Electric vehicle startup Rivian reported a net loss of $1.46 billion in the second quarter of 2024. This is a 21% increase from the $1.2 billion loss recorded in the same period last year. It also means the company is losing roughly $33K on every vehicle sold.
Shares of the company (RIVN.O) have been falling since these numbers were shared.
This loss comes despite the company reporting higher vehicle sales and cost-cutting measures during the quarter.
Rivian’s revenue for the second quarter reached $1.16 billion, a 3.3% increase compared to the $1.12 billion it generated in the same period in 2023. However, the company’s net losses continued to mount, reflecting the significant investments and factory overhaul required to ramp up production.
In a bid to achieve profitability, Rivian reiterated its objective to reach a modest gross profit in the fourth quarter of 2024, as well as its previously announced targets. CEO RJ Scaringe attributed the higher losses in the second quarter to a mix of mostly 2024 model year vehicles and some refreshed 2025 models, which have a lower cost structure.
“The flurry of incentives offered on R1 vehicles in the second quarter does not represent a long-term shift in pricing,” Scaringe explained during the company’s earnings call. “Instead, they were used to clear out inventory in preparation for the refreshed 2025 models.”
Rivian ended the quarter with $5.8 billion in cash and cash equivalents, down from $7.9 billion at the end of 2023, reflecting the high cash burn rate that has concerned investors since the company began production in late 2021.
Despite the challenges, they remain confident in its path to profitability. Rivian’s recent partnership with Volkswagen to incorporate its electrical architecture into future Volkswagen Group EVs has bolstered investor confidence.
Rivian reiterated its guidance to build 57,000 vehicles in 2024, with a slight dip in deliveries over the next quarter as the company works to rebuild inventories following a plant shutdown in April.
Analysts say that Rivian’s profitability will ultimately depend on the successful launch of its more affordable R2 vehicles, which are expected to enter production in early 2026.
