Rivian Outlines Roadmap And Cost-Cutting Measures At 2024 Investor Day

Rivian held its first-ever Investor Day, providing insights into the company’s roadmap to profitability and its next generation of electric vehicles (EVs). CEO RJ Scaringe led the presentation, spotlighting several plans from Rivian’s software-defined EVs to in-house EV technology advancements.

In the presentation, Rivian’s focus on cost reduction and efficiency was the central theme. The company implemented major production improvements including cutting 100 steps from its battery-making process, removing over 50 components from the body shop, and eliminating 500 parts from vehicle designs.

In addition, Rivian’s new in-house Enduro and Ascend drive units are reducing costs and enhancing performance. As a result, these efforts are sought to lower production costs and make Rivian’s vehicles more accessible to the EV market.

Interestingly, the presentation also showcased new EV models that are hidden with no further information disclosed. For GEN 2, it shows one model being hidden and MSP also showed one as well. As for the Affordable Mass Market column, all the EV models were hidden. These could be EVs that are entry-level models made to be affordable for new buyers.

Notably, the upcoming R2 model which was first unveiled in March 2024 with a starting price of $45,000, is set to play a major role in Rivian’s expansion plans. The company reported over 68,000 reservations for the R2 within 24 hours of its unveiling.

Production of the R2 is now aimed to start in early 2026 at Rivian’s Normal, Illinois plant. This decision resulted in projected savings of $2.25 billion while accelerating the R2’s market entry.

The presentation also saw Rivian’s projections of its R2 model to account for up to 72%, or 155,000 units, of its total production capacity of over 200,000 units at its Illinois plant. As of now, the plant can produce 150,000 Amazon commercial delivery vans along with its flagship R1 SUV and pickup EVs.

Rivian also reaffirmed its 2024 production guidance of 57,000 units and aims to reach positive gross profit in Q4 2024. With the company outlining ambitious financial targets including a 25% gross margin, 10% free cash flow, and adjusted profit margin in the “high teens,” it also expects to reach positive adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) by 2027.

Moreover, Rivian recently announced partnership with Volkswagen, which plans to invest up to $5 billion in the company by 2026. This partnership will focus on developing electrical architecture and software technology, with Volkswagen potentially using Rivian’s systems in future EVs.

With Rivian’s presentation at its 2024 Investor Day event illustrating plans for continuous improvement and cost-reduction targets, the company has prepared itself to navigate the competitive EV market with its next-generation EVs and technology to the main stage. As EVs become more advanced while cost-effective, Rivian is making the steps to ensure it. Click Here to view the full presentation slides.

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