- Scaringe is betting on next year. “2027 is really an inflection year for us,” Rivian founder and CEO RJ Scaringe told CNBC in an exclusive interview marking five years since the company’s Nov. 10, 2021, Nasdaq debut at $78 per share.
- The R2 is already carrying the business. Rivian delivered a record 19,248 vehicles in the third quarter, up 46% year over year, and said the roughly $45,000 entry-level R2 SUV was already its best-selling vehicle, outselling the R1 and its commercial van.
- Autonomy is the next leg. Rivian plans to roll out “point-to-point” driving, first to employees and then to customers, over the coming weeks and months, with autonomous vehicles with Uber expected by 2028, and Scaringe said Rivian aims to exceed Tesla’s capabilities.
- Shareholders are still underwater. Rivian’s stock is down more than 80% since its IPO, including a nearly 30% decline this year, and its $17.70 target price, based on analyst estimates compiled by FactSet, implies roughly 26% upside from Monday’s close, CNBC reported.
What Happened?
Rivian said its automotive cost of goods sold per vehicle improved by more than $12,000 quarter over quarter in the third quarter, helped by a higher R2 mix and better fixed-cost leverage. The company generated $176 million of consolidated gross profit in the quarter, though its automotive business posted an $80 million gross loss while software and services produced $256 million of gross profit at a 42% margin. Its Normal, Illinois, plant can build 215,000 vehicles a year, including up to 155,000 R2s, and a new Georgia factory is planned to add up to 300,000 units annually once its first phase is completed in late 2028.
Why It Matters?
The question for investors is whether R2’s cost gains can outrun rising spending on autonomy and the Georgia plant. “Funding has long been a key debate for Rivian investors,” Deutsche Bank analyst Edison Yu wrote, noting a multi-year path to cash flow breakeven “will be less attractive to investors.” Rivian ended the third quarter with $5.5 billion in cash, cash equivalents and short-term investments and expects total available future liquidity of about $13 billion including credit, Volkswagen and Uber partnerships and a $4.5 billion Department of Energy loan. Scaringe said the company will be “opportunistic” about raising more capital while staying “very focused on getting the profitability.”
What’s Next?
Rivian will detail its AI and autonomy plans at its second annual investor technology event on Dec. 9, which TD Cowen analyst Itay Michaeli called “a likely positive catalyst.” Investors will watch the point-to-point rollout, R2 production volumes, and whether the company taps markets for new capital. Progress on the Georgia factory and the plan for autonomous vehicles with Uber by 2028 will also shape the stock.
Affected Tickers and Coins: RIVN, TSLA, UBER
Source: CNBC
