Rivian Automotive reported a worse-than-expected loss in the first-quarter late Tuesday as the company lost more than $38,000 per vehicle. Meanwhile, speculation ran rampant Tuesday that Apple was looking to partner with the EV startup. Rivian stock sank early but gained ground Wednesday.
Rivian announced a loss of $1.24 per share in the first quarter, down from a $1.25 loss a year ago, while revenue increased more than 80% to $1.204 billion. Analysts predicted a loss of $1.15 per share in Q1 with sales totaling $1.17 billion.
Meanwhile, Rivian ended Q1 with $7.858 billion in cash, cash equivalents, and short-term investments. Rivian ended Q4 with around $9 billion in cash.
Rivian also lost $38,784 per vehicle delivered in Q1. The EV startup said Tuesday it "expects significant improvement in the material and conversion cost of its vehicles and remains confident in its path to achieving modest gross profit in the fourth quarter of this year."
"First-quarter results exceeded our outlook and set a strong foundation for the remainder of the year as we focus on continued demand generation, delivering cost and plant efficiency improvements, advancing R2 development, and driving towards profitability," Chief Executive RJ Scaringe said Tuesday in the earnings release.
RIVN shares dropped 9% early but pared losses, edging up 0.2% to 10.27 during market action on Wednesday. The stock hit a record low last month.
Rivian And Apple?
Ahead of earnings, Rivian stock surged early Tuesday after Taiwan-based Digitimes reported Apple could be exploring a partnership with Rivian, citing supply chain sources. Apple canceled its long-running "Project Titan" Apple Car in late February.
Scaringe said on the Q1 earnings call Tuesday that Rivian wouldn't "comment on market rumors or speculation." However, he added that Rivian has a "history of partnership," as Scaringe pointed to the investment from Amazon.com.
"As we think about what we've built as a company, one of the core elements that makes this unique is just the level of vertical integration around our software and associated electronics platforms," Scaringe said on the earnings call.
Following Rivian's new product line unveiling in March, Adam Jonas, Morgan Stanley's high-profile autos analyst, wrote that his "key question" is whether Rivian should "seek out a new strategic 'sponsor' before launching the 'heavy lift' phase of development or do they continue to 'go-it-alone' and potentially look for partners later phase."
It is Jonas' view that Rivian may benefit from a partnership to bring its new vehicles to market at scale.
The Irvine, Calif.-based company had a market cap of just $10.1 billion as of Monday's close.
Rivian Stock: Executive Change And Q1 Deliveries
On Friday, Rivian announced it had hired Javier Varela as its new chief operations officer. Varela joins Rivian from Volvo where he served as chief operations officer and deputy chief executive officer.
Meanwhile, A week ago, Rivian received $827 million from the state of Illinois to expand its Normal, Illinois plant.
In early April Rivian announced vehicle deliveries in Q1 totaled 13,588 while it produced 13,980. For 2024, Rivian also reaffirmed previous guidance of producing 57,000 vehicles.
Ahead of the release, analysts expected the company to deliver 13,000 units. On Feb. 21, Rivian predicted that 2024 production would remain flat compared with 2023 while consumer and commercial vehicle deliveries will grow by low single digits in 2024.
The carmaker also forecast that vehicle deliveries in fiscal Q1 2024 would be about 10%-15% lower than in Q4 2023, which totaled 13,972. However, Rivian's Q1 deliveries declined only 3%.
Rivian's New Product Line And Funding
The EV startup unveiled the R2 — its smaller, cheaper, next-generation vehicle and platform — on March 7. The vehicle has an estimated starting price of $45,000 with expectations it will also qualify for the $7,500 Inflation Reduction Act (IRA) tax credit.
Rivian planned to produce the vehicle at its new factory in Georgia. However, the company halted construction of its $5 billion factory and is opening an R2 production line at its Illinois plant.
Production of the R2 platform is expected to begin in 2026 with deliveries set for the first half of 2026.
Rivian also announced the R3, a more compact crossover style vehicle that uses the R2 platform, and a high-performance R3X offering. The company has not mentioned pricing or delivery estimates for the R3 or R3X.
Rivian has said the R3 will be at a lower price point than the R2 and that deliveries for the R3X will begin after the R2.
Within 24 hours after the launch, Rivian said it received more than 68,000 reservations for the R2.
Rivian's Cash Question
Rivian announced on Feb. 21 a loss of $1.36 per share in Q4 with sales doubling to $1.31 billion. Analysts expected a loss of $1.35 and revenue totaling $1.28 billion. At the time, the carmaker also said it was laying off 10% of its salaried workers.
Tesla Chief Executive Elon Musk posted on X, formerly Twitter, late on Feb. 21 that based on Rivian's quarterly cash on hand, the company could go bankrupt in around six quarters.
Chief Financial Officer Claire McDonough told investors on the Q4 earnings call that Rivian remains "confident that our cash, cash equivalents and short-term investments can fund our operations through 2025."
"We aim to maintain a strong balance sheet position by continuing to drive cost efficiencies and improve our vehicle unit economics, while opportunistically evaluating a variety of capital markets available to Rivian ranging across the capital structure," McDonough said.
Rivian stock ranks ninth in IBD's Automakers industry group. RIVN has a weak 17 Composite Rating out of 99. Additionally, the stock has a 7 Relative Strength Rating and its EPS Rating is 40 out of 99.
Please follow Kit Norton on X, formerly known as Twitter, @KitNorton for more coverage.
YOU MAY ALSO LIKE:
Is Tesla Stock A Buy Or A Sell?
Get Full Access To IBD Stock Lists And Ratings
Learning How To Pick Great Stocks? Read Investor's Corner
Is Rivian A Buy Right Now After It Launched Its New Product Line?
