Rivian (NYSE: RIVN) reported its Q2 2023 earnings yesterday beating on each the topline in addition to the bottomline and in addition raised its 2023 manufacturing steering. Listed here are the important thing takeaways.
RIVN reported revenues of $1.12 billion which was forward of the $1 billion that analysts anticipated. Its gross margins had been detrimental 37% within the quarter as in comparison with detrimental 81% within the corresponding quarter final yr.
In Q2, Rivian produced 13,992 automobiles and delivered 12,640 of these. The deliveries had been effectively forward of the 11,000 that analysts had been anticipating.
Rivian posted better-than-expected Q2 earnings
The corporate’s gross loss narrowed from $704 million in Q2 2022 to $412 million in Q2 2023. It additionally earned $34 million from the gross sales of the sale of regulatory credit and stated that it expects them to extend sooner or later whilst they might range between quarters.
It additionally elevated its 2023 manufacturing steering and its CFO Claire McDonough stated, “Based mostly on the progress of our manufacturing ramp, together with the ramp of our in-house motor, together with the newest understanding of the provision chain, we’re rising our manufacturing steering to 52,000 whole models.” Beforehand it forecast a manufacturing of fifty,000 models.
The corporate lowered its projection for 2023 EBITDA loss to $4.2 billion. It additionally lower the capex steering to $1.7 billion – which is extra of a timing problem. It reiterated that its common capex in 2023 and 2024 could be within the low $2 billion space.
RIVN reiterated its long-term targets
McDonough nevertheless reiterated “We see a transparent path to our roughly 25% gross margin goal, excessive teenagers adjusted EBITDA margin goal and roughly 10% free money stream margin goal.”
In the course of the earnings name, the corporate stated that in the course of the second quarter, R1S automobiles accounted for 70% of the manufacturing of its R1 sequence automobiles whereas including that they’re extra worthwhile than the R1T automobiles.
Rivian ended the quarter with a cushty money pile of $10.2 billion which might fund its operations till 2025. The corporate’s CEO RJ Scaringe stated, “We can be very considerate and intentional on how we safe further capital to help the expansion of the R2 program.”
Rivian considerably improved its car margins
It added that in the course of the second quarter, it built-in the Enduro motors into the Enduro motor variant of the R1 platform. Scaringe stated that it’s an “necessary milestone from a price perspective and also will be instrumental in increasing the patron market alternative for our R1 automobiles. We imagine the vast majority of our long-term R1 demand will come from our Enduro motor variants.”
He added that the gross margin per car improved by round $35,000 and pressured “We achieved significant reductions in each R1 and EDV car unit prices throughout the important thing parts, together with materials prices, manufacturing labor, overhead and logistics.”
Rivian to start EDV deliveries to Europe this yr
Scaringe additionally supplied insights into the electrical supply automobiles (EDVs) and stated that the corporate’s EDVs are in operation in 800 cities within the US and it has additionally began delivering these to Amazon in Europe.
Notably, Amazon is Rivian’s greatest investor and has additionally positioned an order for 100,000 electrical supply automobiles with the corporate.
In response to an analyst query on the exclusivity clause on EDVs with Amazon, Scaringe stated, that the corporate is working “carefully with Amazon to increase what number of of these automobiles are getting out, and naturally, that ties to how quickly we ramp the manufacturing of the EDV product.”
He reiterated his earlier feedback that RIVN “is actively working with Amazon to permit us to promote automobiles outdoors of Amazon before what was initially contemplated in our contract.”
RIVN talked about its software program capabilities
In the course of the earnings name, Rivian additionally talked about its software program capabilities and stated, “We imagine that our software program capabilities, our structural differentiator that may solely develop in significance as electrical automobiles proceed to extend in complexity. Our distinctive capabilities stem from the intentional selections we made years in the past after we determined to actually take a clear sheet method to the software program stack and electrical {hardware} within the car.”
Notably, Tesla’s CEO Elon Musk believes that many of the firm’s valuation comes from its autonomous enterprise. The corporate has missed a number of deadlines to show totally autonomous however Musk pressured in the course of the Q2 earnings name that the corporate’s self-driving system would attain L4 or totally autonomous this yr.
RIVN R2 to be launched in 2026
Rivian is concentrating on a complete annual manufacturing capability of round 600,000 automobiles between its Regular and Georgia crops. It aspires to seize 10% of the worldwide automotive market share which could appear a tall ask contemplating the large competitors.
On the upcoming manufacturing facility in Georgia, Rivian would produce the reasonably priced R2 the place manufacturing is slated to start in 2026 – one yr behind the unique schedule.
RIVN versus Lucid Motors
Lucid Motors (NYSE: LCID) which launched its Q2 earnings a day earlier than Rivian missed income estimates on the again of decrease deliveries. The corporate’s web loss additionally widened to $764.2 million as in comparison with $555.3 million within the corresponding quarter final yr.
Lucid Motors maintained its 2023 manufacturing steering and nonetheless expects to provide over 10,000 automobiles within the yr. It added that deliveries would rise step by step in the course of the yr and it expects the fourth quarter to be its largest.
The corporate has a complete liquidity of $6.25 billion after the $3 billion fairness increase and expects the money to fund its operations till 2025.
In the meantime, whilst LCID inventory rose over 12% yesterday, RIVN is sort of flat in US put up markets regardless of comfortably beating analysts’ estimates and elevating its steering.
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