Rivian Automotive, Inc. / DE Q4 FY2024 earnings call

• Positive gross margin in Q4 2024 due to cost reduction, increased revenue, higher average selling prices, regulatory credit revenue, and joint venture with Volkswagen Group.
• Tri-Motor launch with higher take rate, described as the 'Goldilocks' of powertrain configurations, delivering 0-60 in 2.9 seconds.
• Progress on R2, with 95% of bill of materials sourced, expected to have a significantly lower cost structure than R1, with launch planned for first half of 2026.
• Rivian Autonomy Platform with 55 megapixels of cameras, five radars, and 10 times the compute of Gen 1, using end-to-end AI approach for self-driving capabilities.
• Joint venture with Volkswagen Group, with vehicle electrical architecture and software development services reflected in revenue and cost of goods sold, and Rivian expecting $2 billion of consideration over four years.

The automotive segment includes the sale of new consumer and commercial vehicles, as well as regulatory credits. In Q4 2024, the automotive segment produced 12,727 vehicles and delivered 14,183 vehicles, generating $1.5 billion in revenue. The segment-level automotive gross profit was $110 million, reflecting a 7% gross margin. The software and services segment includes remarketing, vehicle repair and maintenance services, charging, software subscriptions, and other services. It generated $214 million in revenue in Q4 2024, with a segment-level gross profit of $60 million, reflecting a 28% gross margin. The financial results of the Rivian and Volkswagen Group joint venture are consolidated into Rivian's financials, with Rivian expecting to recognize approximately $2 billion of consideration from Volkswagen Group as revenue over the next four years.

• 2025 deliveries expected to be between 46,000 and 51,000 vehicles. Q1 2025 deliveries anticipated to be approximately 8,000 vehicles, production ~14,000 vehicles. Shutdown of consumer and commercial manufacturing lines in Normal plant for ~1 month in second half of 2025 to prepare for R2 launch in first half of 2026.
• Modest gross profit expected for full year 2025, supported by software and services segment, with adjusted EBITDA loss expected to be between $1.7 and $1.9 billion. Capital expenditures in 2025 range from $1.6 billion to $1.7 billion.
• 2026: Excited to launch R2 in first half of the year, intending to gradually ramp the R2 line with single shift production for majority of operations.

• External factors outside of control, such as changes to regulations or policies which may impact market dynamics, supply chains, incentives, and the market for regulatory credits. These could impact the company's outlook.

Q: Could you outline what exactly you are assuming on tariffs, credits, et cetera?

A: Our outlook reflects our current view on potential adjustments, including incentives, regulations, tariff structures, but specific details on each driver are not provided. Our guidance reflects hundreds of millions of dollars of impact to Rivian's EBITDA, inclusive of potential demand impacts.

Q: Can you tell us how much you're spending on the compute and training for the Rivian autonomy platform? What are you doing in-house? How much are you doing with partners?

A: We've invested in the Gen 2 platform with an AI-centric approach. We access GPUs through various creative ways without deploying CapEx ourselves, working on deal structures to access substantial GPUs for training. There's confusion around GPU access, but we're working on ways to access training horsepower.

Q: Can you confirm whether regulatory credit revenue is similar or higher or lower in 2025?

A: We still expect roughly about $300 million of reg credits in 2025, with outcomes potentially higher or lower due to policy impacts, but relatively flat year-over-year from a regulatory credit standpoint.

Q: What's your view about your ability to monetize autonomy features?

A: We believe autonomy features will create economic value, whether embedded in vehicle pricing or as check-the-box features. We've invested heavily and see nonlinear progress with a vertically integrated stack, creating economic value for the business.

Q: How should we expect the quarterly cadence around deliveries in 2025 to progress?

A: We're shutting down the Normal plant for ~1 month to integrate R2 line, production volumes reflect this shutdown, with sufficient suppliers and inventory to support full year.