California-based Rivian, the maker of the R1S SUV, R1T pickup, and Amazon Electric Delivery Van (EDV), has raised the production guidance for this year after generating almost 70 percent more revenue in Q2 compared to Q1, according to the official letter sent to shareholders yesterday.
Rivian now aims to produce 52,000 vehicles in 2023, 2,000 more than previously estimated, spurred by the 50 percent gross margin improvement and roughly 50 percent increase in production in the second quarter compared to Q1.
Specifically, the startup’s gross profit per vehicle delivered improved by $35,000, helped by the company-wide cost reductions that include the in-house manufacturing of the Enduro electric drive units, the adoption of LFP battery packs, and the negotiated supplier price reductions.
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However, it’s worth noting that Rivian still loses money on every car it makes at the moment, with ($32,595) negative gross profit per unit delivered in Q2, compared to ($67,329) in the first quarter and ($124,162) in Q4 2022.
As a business unit, the California-based firm posted a net loss of $1.19 billion, down from $1.45 billion in the previous quarter and $1.71 billion in Q2 2022.
“We remain confident in our ability to continue to drive our cost per vehicle lower by ramping production and leveraging our fixed costs, as well as our commercial, engineering design changes, and operational cost reduction efforts,” the company said in the letter.
Furthermore, the EV manufacturer generated $1.12 billion in revenue in the previous quarter, up from $661 million in Q1, mostly thanks to the 50 percent increase in production and a 60 percent increase in deliveries compared to Q1. In the last quarter, Rivian manufactured 13,992 vehicles and delivered 12,640 units, shattering analysts’ predictions that said deliveries would top out at around 11,000 units in Q2.
According to the startup, roughly 70 percent of total R1 production was the R1S SUV, making it the first-ever quarter in which the SUV overtook the R1T pickup.
“Our second quarter results reflect our continued focus on cost efficiency as we accelerate the drive towards profitability,” said Rivian founder and CEO RJ Scaringe. “On a quarter-over-quarter basis, delivered vehicles grew around 60% while gross profit per vehicle improved by about $35,000. We have achieved meaningful reductions in both R1 and EDV vehicle unit cost across the key components, including material costs, overhead, and logistics. It was a strong quarter, and we remain focused on ramping production, driving cost efficiencies, developing future technologies, and enhancing the customer experience.”
The company, which assembles its vehicles in Normal, Illinois, ended the quarter with $10.2 million in cash, cash equivalents, and short-term investments, while the total liquidity was $11.3 million when including the capacity under its asset-based revolving credit facility.
