A Roadhouse Revival or a Flash in the Pan?
My dears, there’s nothing quite like watching a young automaker fumble its way toward profitability, like a debutante at her first ball—hopeful, over-accessorized, and one misstep away from catastrophe. Yet, Rivian, that cheeky upstart of the EV circuit, appears to be gaining its footing. For the second quarter in a row, they’ve posted a positive gross profit—$206 million, no less. One does so enjoy a company that begins to behave like a proper business rather than a science project with headlights.
Let us begin with what’s working. While total deliveries were down (8,640 in Q1 vs. over 14,000 in Q4 of last year), the underlying economics improved. Rivian carved $22,600 off the cost of each vehicle versus Q1 2024—a surgical feat worthy of a private equity firm in a bloodless mood. Automotive gross profit flipped from a $497 million loss to a $92 million gain. The software and services division pulled in another $114 million, which, frankly, is the real tea. If they can build the Rivian Autonomy Platform into a revenue machine, they might just drive past their peers and never look back.
Speaking of autonomy: 55 megapixels of camera input and 200 trillion operations per second in on-board inference? My heavens. That’s more processing power than one of my old hedge fund boyfriends ever managed. And their vertically integrated AI data loop—the so-called "data flywheel"—suggests they’ve actually done their homework. A hands-free, eyes-on highway feature has launched. One hopes the gentlemen in marketing refrain from calling it "Rivian Roulette."
Still, it’s not all sunshine and SXSW joyrides. The company’s revenue dipped year-over-year, thanks to frontloaded van deliveries last quarter. They produced more vehicles (14,611), but the delivery hiccup stung, revealing a vulnerability to supply chain theatrics. Nonetheless, Rivian kept free cash flow to a tidy negative $526 million—a far cry from the $1.5 billion inferno of Q1 2024. Modest applause.
Where the story gets properly aristocratic is on the balance sheet. $7.2 billion in liquidity, plus potential infusions from Volkswagen ($3.5B) and the Department of Energy ($6.6B), gives Rivian the kind of runway that would make Boeing blush. If one were to be catty, one might call it nouveau riche; if generous, then well-capitalized. I choose both.
As for R2—the midsize SUV slated for a $45,000 price tag—it’s not yet in production, but the prototypes are moving down a pilot line with confidence. Their manufacturing expansions in Normal, Illinois (such an unfortunate town name) appear on track. Meanwhile, the HelloFresh partnership for commercial vans keeps their B2B channel bubbling away like a competent butler—always useful, rarely exciting.
All told, Rivian remains a compelling wager. The net loss of $541 million is still a ghastly figure, but one must remember: this is a company transitioning from dream to discipline. And they’ve clearly decided to learn their arithmetic. Whether they can outrun Tesla’s shadow or merely exist in its penumbra remains to be seen, but this quarter earns them a very specific commendation.
Granny’s Verdict: Tolerate
