Rivian (RIVN) CEO discusses the road to profitability, supply chains, R2 platform, and more
RJ Scaringe, CEO of Rivian (RIVN), sat down with Charlie Coldicott, head of global automotive research at Redburn, to discuss demand, supply chain constraints, the R2 platform, profitability, and more.
Rivian exploded on the scene as one of the most intriguing electric vehicle (EV) makers after going public on the NASDAQ exchange a little over a year ago (November 9, 2021).
Investors rushed in to get their share of the future of the auto industry, pushing Rivian’s market cap well over $100 billion, surpassing both Ford (F) and General Motors (GM). Since then, Rivian has fallen back to reality (as with most unprofitable, growth companies) with a current market cap of around $26 billion.
To make matters worse, RIVN stock is down 72% this year. How has Rivian lost almost a fourth of its value?
To be fair, it’s not all Rivian’s fault. Some of it has to do with events outside the company’s control. Rising interest rates, geopolitical tension, and supply chain bottlenecks have slowed Rivian’s momentum while presenting hurdles for the company’s future.
In spite of this, Rivian is plowing ahead, confident it has what it takes to not only succeed but thrive in the evolving auto industry. In the third quarter, Rivian said it has produced over 15,000 EVs since the start of production while reaffirming its 25,000 goal for 2022.
Although the company is confident, investors are more hesitant, wondering if and when Rivian will turn a profit.
Rivian’s CEO RJ Scaringe sat down at the company’s Redburn’s CEO Conference to discuss the road to profitability, overcoming supply chain hurdles, the upcoming R2 platform, and more.
Demand for Rivian vehicles
Despite concerns over a slowing auto industry, Scaringe says he is confident the company can sell everything it makes with a strong order backlog that stretches into 2024.
Even recently, Scaringe notes, the company is seeing a strong order intake for Rivian vehicles. The company is trying to manage its backlog because too much can deter new buyers. One way of influencing orders is with price changes, which the company did in March.
Scaringe says there’s still room to stretch prices with different options, such as dual or quad motors. He adds Rivian’s unique capabilities continue driving demand.
Establishing its supply chain for the future
As the US and world venture toward 100% EV adoption, Scaringe says the least talked about hurdle is battery materials.
With nearly every automaker transitioning to an all-electric portfolio, demand for critical battery materials is skyrocketing, pushing prices higher. For example, lithium and nickel, two essential minerals for electric vehicles, are up significantly this year.
Establishing a consistent supply, Scaringe says, can take time with multiyear projects that need to come online. For this reason, it’s crucial to lock in capacity now for future production.
To that end, Scaringe says Rivian is building a “portfolio of relationships” for different setups. He adds that the recently passed Inflation Reduction Act supports domestic investments, which will help drive EV growth and ease the transition.
Rivian Profitability
In the most recent quarter, Rivian’s losses widened to $1.7 billion as the EV maker scales production. The company noted in its Q3 shareholder letter:
As we produce vehicles at low volumes on production lines designed for higher volumes, we have and will continue to experience negative gross profit related to labor, depreciation, and overhead costs.
Scaringe says it has been a “challenging year” with Rivian launching four products (two versions of the EV van, the R1T, and the R1S). Launching one vehicle is tough, but launching four is complex.
The company has experienced “unforeseen challenges” as a result, setting production back. To overcome this, Rivian’s CEO says it has first worked to establish the supply chains necessary. And now, it’s focusing on ramping production consistently.
As Rivian mentioned above, it has identified a few of these challenges (capital efficiency) and is now working to address them. For example, the company has added a second production shift to accelerate production.
Although the company is working hard to address these factors, Rivian is not out of the woods yet. The challenges are “well understood,” as Scaringe puts it, but they will still face hurdles while scaling.
Rivian has noted it has sufficient capital until at least 2025. This year, the EV start-up has focused primarily on scaling production. In 2023, Scaringe says, Rivian will work to reduce costs and drive volume, which will steer them toward positive gross margins.
The company is looking at all ways to maximize efficiency and cut costs wherever needed. For example, Rivian reduced its head count earlier this year and has streamlined many processes for its R1 models.
R2 Platform
Rivian plans to launch its next-generation EV architecture, the R2 platform, in 2026. But the company is already getting excited about the opportunity it will bring Rivian and EV buyers.
Scaringe says the R2 platform showcases the best of Rivian’s qualities, such as:
- Capability
- Aerodynamics
- Refinements
- Functionality
Although Rivian is targeting a lower price point, it will “still be very much a Rivian” as the company plans for significant demand. The company plans to implement the same “simplicity” it has learned to use with the R1 series.
The R2 platform is designed to be a much higher volume architecture and will launch in multiple global markets, according to Scaringe.
FTC: We use income earning auto affiliate links. More.
Wind energy powered 20% of all electricity consumed in Europe (19% in the EU) in 2024, and the EU has set a goal to grow this share to 34% by 2030 and more than 50% by 2050.
To stay on track, the EU needs to install 30 GW of new wind farms annually, but it only managed 13 GW in 2024 – 11.4 GW onshore and 1.4 GW offshore. This is what’s holding the EU back from achieving its wind growth goals.
Three big problems holding Europe’s wind power back
Europe’s wind power growth is stalling for three key reasons:
Permitting delays. Many governments haven’t implemented the EU’s new permitting rules, making it harder for projects to move forward.
Grid connection bottlenecks. Over 500 GW(!) of potential wind capacity is stuck in grid connection queues.
Slow electrification. Europe’s economy isn’t electrifying fast enough to drive demand for more renewable energy.
Brussels-based trade association WindEurope CEO Giles Dickson summed it up: “The EU must urgently tackle all three problems. More wind means cheaper power, which means increased competitiveness.”
Permitting: Germany sets the standard
Permitting remains a massive roadblock, despite new EU rules aimed at streamlining the process. In fact, the situation worsened in 2024 in many countries. The bright spot? Germany. By embracing the EU’s permitting rules — with measures like binding deadlines and treating wind energy as a public interest priority — Germany approved a record 15 GW of new onshore wind in 2024. That’s seven times more than five years ago.
If other governments follow Germany’s lead, Europe could unlock the full potential of wind energy and bolster energy security.
Grid connections: a growing crisis
Access to the electricity grid is now the biggest obstacle to deploying wind energy. And it’s not just about long queues — Europe’s grid infrastructure isn’t expanding fast enough to keep up with demand. A glaring example is Germany’s 900-megawatt (MW) Borkum Riffgrund 3 offshore wind farm. The turbines are ready to go, but the grid connection won’t be in place until 2026.
This issue isn’t isolated. Governments need to accelerate grid expansion if they’re serious about meeting renewable energy targets.
Electrification: falling behind
Wind energy’s growth is also tied to how quickly Europe electrifies its economy. Right now, electricity accounts for just 23% of the EU’s total energy consumption. That needs to jump to 61% by 2050 to align with climate goals. However, electrification efforts in key sectors like transportation, heating, and industry are moving too slowly.
European Commission president Ursula von der Leyen has tasked Energy Commissioner Dan Jørgensen with crafting an Electrification Action Plan. That can’t come soon enough.
More wind farms awarded, but challenges persist
On a positive note, governments across Europe awarded a record 37 GW of new wind capacity (29 GW in the EU) in 2024. But without faster permitting, better grid connections, and increased electrification, these awards won’t translate into the clean energy-producing wind farms Europe desperately needs.
Investments and corporate interest
Investments in wind energy totaled €31 billion in 2024, financing 19 GW of new capacity. While onshore wind investments remained strong at €24 billion, offshore wind funding saw a dip. Final investment decisions for offshore projects remain challenging due to slow permitting and grid delays.
Corporate consumers continue to show strong interest in wind energy. Half of all electricity contracted under Power Purchase Agreements (PPAs) in 2024 was wind. Dedicated wind PPAs were 4 GW out of a total of 12 GW of renewable PPAs.
Read more: Renewables could meet almost half of global electricity demand by 2030 – IEA
If you live in an area that has frequent natural disaster events, and are interested in making your home more resilient to power outages, consider going solar and adding a battery storage system. To make sure you find a trusted, reliable solar installer near you that offers competitive pricing, check out EnergySage, a free service that makes it easy for you to go solar. They have hundreds of pre-vetted solar installers competing for your business, ensuring you get high quality solutions and save 20-30% compared to going it alone. Plus, it’s free to use and you won’t get sales calls until you select an installer and share your phone number with them.
Your personalized solar quotes are easy to compare online and you’ll get access to unbiased Energy Advisers to help you every step of the way. Get started here. –trusted affiliate link*
FTC: We use income earning auto affiliate links. More.
In the Electrek Podcast, we discuss the most popular news in the world of sustainable transport and energy. In this week’s episode, we discuss the official unveiling of the new Tesla Model Y, Mazda 6e, Aptera solar car production-intent, and more.
The show is live every Friday at 4 p.m. ET on Electrek’s YouTube channel.
As a reminder, we’ll have an accompanying post, like this one, on the site with an embedded link to the live stream. Head to the YouTube channel to get your questions and comments in.
After the show ends at around 5 p.m. ET, the video will be archived on YouTube and the audio on all your favorite podcast apps:
We now have a Patreon if you want to help us avoid more ads and invest more in our content. We have some awesome gifts for our Patreons and more coming.
Here are a few of the articles that we will discuss during the podcast:
Here’s the live stream for today’s episode starting at 4:00 p.m. ET (or the video after 5 p.m. ET):
FTC: We use income earning auto affiliate links. More.
The Chinese EV leader is launching a new flagship electric sedan. BYD’s new Han L EV leaked in China on Friday, revealing a potential Tesla Model S Plaid challenger.
What we know about the BYD Han L EV so far
We knew it was coming soon after BYD teased the Han L on social media a few days ago. Now, we are learning more about what to expect.
BYD’s new electric sedan appeared in China’s latest Ministry of Industry and Information Tech (MIIT) filing, a catalog of new vehicles that will soon be sold.
The filing revealed four versions, including two EV and two PHEV models. The Han L EV will be available in single- and dual-motor configurations. With a peak power of 580 kW (777 hp), the single-motor model packs more power than expected.
BYD’s dual-motor Han L gains an additional 230 kW (308 hp) front-mounted motor. As CnEVPost pointed out, the vehicle’s back has a “2.7S” badge, which suggests a 0 to 100 km/h (0 to 62 mph) sprint time of just 2.7 seconds.
To put that into perspective, the Tesla Model S Plaid can accelerate from 0 to 100 km in 2.1 seconds. In China, the Model S Plaid starts at RBM 814,900, or over $110,000. Speaking of Tesla, the EV leader just unveiled its highly anticipated Model Y “Juniper” refresh in China on Thursday. It starts at RMB 263,500 ($36,000).
BYD already sells the Han EV in China, starting at around RMB 200,000. However, the single front motor, with a peak power of 180 kW, is much less potent than the “L” model. The Han EV can accelerate from 0 to 100 km/h in 7.9 seconds.
At 5,050 mm long, 1,960 mm wide, and 1,505 mm tall with a wheelbase of 2,970 mm, BYD’s new Han L is roughly the size of the Model Y (4,970 mm long, 1,964 mm wide, 1,445 mm tall, wheelbase of 2,960 mm).
Other than that it will use a lithium iron phosphate (LFP) pack from BYD’s FinDreams unit, no other battery specs were revealed. Check back soon for the full rundown.
Source: CnEVPost, China MIIT
FTC: We use income earning auto affiliate links. More.
-
Sports2 years ago‘Storybook stuff’: Inside the night Bryce Harper sent the Phillies to the World Series
-
Sports9 months agoStory injured on diving stop, exits Red Sox game
-
Sports1 year agoGame 1 of WS least-watched in recorded history
-
Sports2 years agoMLB Rank 2023: Ranking baseball’s top 100 players
-
Sports3 years ago
Team Europe easily wins 4th straight Laver Cup
-
Environment2 years agoJapan and South Korea have a lot at stake in a free and open South China Sea
-
Environment2 years agoGame-changing Lectric XPedition launched as affordable electric cargo bike
-
Business2 years agoBank of England’s extraordinary response to government policy is almost unthinkable | Ed Conway