Rivian at BofA Securities Automotive Summit: Strategic Growth and Challenges

On Wednesday, 16 April 2025, Rivian Automotive (NASDAQ:RIVN) presented its strategic outlook at the BofA Securities Automotive Summit. The company highlighted its ambitious expansion plans, focusing on increasing production capacity and improving financial performance. While Rivian aims to capitalize on its affluent consumer base and brand-building efforts, challenges such as tariffs and trade policies remain a concern.

Key Takeaways

• Rivian plans to expand its production capacity at the Normal, Illinois facility to 215,000 units and establish a new facility in Georgia with a capacity of 400,000 units by 2028.
• The company reduced its cost of goods sold by $31,000 per unit in Q4 of the previous year, driven by engineering improvements.
• Rivian’s joint venture with Volkswagen focuses on electrical architecture and software, with a total deal size of $5.8 billion.
• Tariffs and trade policies pose potential material cost impacts, but Rivian has strategies to mitigate these effects.
• Rivian targets breakeven EBITDA by 2027, leveraging R2 production and increased capacity utilization.

Production Capacity and Expansion

• Normal Facility: Current capacity is 150,000 units, with plans to add 155,000 units for R2 production. A temporary shutdown is planned to enhance paint shop capacity.
• Georgia Facility: Planned in two phases, each adding 200,000 units. Groundbreaking is set for 2026, with production starting in 2028.
• R2 Production Ramp-Up: Begins in the first half of 2026, with full capacity expected in 2027.

Consumer Base and Brand Awareness

• Consumer Profile: Rivian’s customers are affluent, educated, and tech-savvy, prioritizing performance and utility.
• Brand Initiatives: Efforts include converting combustion vehicle owners to EVs, highlighted by the electric joyride experience at South by Southwest.
• Vehicle Trade-Ins: R1 buyers trade in a mix of vehicles, suggesting a diverse customer base.

Financial Performance and Outlook

• Cost Reduction: Achieved a $31,000 reduction in COGS per unit due to design and manufacturability improvements.
• EBITDA Breakeven Target: Aims for 2027, driven by R2 production and increased software revenue.
• Cash Position: Holds $7.7 billion in cash, with additional funding expected from VW and potential DOE loans.

Volkswagen Joint Venture

• Deal Structure: Total size of $5.8 billion, with $2.3 billion received and $3.5 billion contingent on milestones.
• Technology Focus: Development of electrical architecture and software stack for implementation in both Rivian and VW vehicles.

Tariffs and Trade

• Impact Assessment: Tariffs pose challenges with potential cost and access impacts.
• Mitigation Strategies: Rivian is working with suppliers to mitigate tariff impacts and ensure compliance with trade agreements.

Readers interested in a detailed account can refer to the full transcript below.

Full transcript - BofA Securities Automotive Summit:

Unidentified speaker: Thanks for everybody for for joining us for the second to last session of our two day marathon. Very happy to have Rivian and Claire McDonough, chief financial officer. Claire is obviously managing a very, you know, complex situation and doing a very fantastic job on top of the company, doing a fantastic job, at least in my opinion, with product. I mean, we’ve driven the r one t many, many times. And I I will say there was a time where I drove it very quickly.

I won’t say the speed the speed right now because we’re, you know, in in official territory very quickly. Stopped it. The suspension was raised and then drove over a 45 degree rock wall, and I think it was less than a minute for that suspension to go up. I would say it’s one of the most amazing products I’ve ever driven, you know, including many many many many supercars over the the past few decades. So I think the product is is really quite fantastic in the company.

In addition to that, they have some vans, which are pretty cool on on the EV side, in addition to the r the r ones. We’re looking forward to the the r two coming up come out of normal and then ultimately out of Georgia. So there’s a lot of great products, you know, in front of the company. There are also a lot of challenges as far as as far as getting volume and profits up. So we’re looking forward to hearing about not just the good news for the product side, but also fighting through, you know, the valley here until we get to the r two and real volume volume growth.

So, Claire, maybe if we could think about, you know, ’25 and and maybe over the over the next few years. I mean, first, you know, as as you think about the world as we know it right now and it’s shifting rapidly, as you think about the, you know, the roughly 46 to 51,000 units you talked about for for this year, you know, on on the production side, you know, is that the kind of sort of run rate, you know, we should think about for the R1 and the EDV over time? Or do you think there’s some potential that that could actually be higher? Because I think in normal right now, you have about 150,000 units of capacity, and then we’re gonna see, you know, our two capacity put put in place as we go through the course of this year and into next year. But how do you think of sort of that baseline?

And I you know, I love RJ’s, you know, statement of it’s, you know, our handshake to the world. So, you know, the volumes matter, but, know, we got other stuff coming that’s gonna be more impactful from a a financial standpoint. But I mean, how should we think about sort of that those ongoing volumes? Maybe not even just this year, but you know, what you think with the R1s and the EDV over time.

Claire McDonough, Chief Financial Officer, Rivian: Sure. So last year we made the decision to put our first line of R2 production in our normal facility. And one of the core advantages of us adding that additional volume to the normal factory is the manufacturing flexibility that it provides the company. And so in total, as you mentioned, we have 150,000 units of capacity today. That’s 85,000 units of R1 capacity, 65,000 units of commercial van capacity.

And we’re in the process right now of just over a million foot expansion that will house our body shop and general assembly for the R2 facility that will bring online an additional 155,000 units of R2 capacity within the plant. The overall nameplate capacity of normal will be centered at about 215,000 units in total. And so what that means is we can’t run all three lines on three shifts at full operation and full tilt. But it provides us a lot of flexibility such that if we were building R2 across three production shifts, for example, at 155,000 units, that would still leave us with roughly 60,000 units to split between our one as well as the commercial vans. And as a CFO, we have the opportunity to really maximize the overall growth profit potential as we think about the throttle or decision making process we can make centered around what the volumes of each of those manufacturing lines can deliver in the normal facility.

Unidentified speaker: And I guess maybe one of the reasons that the two fifteen might be the sort of the max capacity when you put all all the three products together. Is is there a paint shop? It it would that be the the bottleneck there and then theoretically that could be relieved over time if if needed? Or or I mean, is that is that the one missing part in that that million unit capacity?

Claire McDonough, Chief Financial Officer, Rivian: The paint shop is

Unidentified speaker: The million square foot capacity.

Claire McDonough, Chief Financial Officer, Rivian: Right. The the paint shop is is the primary constraint. And we’ll we’ll have a shutdown in the second half of this year. And that that time that will take down, which will be roughly about a month, will be focused on increasing the capacity of our paint shop, which is one of the primary objectives of the shutdown itself as we prepare our production facility for R2 in aggregate. So there certainly over time could be additional paint shop and the challenge would be thinking about paint shop expansion or potential there.

But there certainly are opportunities for us to think about maximizing the volumes out of the normal facility.

Unidentified speaker: And if you think about Georgia facility and the timeframe of when that’s coming online, and what ultimately I mean, there’s probably gonna be some, there are going be phases there, right, of the capacity. Maybe when you think now, because you’ve now R2 is going go into normal first, you know, what’s the timeline on Georgia plant and sort of maybe the initial capacity and then potential capacity over time?

Claire McDonough, Chief Financial Officer, Rivian: For the Georgia facility, we plan to build it out in two phases. Each of those two phases, we expect to have 200,000 units of capacity. So in aggregate, we’ll build in our end state 400,000 units of total capacity in Georgia. The first two hundred thousand units of capacity we’ll break ground on in 2026 and expect to start producing vehicles out of Georgia in 2028 as well.

Unidentified speaker: Okay. There’s certainly a lot of concern around the consumer right now, but you’re dealing with generally a higher end consumer for the R1s at the moment. We’ll get the R2, there might be a little bit more sort of a mass market consumer, an R3 that comes in. Maybe you can talk about the current profile of your average consumer, whether it be, you know, AGI or geography or demographics of those folks.

Claire McDonough, Chief Financial Officer, Rivian: Our R1 consumer is highly affluent, highly educated. They’re technology savvy as well. They’re drawn to many of the design aesthetics of our product, the capabilities, the performance and the core technology that they find in our vehicles as a whole. And one of the big pieces that RJ approached the design and development of R1 centered around was creating a product that was truly no compromise. So as we thought about bringing a truck, an electric large SUV to the market, we saw a huge opportunity given that 80% of The US market today is centered in in trucks and SUVs.

It’s also the fastest growing area from a a light vehicle standpoint as well. And saw the opportunities as you started with your comments to say, how do we really debunk how consumers think about the product offering? Because it wasn’t with the intention of saying, let’s bring the best SUV or the best electric vehicle to the market, but instead let’s build the very best truck, the very best SUV that we can bring to market and allow consumers to have that first EV experience. As we see, many of our customers that are getting into their very first EV vehicles as a whole. We’re also for the EV enthusiast that loves and understands and and knows EVs the opportunity to to jump into a Rivian and experience a a new design and a new form factor with the brand.

Unidentified speaker: So do you have a breakdown of folks that that have owned an EV before versus versus not in in the buyer buyer base? And then this is maybe not the the the most fair question to ask you, but do how many of these folks, I’m not sure how you would measure this, are just buying it because the vehicle, and I I would certainly agree with this, is so good and they’re buying it, like, kind of regardless of of the powertrain and, like, not even kind of talking about that as they’re buying buying the r one.

Claire McDonough, Chief Financial Officer, Rivian: Right. One interesting data point and and we look at this is why are consumers purchasing? What was the purchase intent decision making process for the vehicle? And if you look at the Pareto of different alternatives, environmental decisions are pretty low on the list. For example, because it’s truly the performance utility, they’re getting all of that and they’re getting the benefits that an EV can provide as well.

But I think for many of our customers, they’re really resonating and drawn towards the capability of of the vehicles and the resonance of of the brand that we’re building as full.

Unidentified speaker: And and when you think about the the the brand awareness, I mean, is gonna become much more important as the r two ramps up and you’re looking to do a lot a lot more volume and and that’s where they, you know, I think the company starts reaching potentially escape velocity from a volume and and profit standpoint. But if you were to think of about the the brand awareness, is there anything that you think you need to do in front of that the the r the r two really kinda hitting, you know, volume, you know, production and and getting folks sort of, you know, butts and seats for a lack of better term is always important when you have a new product, you know, that you’re need to do in front of that that r two launch.

Claire McDonough, Chief Financial Officer, Rivian: The the biggest opportunity we have as a business is to take the more than 90% of new vehicle sales market that today are still buying combustion engine vehicles and have many of those customers that have never even driven an EV before to come and experience the capability and performance that a Rivian has to offer as a whole. So recently we sponsored South by Southwest. We set up what we called an electric joyride experience. So we took an empty lot down in Austin, Texas, built an off road style course similar to what you experienced outside of our manufacturing facility in Normal. And we did 7,000 test drives of customers that were lined up around the block because they had never experienced anything like this.

And when you get into a Rivian and you’re able to see their performance of climbing steep grades or making turns on maybe one or two wheels as you navigate the course. It really debunks how consumers think about what an electric vehicle can be and the capabilities and performance that it can have. And so our top priority continues to be getting more and more customers behind the wheel or into our vehicles so they can experience them firsthand. And that’s going to help tune up the market as we approach R2 and hopefully continue to persuade many first time EV buyers to jump into a Rivian.

Unidentified speaker: So on the R1, what have been sort of the vehicles people have been trading out of to buy the buy the R1 if you’ve got those stats? So that would be sort of real world stuff. But two, as you think about the R2 launching, you know, what would be the products? I mean, and I think we’re we’re being surprised that it’s not, you know, similar crossovers or, you know, other crossovers. But I’m just curious what what you’re seeing in the data for the r one and as you kind of think about that buyer for the r two, you know, what are they what are they in and what are they stepping out of to to buy the r two?

Claire McDonough, Chief Financial Officer, Rivian: Sure. As as we look at the the r one consumer base, the vehicles that they’re coming out of largely reflect the nameplate volumes and and market share as a whole of what you would see in in The US. So it’s not just premium vehicles, not just EVs, but lots of Toyotas and Fords and GMs and things of that capacity as a whole. It’s also a very diverse set of vehicles that we’re receiving as customers are making in a number of cases a much bigger price point step up into a Rivian relative to the vehicle that they may have previously owned. That doesn’t mean they’re stretching up from their own affordability.

Many of them are quite affluent, but they chose to have more of the family mover for all of their gear and stuff. And instead, we created a premium, you know, product and offering that could give them the utility they were looking for.

Doug: That’s nice.

Unidentified speaker: So but when you and when you think with the r the r two, do you think it’s gonna be a similar sort of, you know, you know, smorgasbord almost of of of folks coming in from, you know, Camrys and RAV fours, but also maybe Wranglers and and, you know, Evokes, you know, and and and stuff like that. Is that it’s gonna be that do you think that’s probably what what you’re gonna be hitting with the r two?

Claire McDonough, Chief Financial Officer, Rivian: We think that it’ll will be sort of a similar mix overall as as well.

Unidentified speaker: Got it. Doug, I’m sorry. Yeah. Do you have a question?

Doug: How does that compare to other like luxury brands? Because I would have expected it’d be you’d depart in there, like, high end Audi or BMW or Mercedes. It’s kinda interesting that you’re able to get someone kinda get out of a I don’t wanna get out of a comfort zone. And I won’t say comfort zone, but I’m just curious of what in the marketing detail, seems pretty

Unidentified speaker: unique. I

Claire McDonough, Chief Financial Officer, Rivian: I would say we have a full gamut. So we also have the Porsche customer that buys an r one t

Doug: Right.

Claire McDonough, Chief Financial Officer, Rivian: Truck because it’s, you know, high performance vehicles as well. So it’s a really a a broad based mix of of everything from the minivan that gets traded in to the Tesla to the, you know, premium offering.

Doug: So you’re a lot of customers. That’s good.

Unidentified speaker: Yeah. And the opportunity in Europe right now given that some theoretically, and we’ll see because I think you guys kind of traverse the the EV sort of nomenclature in isolation. But if we think about what the opportunity might be in Europe, where there’s a a certainly a a push, and we’re gonna get into tariffs later. But, like, excluding, you know, tariffs, I mean, you know, the the entree into the the European market seems like something that you guys are are looking at, and it seems like it should be very viable, particularly for the r the r two. You know, mean, is that, you know, is that an r two moment or is that you’re seeing anything on the r one side at this point?

And what are your expectations for the r two in in that in, you know, as we get there?

Claire McDonough, Chief Financial Officer, Rivian: So r two was designed from the very get go for global market expansion. And that will be the primary global scaling product for the Rivian brand internationally as well. So we’ll start production in the first half of twenty twenty six and then begin exporting R2s over to Europe as well as we build out our sales and service infrastructure. Today we do support Amazon in Germany. We have a handful of service centers in Germany to support their operations, but we’ll continue to grow that footprint as we approach the our two startup production.

Unidentified speaker: But is there a significant expectation for the first two hundred thousand tranche or the 50,000 in normal and the 200,000 tranche in Atlanta or outside of Atlanta in Georgia to, you know, to be shipped internationally or is is some of that that first hundred and fifty thousand mostly gonna be US, North America? And then when you get Georgia ramped up, that’s where you you start going going to Europe or what what’s kind of like the rough split on what you’re thinking on on the production side and and ultimate destination?

Claire McDonough, Chief Financial Officer, Rivian: On the production side, the the expectation is to use those early volumes out of normal to build brand. And for Rivian to take more of a measured approach as we look at each of the countries in Europe that we plan to enter, we’re not going to enter every country all at once, but have a phased in approach as we build the brand. So once we’re at more meaningful scale with the addition of the Georgia volumes, we’re ready to increase that export volume over to Europe as a whole. But we’ll start with more brand building efforts out of the gate from our normal capacity.

Unidentified speaker: Switching to maybe the margin side of the equation, you went through the first generation now and the second generation of the R1. A lot of that had to do with design and engineering and taking cost out the vehicle as opposed to creating a whole new vehicle. It really was more of a of a cost and, you know, performance function. Mhmm. You know, how much better are the margins on on the second generation r ones?

And, you know, is there an opportunity to potentially even go further beyond that? I mean, there’s always the issue of scale driving driving better margins, but, you know, to to redesign and continuously improve potentially the the the margin profile of the r ones.

Claire McDonough, Chief Financial Officer, Rivian: For r one, we started to see some of the financial impacts in the fourth quarter of twenty twenty four. So in the fourth quarter, we were able to reduce our cost of goods sold per unit delivered by $31,000 The majority of that reduction in COGS per unit was driven by improvements in our R1 material cost as a whole. And so that’s just an indication of the relative improvements you mentioned of some of the engineering design driven changes that were introduced including our new network architecture, changes to our structural battery pack that was a significant cost savings for us. And beyond the materials cost savings, we’ve also made improvements in the design for manufacturability of the product as well. And we’re able to increase the manufacturing line rate of R1 that will enable us to reduce our labor and overhead costs as well per unit, which will help drive some ongoing savings as we look at 2025 as a whole.

Unidentified speaker: And and without kinda getting into guidance too much, just kind of just the complexity of the LCNRV discussion. I mean, when are we when are we beyond that that being a big swing factor? I mean, is is that we go through as we go through ’25, we’re we’re going to get through that on the volume, is it really a ’26 event?

Claire McDonough, Chief Financial Officer, Rivian: We’re pretty much there. We ended the year with about $70,000,000 of overall LCNRV and firm purchase commitment value, and that will continue to we expect that to continue to come down. So I would say in terms of the significance in size and scale, it’s already smaller.

Unidentified speaker: It’s great. It makes it easier for dummies like to model stuff because that gets very complicated. If we think about the downtime in the second half of this year for the changeover or for the tooling on the R2 in the normal plant, you guys have telegraphed and talked about that. Is there anything else that would come up with the normal plant once we get beyond that where would be significant downtime, you know, in the future? Or once that’s in place, we have normal kind of running, you know, full speed and normally, you know, over time.

Is there anything 26 or 27 that you could foresee as a reason for any significant downtime in normal?

Claire McDonough, Chief Financial Officer, Rivian: As we think about the R2 related impacts in normal, the biggest downtime we’ll take as we integrate R2 is associated with that second half of twenty twenty five shutdown. Our teams will continue to do work on weekends, around the clock, in sort of off hours from a manufacturing perspective to try and mitigate any disturbance from a manufacturing perspective. But there certainly could be items that we would need to take a shop down for a short period of time to make some adjustments to the line as we initiate our production builds.

Unidentified speaker: So as we get we get through that calling it a changeover, it’s not a changeover, that that that that that as we head into ’26, and ’26 should have capacity to do at least 60,000 or 60,000 r ones and EDVs, and that 55,000 units capacity for the r two, that’s gonna be ramping through 2026. So means it really second half of twenty twenty six that that one fifty five on the r two would be sort of at a at a at a run rate, or or is maybe even that too soon or too late in the 2021? That

Claire McDonough, Chief Financial Officer, Rivian: would would be too soon. The the way that I would characterize it is we plan to start and run for most of 2026 with a single shift of production as we ramp up and ensure that the supply base is ready to scale with us. Our expectation is towards the very end of the year, we would add in a second shift of production. And then to get to the full 55,000 units, that would require a third shift, which we would expect would come online in ’27.

Unidentified speaker: Okay. And think so that gets us to the next question of the the breakeven EBITDA in 2027, I think is what you guys have have talked about. If we step forward from where we are right now to that breakeven EBITDA in 2027, what are the the major walk factors or factors that are that are gonna get us there? You know, R1, R2 and then R3. We’re going be talking about R3 at that point.

But yeah. For

Claire McDonough, Chief Financial Officer, Rivian: R2, R2 is not just a benefit as it pertains to the unit economics of the program itself, which today are on track and meeting management’s expectations in terms of our source content, which the vehicle is largely sourced. In our last earnings call, we mentioned it was about 95% sourced at that point in time. And has a non material cost structure per unit, which is less than 50% of R1, given it’s a much easier vehicle to manufacture and we’ll have a line rate that’s far in excess of the installed capacity in R1 as well. And so as you think about the opportunity and margin profile of R2 that then also provides benefits to our existing products. So we have R1 and the EDV that are now benefiting from the fact that instead of running roughly the 50,000 units that we ran at last year, we now have the opportunity to be scaling up towards the 215,000 units of overall production as a whole within the normal facility.

And back in our Investor Day, for example, we showed that the fixed cost of bringing our two volumes into normal had about a 34% improvement in our fixed cost per unit for R1 because of the shared cost absorption that R2 would help alleviate as a whole. So it’s a big enabler as we think about the overall automotive gross margin potential of the normal facility. Beyond the automotive side of the business, we’ll also see meaningful growth in our software and services revenue as a whole and the margin and gross profit contribution that we’ll see given the components and benefit of the joint venture, the benefits that we’ll see from our remarketing business, our maintenance and service business, for example, the growth and maturity of our charging infrastructure, things of that nature in addition to many of the software subscriptions that we offer customers as well. And then beyond that, we’ll have some growth from an overall SG and A standpoint, but more modest levels of growth.

Unidentified speaker: Okay. Now we’re going to skate it to zone that’s a little bit more slippery in talking about sort of reg credits and tariffs a little bit where things are very uncertain. So I mean, the answers to these are kind of tough to necessarily nail down. But if you think about that move to breakeven by 2027, is there a significant assumption on rate credits being recognized in that? Or is this all organic sort of you know, the improvement could be all organic x rate credits?

And you can call rate credits organic because I mean, know, there may be a place where they’re very valuable, there might be a place where they’re not very valuable. It’s very difficult to call, you know, at the moment. But I mean, what’s your current assumption there on rate credits in that in that walk?

Claire McDonough, Chief Financial Officer, Rivian: Our assumption is that we will continue to have the benefit of of regulatory credits on a go forward basis.

Unidentified speaker: Okay. And is that I mean, is that just US or is it would that also include rate credits in Europe? I mean, because there are some companies that are doing fairly well in both regions.

Claire McDonough, Chief Financial Officer, Rivian: It would include both, but I would say that US business and volumes would be far greater than Europe at that point in time.

Unidentified speaker: Got it. And then this gets a bit intertwined with the JV. So I was just, you know, curious if you could talk about the JV with VW, the funding mechanisms or the milestones that you need to reach to release some of that funding. I think the total is $5.5600000000.0 or 5,800,000,000.0 in total. You’ve got a billion already to kick off, and then the milestones come over time, and the rest is is released over time.

So maybe you could remind us of actually how that gets released and the milestones you need to hit to get that.

Claire McDonough, Chief Financial Officer, Rivian: Sure. So the total deal size was 5,800,000,000.0. We’ve received 2,300,000,000.0. So we have another 3 and a half billion still to come. The the first tranche of an additional billion dollars of capital to Rivian is based off of financial milestones centered around two positive quarters of of gross profit.

In Q4, we achieved 50% of that milestone. So for example, if in Q1 we had a million dollars of gross profit, we would achieve the milestone as a whole. Or if in any subsequent quarter we achieved $50,000,000 of gross profit, then we would achieve the milestone. The next one up is centered around a development milestone. So this is the earliest payout of sort of this next billion dollar tranche would be in the early part of twenty twenty six.

And it’s based off of positive winter testing for some of the Volkswagen vehicle programs as a whole. In October of twenty six, also expect to receive a billion dollars of non recourse debt to Rivian. That’s not milestone based. It’s really a time based investment as a whole. And then the last piece, is about $450,000,000 as well, we’ll receive at the when the first vehicles out of from Volkswagen have the JV technology in them or from a time base, they’ll they’ll pay that out in January of twenty eight.

Unidentified speaker: So I think on on this JV, given what’s going on at the moment, think there’s some people that, you know, have a a lot of concern and when we get into tariffs specifically, but, you know, about how, you know, VW may be treated or tariffed here in The US, maybe their commitment to The US market, sort of on on the on the concern side. But then potentially on on the positive side, there’s a case to be made. You could end up being partial contract manufacturer and this is all getting, you know, out outside the realm of what you guys have kind of laid out in the plan. But considering that you’ll have capacity, you’re a US company or European company, the real the reality is, I mean, you may have a a much this JV might have a a much bigger role to play in the course of events in in the life cycle of of Volkswagen here in The US. I mean, is any of that kind of discussion going on right now of, like, I know we got the scope of the JV, but but, obviously, this is a a partnership and, you know, beyond just the JV that there might be other opportunities.

I mean, has that maybe that was always part of the discussions that there could be other things to do over time. You might be able to answer it that way to say, hey, listen, we’re we’re always talking about, you know, the potential outside of what we’ve scoped here, but it seems like that might be even more acute and a and a bigger opportunity for you and them, you know, everything that’s going on at the moment.

Claire McDonough, Chief Financial Officer, Rivian: Right now our focus is getting the JV and getting the technology. We’ll first go out of the JV into R2, and then we’ll go into a couple of Volkswagen Group products after that. So getting that off the ground successfully, there certainly are a number of ways for Rivian and Volkswagen Group to partner in the future as well.

Unidentified speaker: Okay. When we think about the tariffs, and I hate to go there, but we to kind of cover it real quickly. I mean, what is your current, you know, state of affairs as far as exposure? I mean, producing a normal sourcing a lot in The US, lot in North America. I think batteries come from South Korea, I believe.

You know, what do you I mean, as you game plan this, I mean, what are current exposures and your sort of your thought process around the current environment and, you know, risks and potentially opportunities?

Claire McDonough, Chief Financial Officer, Rivian: As we think about the current complexity and environment as a whole, it is quite a challenging one for all OEMs to navigate and assess. As we look at our battery cells there, we are fortunate to have worked with our suppliers and have cells on-site that will help mitigate any tariff potential impacts for Rivian for 2025 on the There’s a global supply chain that Rivian is sourcing from despite the fact that we’re outside of our cell components, largely USMCA compliant from a sourcing perspective. But all OEMs have broad based global exposure, even if we’re sourcing from a US domestic supplier as a whole that has their Tier 2s and Tier 3s that have exposure to raw materials or elements from global markets at large as well. So we’re definitely analyzing, assessing the situation, and there certainly could be material cost impacts associated with it. Certainly material access impacts associated with some of the existing trade policy CapEx headwinds as we think about some of the capital equipment that we’ll be bringing onshore out of China or other international markets to help support the bring up of R2 as well.

Unidentified speaker: Okay. And maybe, I mean, this is kind of related, but I mean, do you have a sort of calculations on price elasticity of demand And potentially, I remember one of the products originally got pushed far to the right that I was really excited about, and I think RJ was the was the r one x. You know, thinking about, you know, performance versions and and trim levels that might not just be raising price to off tariffs, but providing a little bit more content for performance to help, you know, deal with maybe higher might maybe higher cost. So maybe just simply price elasticity and then maybe are there other opportunities to, you know, provide a better product and, you know, and take price and make up for that, you know, that lost margin on the higher cost in that way as well.

Claire McDonough, Chief Financial Officer, Rivian: As we look at the broad base of consumers that are drawn towards our products, many of our customers are drawn towards the very best of Rivian. So that’s our max pack, our four ten mile range variance, our tri motor offering, which we have ramped up in Q4 and saw significant take rates there. In 2025, we’ll also be launching our next generation quad motor offering. So to your point, that allows us to stretch ASP even higher. It’s a ten twenty five horsepower vehicle.

It is insanely fun to drive. So you’ll have to do a test drive once we have those in the fleet as well. But then that again gives us some additional margin benefit on the high end. But there certainly are many customers that are stretching to get to a standard pack Rivian as well that are much more price sensitive. And so for us, we need to calibrate around some of the trade offs and to your prior point, how do we ensure that the higher end, higher margin side of the equation can help us compensate on driving some additional volume potential as a whole.

But today, market backdrop and the uncertainty and capital markets volatility certainly a challenging environment for consumers as well as they’re also trying to get clarity and inflation and what this means for them.

Unidentified speaker: And maybe to circle back to one of the other questions about know, who you’re conquesting from or where you who you’re or your consumers trading out of. I know it’s kind of a smorgasbord. It’s kind of, you know, kind of across the board. But is there you know, if we think about the German Lux crossovers, MEXs are made here, but the powertrains are are are imported and and, you know, Daimler is importing a lot of them and, you know, JLR is not importing at the moment. I’ve given you guys a hard time.

I think you guys really go up against JLR, at least in my opinion, and certainly on performance, and you probably outperform them anyway. But but, know, you you have a product that’s at least as good, if not better than than what JLR is importing. If those companies become more disadvantaged in in sort of their their cost structure and and right now availability of product, particularly in JLR’s case, you know, it just seems like you’re gonna have an umbrella to help deal with this maybe a lot better because your your production and your your domicile facility location here in in The United States. I mean, is that something that you kind of think about? I mean, because if the whole market’s going up and you can go up a little bit less than some of your your, I think, direct competition that you probably out compete anyway on from a product standpoint, seems seems like there would be opportunity on price.

It might not even be that obvious right now. And that’s my conjecture, maybe, but I mean, it just seems like there’s an opportunity there.

Claire McDonough, Chief Financial Officer, Rivian: We’ll definitely look and see and continue to study the broader competitive marketplace for products as a whole. And I think back to the prior conversation we had, one of the bigger opportunities for us is just a focus on increasing brand awareness because the brand awareness is still relatively low for Rivian. And that’s a huge opportunity for us to be part of the consideration set for many households that may not yet know about Rivian.

Unidentified speaker: Yeah. Maybe lastly, as we’re winding down here, if you think about sort of the the bridge to to self funding, you know, it seems like with the VW Capital, some deal the DOE loan that we’re probably at a point where you you may not need to raise additional outside capital. I’m just curious how long you think it is before you might need to raise outside capital if you you kind of or I think you’re at the point where we’re gonna get to the r two. The r two is gonna ramp, and we’re gonna be self funding as we get into ’27 and ’28. What’s the the the current stance on that?

And as you think about sort of the cascade through the the next two to three years, you’re already kind of pinch points on on production ramps where things go down and, you know, working capital always gets tight and it’s it’s tough industry, you know, I mean, you know, from that standpoint because there’s a lot of money going in and out on a monthly basis. You know, how do you how do you think about sort of the the sustainability of of the the balance sheet through some of this incoming funding and ultimately getting to escape velocity on cash flow?

Claire McDonough, Chief Financial Officer, Rivian: So as of Q4, we had about $7,700,000,000 of cash and equivalents. We have another 3,500,000,000.0 coming from VW and a 6.6 up to $6,600,000,000 Department of Energy loan as well. So that collectively is just under $18,000,000,000 of potential capital funding for the business, which is fantastic. We will continue to be opportunistic as it pertains to the broader capital markets roadmap for the business as we have historically well.

Unidentified speaker: And when we get to that 2027 breakeven on EBITDA, I mean, I don’t know if I can’t recall that you guys have talked to a peer about a period or target frame for free cash flow positive. Would that be soon soon thereafter? I I would imagine. Or or, you know, ’28, ’20 ’9? Or or I mean, has that not been discussed?

Claire McDonough, Chief Financial Officer, Rivian: We haven’t put a

Unidentified speaker: a date on that.

Doug: Yeah. Right?

Unidentified speaker: I would imagine it might be.

Claire McDonough, Chief Financial Officer, Rivian: But would require Georgia volumes coming online to help support the runway.

Unidentified speaker: Got it. Well, we’re down to the last couple minutes. Are there any questions in the audience? We got one over here. Sorry, just the specific nature of the technology, is it really just software or what are they after?

Because it’s just, it’s very interesting that they’re so keen to invest in Rivian to this extent.

Claire McDonough, Chief Financial Officer, Rivian: Sure. The joint venture is centered around the electrical architecture. And so it’s a zonal based network architecture and the full end to end software stack that helps sit on top of that architecture as a whole. Part of the opportunity is the scalability of the platform that Rivian has built, which if you think about our business and our product roadmap was built to accommodate all different types of form factors from our commercial van to our one products as a whole. And what Volkswagen saw was with the transition that Rivian had to our Gen two offering, the opportunity to take a proven architecture and utilize that across their portfolio of EVs that they’ll be introducing into the market over the coming years as well.

Unidentified speaker: Great. And I think with that, just stay on time, we’re going to wrap up. Claire, thank you for the time today and all the help over the last two years. It’s been a great partnership. Thank you very much.

We appreciate it. And we’re looking forward to the test drive on the quad motor. Let me know when we’re in.

Claire McDonough, Chief Financial Officer, Rivian: Sounds clear. Thanks.

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