Rivian Q3 earnings preview: Deliveries are up, but will losses continue to improve?

EV maker Rivian is reporting what’s expected to be a big Q3 earnings report on Tuesday after the market close. The report comes as Rivian has continued to improve its per-vehicle losses as it ramps production.

Deliveries continue growing in the third quarter

Rivian crushed expectations, delivering 15,564 vehicles in the third quarter, up 24% from Q2 and more than doubling last year’s figures. The EV maker built 16,304 EVs in Q3, 17% more than the previous quarter.

As Rivian better leverages its Normal, Illinois facility, the cost to build each vehicle has fallen significantly.

Rivian lost $32,595 on each vehicle made in the second quarter. Although this is still a high number, it’s down over 50% from the first quarter’s loss of $67,329.

The improvements are even more drastic compared to last year’s $139,277 loss per vehicle in Q3.

Investors will watch this number closely on Tuesday as Rivian reports its Q3 earnings. Scaringe previously said he expects Rivian to reach break-even on each EV built by next year.

Profitability comes into focus

Reaffirming this target, Rivian’s CEO RJ Scaringe told CNBC the company is seeing significant progress quarter-over-quarter.

Scaringe said, “What we’re going to see is a very clear staircase or set of steps that get us to profitability as a business.”

Although scaling production has improved vehicle margins, Rivian has also introduced other cost-cutting measures. The EV maker confirmed it’s on track to reach its goal of building 52,000 vehicles this year.

Scaringe also mentioned that he does not see customer overlap with Tesla’s Cybertruck and the Rivian R1T.

Rivian has been among the few EV makers to avoid drastic price cuts. Market leader Tesla has slashed prices all year to boost demand. Tesla’s prices are down about 25% YOY.

Rivian Q3 earnings financial preview

Investors got a scare after Rivian revealed plans to issue $1.5 billion in convertible debt last month. The news came days after Scaringe said the company was “very comfortable” with the company’s “strong balance sheet.”

Scaringe eased investors’ minds, telling Reuters that the offering was designed to free up funds as it enters a new growth phase. It’s intended to create an additional buffer rather than reflect cash concerns, according to Scaringe.

Rivian had around $9.2 billion in cash at the end of June. The EV maker’s preliminary Q3 earnings suggest between $1.29 billion and $1.33 billion in revenue, aligning with Wall St estimates of $1.3 billion.

The EV maker posted a net loss of $1.12 billion in Q2, compared to $1.7 billion last year and $1.4 billion in Q1.

After the progress, Rivian improved its adjusted EBITDA guidance to ($4.2 billion) while lowering CapEx to $1.7 billion.

Rivian’s stock is down 45% over the past 12 months despite a hot streak following strong Q2 results.

Electrek’s Take

Several automakers, including Ford and GM, recently delayed EV targets, with widening losses on electric models.

However, others, including Hyundai and Kia, expect the momentum to continue with electric cars. Can Rivian keep the growth up? We will see Tuesday after the market closes. Check back for final details.