Rivian is having some growing pains, and it really felt them in the third quarter of this year.
On an earnings call Thursday evening, the electric startup announced that production, deliveries and revenue were all down, and a single component is largely to blame. Last month, Bloomberg reported that Rivian was struggling with the ramp-up of its updated 2025 R1S and R1T models thanks to a shortage of a part for its new in-house "Enduro" electric motors. Due to a miscommunication with one supplier, Atlanta-based Essex Furukawa, Rivian was unable to secure enough copper windings to get production to where it needed to be.
That shortage was reflected in last night's financials: revenue of $874 million in Q3, more than 12% lower than what analysts estimated. And down quite a bit from Q2's $1.158 billion in revenue.
"This has been a tough quarter for us because of some of those supply chain or supplier ramp challenges," CEO RJ Scaringe said on the call. "And one of those suppliers in particular has limited our production quite substantially and we're working very, very hard to address that. This is one of our highest priorities in terms of the business.
Rivian delivered 10,018 cars in Q3, down from 13,790 in Q2 and way, way down from 15,564 cars in Q3 of 2023. However, there are still signs of optimism for the nascent automaker. In Q3 of this year, production of the new 2025 "Gen2" cars was actually up to more than 13,000 cars from Q2's 9,600, suggesting that while these results weren't what Rivian wanted, it is ramping things up and getting past this supplier issue. Scaringe said as much on the call: "We're seeing this as really a short-term issue, but it certainly introduced challenges as we saw in Q3," he said.
Perhaps more importantly, Scaringe said that these lessons—revamping the R1 models, bringing more components in-house and getting these problems solved—are being applied to the upcoming Rivian R2. That model is seen as key to Rivian's survival as it's a smaller, more midsize and more affordable electric SUV targeting a starting price around $45,000 before incentives.
"The R2 program is advancing," Scaringe said. "From a timing point of view, it's on track. And the product itself is really exciting. It's delivering a level of performance and capability in a package that really looks and feels like Rivian, but it's doing it at a substantial reduction in terms of its overall cost." Moreover, Rivian's battery partner LG had some exciting news for that car, announcing last night that it will get more advanced and higher capacity battery cells than current vehicles. Scaringe reaffirmed that the target debut for the R2 is still the first half of 2026.
In the meantime, Rivian is hoping that the R1S and R1T can carry it to the point where these new, more mainstream EVs can provide some relief. Soon, Scaringe said, that will come from the debut of the new Tri-Motor models: Rivians with one electric motor upfront and two in the back.
"Performance is better than our first generation [Quad-Motor Rivians], but with a much lower cost in terms of what it takes to manufacture and also with a substantial improvement to efficiency," Scaringe said. "We also expect to see an increase in the R1 average selling price, as we improve our sales mix with more meaningful Tri-Motor sales in Q4."
Perhaps most importantly, Scaringe said the company still expects a "modest" profit in Q4, which would be its first-ever. And Rivian officials reaffirmed that they hope 2025 will provide a "positive gross profit," which would mean it would have to achieve both reliable scale and profitability with the current R1 models. That may be a tough order, especially with still-high interest rates impacting sales of expensive vehicles like the R1T and R1S.
Still, Q3's results were clear: Rivian can pull this off but it has a long way to go. And it literally can't afford mistakes like the one it made with its motor part supplier in the future.
Contact the author: patrick.george@insideevs.com
