Like with most electric carmakers, Rivian is about to experience a 2025 with rough and unsettling forces shaping its business. Last year, the carmaker inked a $5.8 billion deal with Volkswagen, and Rivian’s electrical architecture and software will be integrated into vehicles across the Volkswagen Group umbrella. That should give Rivian some cushion, because they currently need demand that’s beyond just their cars. That’s because Rivian lost $39,000 on every R1S SUV and R1T pickup they sold through the first three quarters of sales last year, and they sold relatively few in total, just shy of 52,000.
Rivian Achieves Cost-Cutting Success
But on its earnings call today and in a statement ahead of time, Rivian showed that they’ve turned a significant corner, achieving $170 million positive gross profit in the fourth quarter of 2024. Crucially, while $110 million was from car sales, in part thanks to an uptick in selling R1 and R2 vehicles with Tri-motor systems (an R1T Tri will set you back about $100,000), Rivian also made $60 million from selling software. Plus, their revenue jumped by $419 million year-over-year, in part because Rivian sells tax credits to carmakers “in the red” for having less efficient fleets.
On its earnings call today, Rivian CEO RJ Scaringe said that the biggest difference in Rivian’s business at the end of 2023 vs. the end of last year “is the cost reduction” per vehicle. Scaringe said Rivian has cut $31,000 in automotive costs per vehicle delivered in Q4 2024 relative to Q4 2023. “This was a really important milestone for us,” Scaringe said. Further, he said that R2’s material costs “are significantly less than half of R1.”
Rivian said in the past that it would begin production of its new, smaller and more affordable R2 as a 2026 model, and that that smaller crossover would sell for $45,000. That would make it roughly competitive with Kia, Hyundai, Subaru, Toyota, Chevy and Ford, all of which sell EVs in about that price slot — though notably, both GM and Volkswagen, not to mention Tesla, can undercut that by a little or by several thousand dollars. Rivian’s R3, which is supposed to be even cheaper both at retail and for Rivian to make, is set to debut in about 18 months.
A $6 Billion Loan Hangs In The Balance
But that future very much depends on the creation of a new factory in Georgia. To build that, Rivian received a $6 billion loan from Biden’s Department of Energy.
Georgia Governor Brian Kemp, who made attracting Rivian to the Peach State a signature of his economic plan during his first term, told Atlanta TV station WSB that he wasn’t sure if the Trump White House would cancel the deal — despite Georgians voting for Trump in 2024. A beneficiary of cutting that cash lifeline for Rivian would obviously be Elon Musk’s Tesla, which is currently suffering a sales backlash, especially in Europe.
During the earnings call, Scaringe seemed to go slightly out of his way to tout Rivian as a job creator. “I want to say we’re very aligned with the administration in the importance of creating U.S. jobs and driving technology innovation here in the United States and in an area that we think is critically important for our country in the long term.”
TopSpeed’s Take
The financial website, Motley Fool, thinks that Rivian may have an ace up its sleeve. Recently, Rivian began to allow any company, tiny or huge, to purchase one of its RCVs (Rivian Commercial Van). Most people don’t know these as Rivian products — they see one and think that Amazon made them. The “Amazon” vans aren’t made by that titan of same-day delivery, but by Rivian —though Amazon owns a 16-percent stake in Rivian. Selling its vans to any buyer for last-mile delivery — or to a local HVAC outfit — makes a lot of sense. The vans are pretty massive inside, offered in both 487 and 652 cubic feet configurations. Which is larger than a lot of city dweller’s apartments. And with 160 miles of range, that’s reasonable for daily use. The $79,900 sticker stacks up well against Sprinters and Ford’s E-Transit vans.
Meanwhile, provided the Georgia plant comes online in 2026 — with or without federal dollars — it’s expected to significantly increase Rivian’s volume, adding 400,000 additional cars. Rivian’s in the same race that Tesla was in during its fledgling state. Rivian needs volume, because that provides cash flow, which in turn enables reinvestment without needing to raise outside money from investment. It helps that they have other revenue streams, but relying on, say, selling carbon credits isn’t as reliable as selling hardware, like cars, and technological innovation it can license to Volkswagen and possibly other brands.
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