Key Takeaways
- Rivian’s R2 won SUV of the Year from both TopGear.com and MotorTrend this month, right after a record quarter of 19,248 deliveries.
- Third quarter revenue rose 38% to $2.155 billion, beating the Bloomberg consensus, and Rivian raised its full-year guidance on every metric.
- Software and services, led by Volkswagen’s joint venture, produced all of the gross profit while the automotive segment lost $80 million.
- Autonomy and AI Day on December 9 comes first, and then the fourth quarter needs at least 25,193 deliveries to reach guidance.
Rivian Automotive (RIVN) just had a very good week for its newest SUV. TopGear.com named the R2 its SUV of the Year on November 6, and MotorTrend gave it the same title on November 11.
The awards land right after a record quarter. Rivian delivered 19,248 vehicles in the third quarter, more than five times the 3,806 that Lucid Group (LCID) delivered.
Two partners are also helping fund the ramp. Volkswagen (VOW3) provided a $1 billion term loan in October, while Uber (UBER) invested $300 million in May.
Still, trophies don’t fix margins. The car business lost more money at the gross level than it did in the second quarter, and cash burn rose.
Awards stack up behind a record quarter
Founder and CEO RJ Scaringe called the MotorTrend win “a full-circle moment,” since it came just months after the first R2 deliveries. The R1T won the magazine’s 2022 Truck of the Year, so Rivian now holds two of its titles.
The quarter behind the headlines was strong:
- Revenue rose 38% to $2.155 billion, ahead of the $2.02 billion Bloomberg consensus.
- Adjusted loss per share narrowed to $0.48, against $0.61 expected.
- Deliveries climbed 46%, and the R2 outsold both the R1 and the commercial van.
Rivian also lifted its full-year delivery range to 67,000 to 70,000 vehicles. It improved adjusted EBITDA guidance by $100 million at the midpoint and cut capex guidance by $300 million.
Here’s how the two halves of the business split that revenue…
Software and services brought in $605 million, up 45%. Volkswagen’s joint venture supplied $354 million of it.
Volkswagen is carrying the gross line
Consolidated gross profit reached $176 million, up from $24 million a year earlier. That looks like progress, and partly it is.
However, software and services produced $256 million of gross profit at a 42% margin. The automotive segment lost $80 million, compared with a $36 million loss in the second quarter.
So the overall gross margin slipped after climbing for most of the past year.
It fell to 8% from 11% in the second quarter. Rivian booked about $120 million of extra R2 ramp costs, while $81 million of regulatory credits and a tariff refund softened the hit.
Those credits won’t repeat on demand. In practice, Volkswagen is now funding most of Rivian’s gross profit, which is an odd spot for a carmaker.
Lucid shows why scale still matters, though. Its third quarter revenue grew just 4% to $350 million, so Rivian keeps pulling away from its closest pure EV peer.
TIKR tracks 25 analysts on Rivian. How many say “Buy”?
See the full breakdown of Buy, Hold, and Sell ratings on Rivian, along with Wall Street’s revenue and earnings estimates, all in one place. More than 500,000 investors use TIKR to research stocks like this one. See Rivian’s Analyst Ratings
Cash burn decides the timeline
Is there enough cash to finish the job?
Free cash flow worsened to negative $1.12 billion, from negative $421 million a year earlier. Rivian blamed lower deferred revenue and inventory built for the R2 launch.
The company ended September with $5.5 billion in cash and investments. Adding the Volkswagen loan, available liquidity reaches about $7.1 billion.
That cushion came at a price, because shares outstanding rose about 18% since December to 1.46 billion. A July stock sale and new shares issued to Volkswagen and Uber drove the increase.
My take: The R2 looks like a genuine hit, and the awards confirm what the delivery numbers already showed. But I’d wait for the automotive gross loss to shrink before calling this a turnaround, since Volkswagen’s checks are doing too much of the work. Scaringe says Rivian is “laying the foundations” for an autonomous, AI-defined future, and that pitch gets tested soon.
The next checkpoint is Autonomy and AI Day on December 9. After that, the fourth quarter needs at least 25,193 deliveries to reach the low end of guidance, which would be another record.
So what is Rivian stock actually worth?
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