 2026 [63][64] Question: R2 pricing strategy and market entry - The company plans to launch R2 with a well-appointed dual-motor variant, with additional trims to follow as production scales [70][71]