Rivian Automotive, Inc. Q3 FY2025 earnings call

• R2 progress: Teams executing well on R2 development, with design validation builds ongoing, planning to start manufacturing validation builds at year-end. Completed construction of R2 Body Shop, General Assembly Building, Supplier Park, and Logistics Center; paint shop updated to increase annual plant capacity to 215,000 units. R2 is described as delivering on adventure spirit and being a great daily driver.
• Manufacturing expansion: Plan to add 400,000 annual units of capacity for R2, R3, and variants at Georgia facility, with groundbreaking in September 2025 creating jobs and economic benefits.
• Technology investment: Continued investment in hardware, software, and autonomy platform, with Autonomy and AI Day on December 11 to share progress. Growing fleet of customer vehicles will collect data for training large driving model.
• Volkswagen joint venture: Strong relationship with Volkswagen Group, with Volkswagen ID.1 leveraging Rivian technology, and many programs to come from the collaboration.

Automotive segment: During the third quarter, Rivian produced 10,720 vehicles and delivered 13,201 vehicles, generating $1.1 billion in automotive revenue. Automotive gross profit was negative $130 million, impacted by low fixed cost absorption due to shutdowns for R2 preparation, but saw improvement in cost of goods sold per unit delivered. Software and Services segment: Reported $416 million of revenue and $154 million of gross profit. Approximately half of the revenue was from the software and electrical hardware joint venture with Volkswagen Group, and there was strong growth in gross profit from remarketing and vehicle repair/maintenance.

• Reaffirmed 2025 delivery guidance range of 41,500 to 43,500 units.
• Reaffirmed 2025 adjusted EBITDA loss guidance range of $2 billion to $2.25 billion.
• Reaffirmed 2025 capital expenditures guidance of $1.8 billion to $1.9 billion.
• Expect gross profit for the full year of 2025 to be roughly breakeven.

• Near-term uncertainty from trade, tariff, and regulatory policy.
• Uncertainty on potential policy changes affecting regulatory credits, with no meaningful revenues expected from regulatory credit sales in the forecast due to uncertainty.

Q: Curious if you could characterize the demand environment in the U.S. on the back of the removal of the consumer tax credit.

A: Expected pull forward of demand from October into September with the end of the IRA program, resulting in a softer demand environment in October, but bullish on R2 as it addresses the large market opportunity with a cost-effective package.

Q: What are you expecting in terms of demand for regulatory credits?

A: Don't expect meaningful revenues from regulatory credit sales, and forecast is conservative due to policy uncertainty.

Q: COGS per car meaningfully came down, speak more on COGS per vehicle.

A: $96,300 COGS per unit delivered in Q3 despite downtime. Benefit in 2026 from R2's ramp and scaling, leading to positive unit economics by end of 2026.

Q: Talk a bit more about Mind Robotics.

A: Raised $110 million in seed round to launch Mind Robotics as an entity outside Rivian, developing AI-enabled robotics for industrial applications, with applications including Rivian's manufacturing but wider ranging.

Q: Update on Volkswagen relationship.

A: Strong relationship with Volkswagen Group, with Volkswagen ID.1 leveraging Rivian technology, and many programs to come.

Q: Role of Rivian in robotaxi market.

A: Focus on technology, with Autonomy and AI Day to discuss road map, and opportunity to participate in robotaxis but core focus on personally owned vehicles for large-scale adoption of autonomy.

Q: Would you consider offering an EREV for the US market or globally?

A: Not planning to offer EREV or serious hybrid, focused on pure electric architecture for R2 and R3 segments.

Q: Update on tariffs within the results and battery sourcing strategy for R2.

A: Administration's tariff changes are helpful, with impact in Q3 being couple of thousand dollars per vehicle, expected to be a few hundred dollars per unit going forward. R2 launching with 4695 cylindrical cell produced in US from late 2026, sourced from LG in Arizona.

Q: OpEx trajectory on a going-forward basis, especially for autonomy.

A: Philosophy to drive efficiencies to self-fund strategic areas like autonomy training, with elevated R&D spend in lead up to R2 launch, then normalizing as R2 launches.

Q: R2 launch production cadence.

A: Plan to start saleable builds and deliveries in first half of 2026 with limited volumes, ramping up in second half and into 2027 to reach 215,000 run rate.

Q: Capacity building and market saturation.

A: Normal facility has 215,000 units capacity split between R1, commercial van, and R2; Georgia facility will have 400,000 units capacity for R2, R3, and variants, bullish on R2's market appeal.

Q: Entering other markets, especially Europe.

A: R2 and R3 designed for Europe, but timing not announced yet, with 0% export tariff to Europe being a positive factor.

Q: Free cash flow and CapEx in 2026.

A: Expect step-up in Q4 CapEx, working capital to consume cash in Q4 2025, and 2026 working capital to be a use of cash, with more details on 2026 CapEx outlook on Q4 earnings call.

Q: VW investment tranche timing.

A: Don't plan to comment on exact timing, but confident in achieving $1 billion equity investment from Volkswagen Group in 2026.

Q: Pricing and marketing for R2.

A: R2 event in early 2026 to go through full portfolio, launch with dual motor variant, and thoughtful marketing approach to drive awareness.

Q: Impact of dollar weakness and Europe tariffs on Europe rollout.

A: 0% export tariff to Europe is positive, but timing for Europe entry not announced yet.

Q: Time lag between R2 and R3.

A: R3 will be produced only in Georgia facility, launching no sooner than end of 2028 when Georgia facility launches.

Q: Rivian's autonomy vision.

A: Focus on expanding hands-free roads, point-to-point navigation, and growing operational design domain, with Autonomy and AI Day to detail road map.

Q: DOE loan withdrawals.

A: DOE loan is project-based, with vertical construction in Georgia starting in 2026 and first vehicles by end of 2028.

Q: Q4 EBITDA and volumes.

A: Q4 EBITDA expected to improve due to consistent EDV volume, lower cost basis of EDV, and incremental gross profit from software and services, with slight reduction in SG&A spend.