Rivian Automotive Inc. sees continued robust demand for its electrical R1T pickup and R1S crossover and won’t be a part of EV rivals comparable to Tesla Inc. and Lucid Motors in chopping costs to stimulate gross sales, CEO RJ Scaringe stated on the startup’s second-quarter earnings name Tuesday.
“We take a really methodical and considerate strategy to how we take a look at our automobile pricing,” Scaringe stated, pointing to automobile configurations that may considerably elevate or decrease the worth, making a broad value band for the R1 merchandise.
“As we take into consideration the positioning of the product, the capabilities of the product — on-road, off-road, dynamically — and the function set that is within the automobiles, we really feel fairly comfy with the positioning of what we have finished,” Scaringe stated in response to an analyst query about price-cutting.
The bottom R1T begins at $74,800, with delivery, and the bottom R1S begins at $79,800, with delivery. Greater trims with bigger battery packs, 4 motors and different facilities can push the fashions nearer to $100,000.
Rivian not offers the precise variety of its order backlog, because it did final 12 months, however Scaringe stated orders will take Rivian many months to meet at present manufacturing charges.
“We really feel very assured within the continued backlog we’ve got,” Scaringe stated in response to a query about demand, which has weakened at some EV rivals. “We now have deep visibility into 2024 with the backlog that is established.”
One signal of Rivian’s wholesome demand, Scaringe added, are residual values for its used automobiles available on the market.
“The R1 merchandise throughout the truck and SUV segments are among the many greatest residual values of any product in these classes, no matter electrical or combustion,” Scaringe stated. “Our automobiles are sustaining their worth extraordinarily nicely.”
Rivian raised its manufacturing forecast for 2023 to 52,000 automobile from 50,000 beforehand as supply-chain constraints ease for the Irvine, Calif., automaker. The forecast consists of the EDV electrical supply vans that Rivian makes for Amazon on the startup’s Regular, In poor health., plant alongside the R1 client merchandise.
EV transaction costs have been falling this 12 months, led by Tesla’s sharp value cuts earlier and better gross sales incentives. That has pushed EV makers, together with legacy automakers, to observe swimsuit as provide outstrips demand.
Automaker gross sales incentives on EVs averaged about $4,000 per automobile in July, about double the common within the year-earlier month, J.D. Energy stated.
Competitor Lucid sharply lower costs on its Air sedan on Saturday and Ford sliced about $10,000 off its base F-150 Lightning electrical pickup final month, making it about $23,000 inexpensive than a base R1T. Tesla can also be poised to launch its Cybertruck electrical pickup later this 12 months however has not introduced the mannequin’s last pricing.
As a part of its second-quarter monetary report, Rivian reported a $1.2 billion internet loss in contrast with pink ink of $1.7 billion throughout the identical quarter final 12 months. Income tripled to $1.1 billion.
The corporate additionally stated it expects a smaller working loss in 2023. Shares rose about 2 % in after-hours buying and selling.
The upper manufacturing forecast comes after the EV maker delivered 12,640 automobiles within the April-June interval, beating analysts’ estimates of 11,000.
Rivian additionally reported a significant enchancment in its gross margins, which stood at detrimental 37 % within the quarter, in contrast with detrimental 81 % within the first quarter. It now expects a $100 million enchancment to its working loss this 12 months at $4.2 billion.
As the corporate grew deliveries and constructed efficiencies within the April-June quarter, it posted an adjusted lack of $31,595 per automobile offered, in contrast with a lack of $67,329 within the earlier three months.
Money and money equivalents on the finish of the quarter had been $9.26 billion, in contrast with $11.57 billion as of December 2022.
“Our focus very a lot stays in not solely persevering with to ramp manufacturing in our Regular manufacturing facility,” Scaringe stated, “however importantly driving prices down throughout the enterprise on our path to profitability.”
— Reuters and Automotive Information workers contributed to this report.