Rivian Automotive Inc (RIVN)

[eastunder]

Rivian investors to seek details on path to profits at investor day
https://finance.yahoo.com/news/rivian-investors-seek-details-path-102804260.html
Akash Sriram
Updated Thu, Jun 27, 2024, 7:11 AM MDT2 min read

By Akash Sriram

(Reuters) -Rivian shareholders will seek details on the company's upcoming models and progress in cutting costs at an investor day event on Thursday, two days after the US electric vehicle maker announced a $5 billion investment from Volkswagen.

The JV, which will give VW access to Rivian's electrical architecture and software, is a "vote of confidence" in the American automaker's prospects as it looks to produce and sell less expensive R2 and R3 crossovers to compete with Tesla's bestselling Model Y SUV.

Amazon.com-backed Rivian still lost about $39,000 per vehicle sold in the first quarter, but analysts expect the company to post its first quarterly gross profit in the fourth quarter.

Rivian halted production for three weeks in April to implement cost-saving measures. Reuters reported last week the company has retooled its manufacturing process, resulting in a 35% reduction in the cost of materials for vans and savings of "similar magnitude" for its other lines.

"Rivian will be sharing more about the R2 and R3 models, as well as details on the deal with Volkswagen," said Michael Shlisky, analyst at D.A. Davidson. "I am sure financial details will be discussed, but they may wait until next week to share Q2 sales figures and guidance updates."

Demand for electric vehicles has faltered amid high borrowing costs, and as buyers turn to cheaper gasoline-electric hybrid vehicles.

Rivian expects to produce between 9,100 and 9,300 units in the second quarter and hand over between 13,000 and 13,300 vehicles to customers in the April-June period, it said in a presentation for the investor day.

Wall Street had expected quarterly deliveries of 10,282 units and production of 9,369 vehicles, when the company reports quarterly figures on July 2, according to analysts polled by Visible Alpha.

Shares dropped about 2% in premarket trading on Thursday.

Even Tesla is struggling and is expected to report its first drop in annual sales this year. It has slashed prices and is offering incentives to sell more vehicles.

Among EV startups, Rivian is best placed to survive weak demand, thanks to the investment from VW. Some of its peers such as Fisker have filed for bankruptcy.

Rivian had nearly $6 billion of cash and cash equivalents at the end of the March quarter.

To save cash, Rivian plans to make the new models at its existing Illinois facility and paused investments in a previously announced plant in Georgia.

Rivian's stock has lost more than a third of its value this year, even after its best-ever one-day gain of 23% on Wednesday, partly due to the company sticking to its production forecast of 57,000 for the year - roughly the same as 2023.