Anika Begay
Rivian’s financial losses have increased as it has abandoned its last-generation R1 trucks and SUVs in favor of newer, more affordable versions, a sign of how the company could use the $5 billion it could raise as part of a recently announced deal with Volkswagen Group.
The company announced Tuesday that it lost $1.46 billion in the second quarter of 2024, up from a first-quarter loss of $1.45 billion. The loss was nearly $300 million worse than the second quarter last year.
As a result, Rivian’s cash and cash equivalents were $5.76 billion at the end of the quarter. This includes the first $1 billion from VW.
This all comes as Rivian has begun shipping revamped versions of the R1 that are simpler and cheaper to make. Rivian CEO RJ Scaringe said these vehicles, shipped at scale, should help the company reach positive gross profit by the end of 2024.
But with Rivian expecting to produce and sell roughly the same number of electric vehicles this year as it did in 2023, all eyes will be on its second model, the R2 SUV, due in 2026, to help it establish itself as a sustainable company.
Until then, Rivian will be aided by the additional $4 billion that VW will invest in the young automaker, assuming the two companies close the deal. That should happen in the fourth quarter of this year. Once completed, the deal will see Rivian and VW create a joint venture that will leverage Rivian’s advanced electric architecture and software. That technology will feed into Rivian’s R2 and VW’s many EVs, and perhaps those built by other automakers.
Rivian will also use other methods to beef up its business. For example, the company said Tuesday that it sold $17 million in regulatory credits to other companies in the second quarter. The company is also developing an electric vehicle charging network to support its vehicles, which could generate additional revenue.
This story is developing…
