Rivian Automotive Inc (NASDAQ:RIVN) on Tuesday reported second-quarter results. Amazon.com Inc (NASDAQ:AMZN) powered electric vehicle maker posted a smaller-than-expected loss as production guidance was lifted. Shares of Rivian initially rose nearly 3% after the report, but its stock has gained 80% in the past 90 days as it continues to enjoy growing demand for its electric cars and SUVs despite the higher cost of borrowing. While its EV rivals are burning cash to ramp up production and follow EV king Tesla Inc (NASDAQ:TSLA) in cutting prices to boost demand, Rivian appears to be on a solid footing.
Key Q2 numbers
For the quarter ended June 30, Rivian generated $1.12 billion in revenue from the R1T sedan, R1S SUV and electric delivery vans it makes for Amazon, with the sale of zero-emissions regulatory credits, making about $34 million of those sales. However, Rivian topped Refinitiv’s consensus estimate of $1 billion and made a significant improvement over the comparable quarter of 2022 when it generated just $364 million in revenue. Unfortunately, it still had a net loss of $1.19 billion, but it still improved from the same quarter in 2022 when it lost $1.7 billion. When adjusted, Rivian is operating at a loss of $881 million, or $1.08 per share, better than the $1.41 a Refinitiv poll of analysts forecast. The total loss was $412 million, which is a significant improvement over the similar quarter of 2022 when negative profit totaled $704 million. Compared to the first quarter, that’s an improvement of about $35,000 per EV. The adjusted loss was $31,595 per EV sold, a significant improvement over the first quarter of $67,329. While still negative, gross margin improved to negative 37% from negative 81% in the first quarter. Rivian also cut research and development costs by about 18% year-over-year, to $444 million. It also cut its capital expenditures from $359 (similar quarter of 2022) to $255 million, as it needed equipment for the first stages of production during the same quarter last year. As of June 30, the cash balance is $10.2 billion.
12,640 electric vehicles were delivered, which is 59% higher than in the first quarter, and vastly exceeds the 4,467 electric vehicles in the corresponding quarter of 2022.
During the cited quarter, the Amazon-powered EV maker produced 13,992 EVs, increasing its production from 9,395 EVs in the first quarter and more than doubling its 2022 comparative quarterly production of 4,401 EVs.
Lift guidance 2023
The Amazon-backed EV company was guided by a 2023 production of 52,000 EVs, which is double its 2022 production and higher than its previous production forecast which was guided by 50,000 EVs. Rivian reiterated that it expects to post a positive gross profit sometime next year. It guided $1.7 billion in capital expenditures for the full year, and lowered its previous guidance of $2 billion.
RJ Scaringe checks on liquidity and position
Rivian’s CEO concluded that the better-than-expected results reflect the company’s focus on achieving profitability through economies of scale, cost reductions and improved efficiency. During the quarter, the Amazon-powered electric vehicle maker achieved significant R1 and EDV unit cost reductions across key components. Scaringe also reassured investors that liquidity is covered through 2025. With the latest results, it looks like Rivian may have solved its biggest money drain issue. Moreover, with its upcoming lineup of smaller and cheaper EVs, Rivian’s EV sales seem poised to continue increasing and with access to Tesla superchargers, it appears to be better positioned than others for the EV race. There’s also the fact that Rivian has already managed to beat Tesla by resurrecting the world’s first electric pickup, the R1T, while the Tesla Cybertruck is expected to hit the road later this year after numerous delays.
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