Rivian Revenue Up 38%; R2 Now Its Top Seller

Rivian’s revenue rose 38% to $2.155 billion in the three months to 30 September, and its new R2 sport utility vehicle became the company’s best-selling model in its first full quarter on sale. The electric-vehicle maker’s net loss narrowed to $907 million from $1.17 billion a year earlier, according to the results release it filed with the US Securities and Exchange Commission on 29 October.

Rivian attributed the revenue growth to a 46% rise in deliveries, $81 million of revenue from regulatory credits and what it called strong performance from its software and services business. It also raised the bottom of its full-year delivery forecast.

R2 takes the lead

Rivian built 19,751 vehicles and delivered a record 19,248 in the quarter, figures it first published on 2 October. The R2, which launched in June, accounted for much of the increase from the second quarter, and outsold both the larger R1 and Rivian’s electric delivery van, the EDV. “We had great results with R2 becoming our best selling vehicle by volume in the third quarter,” chief executive RJ Scaringe said.

The company has started a second R2 production shift at its plant in Normal, Illinois, and expects its production rate to rise over the coming quarters. The car’s arrival is already showing up in costs. Rivian’s earnings presentation says the automotive cost of goods sold per vehicle improved by more than $12,000 from the second quarter, “as a result of a higher R2 mix and fixed cost leverage”. It also says the ramp added about $120 million of extra cost in the quarter. In early October Rivian also began delivering new EDV variants, including an all-wheel-drive version and a larger battery pack that it says gives 30% more range.

Where the money came from

Automotive revenue rose 36% to $1.55 billion. Rivian says the gain came from higher deliveries and an $80 million increase in regulatory-credit revenue, partly offset by a lower average selling price as more R2s and vans were sold. The car business still lost money at the gross level, with a gross loss of $80 million against $130 million a year earlier. Rivian put the improvement down to higher volumes at a better margin per vehicle, regulatory credits and a refund it expects on tariffs imposed under the International Emergency Economic Powers Act, partly offset by R2 ramp costs.

Software and services revenue rose 45% to $605 million, with a gross profit of $256 million. Of that revenue, $354 million, or 59%, came from Rivian’s joint venture with Volkswagen Group. Across the company, gross profit was $176 million, up from $24 million a year earlier.

Rivian is still burning cash. Operating cash outflow was $758 million, which the company linked to lower deferred revenue and a build-up of inventory for the R2, and free cash flow was negative $1.12 billion. Rivian ended September with $5.5 billion of cash and investments. Its total liquidity of $6.1 billion would rise to $7.1 billion including $1 billion received in October from a 10-year loan facility provided by Volkswagen Group.

An assistant for Volkswagen

In October, Rivian brought its voice-controlled Rivian Assistant to the R2, and its over-the-air update added Gmail integration for R1 and R2 owners. The earnings presentation says Rivian has also expanded its Volkswagen joint venture, “licensing elements of our AI Voice Assistant technology as part of the broader electrical architecture and software partnership”. Rivian called that “a proof point for the extensibility of the platform we’ve built in-house”. It did not disclose the financial terms, or which Volkswagen Group vehicles will use the technology.

The licensing deal follows Scaringe’s comments this month that AI agents from companies such as Anthropic are coming to Rivian cars. On driver assistance, Rivian says take-up of its Autonomy+ package is “trending ahead of our expectations”. A limited rollout of Point to Point, a feature that follows a route from start to finish once the driver enters an address, is expected to begin later this year through the invitation-only Autonomy Early Access Program, with a general release to Autonomy+ subscribers in 2027. Rivian will give more detail at its Autonomy and AI Day on 9 December, and says the acquisition of Third Dimension AI supports its simulation work. Mind Robotics, a company spun out of Rivian, named Doug Field as president in October.

Guidance and a new finance chief

Rivian now expects to deliver 67,000 to 70,000 vehicles in 2026, up from a range of 65,000 to 70,000, based on its fourth-quarter outlook. It expects an adjusted EBITDA loss of $1.75 billion to $1.85 billion, $100 million better at the midpoint. Rivian cited higher than expected regulatory-credit revenue, the tariff refund and an expected rise in deliveries. Capital spending is now forecast at $1.4 billion to $1.5 billion, $300 million lower at the midpoint, which Rivian attributed to “timing of spend”.

In a separate filing, Rivian said its board had appointed Derek Mulvey, its vice president of finance, as interim chief financial officer from 30 October, when its current CFO leaves.

A cheaper car carrying a software story

This is TSN’s analysis. The R2 was meant to turn Rivian from a maker of expensive trucks into a volume brand, and one quarter in, it is already the company’s biggest seller. The cost figures are the more telling sign. A per-vehicle saving of more than $12,000 in a single quarter, which Rivian ties to the R2 mix and spreading fixed costs, is the kind of shift a loss-making carmaker needs. The automotive business is still losing money on each sale at the gross level, though, and some of this quarter’s help came from regulatory credits and a tariff refund that may not recur.

The steadier profit is in software. Rivian’s software and services unit made a 42% gross margin, and well over half of its revenue came from Volkswagen. Licensing the voice assistant extends that relationship from electrical architecture into the AI layer drivers actually talk to. Without terms, it is impossible to say how much the deal is worth, or whether it signals Volkswagen models running Rivian’s assistant. What it does show is Rivian presenting its in-house software as something other carmakers will pay for, not just a feature of its own vehicles.

The next test is December. Autonomy and AI Day, the first Point to Point rollout and a fourth quarter with a second R2 shift running will show whether the cost gains hold, and how much of Rivian’s AI pitch reaches customers this year.

Rivian Revenue Rises 38% to $2.16bn; R2 Is Now Its Top Seller

R2 takes the lead

Where the money came from

An assistant for Volkswagen

Guidance and a new finance chief

A cheaper car carrying a software story

Sources

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