Rivian hits a $1 billion milestone
Rivian has recorded its second successive quarter of gross profits, resulting in the electric automaker receiving $1 billion in funding from the Volkswagen (VW) Group as a provision of the two companies’ joint venture launched in November. By 2027, VW Group is expected to invest up to $5.8 billion in the partnership, which spawned a new company called Rivian and VW Group Technology. The deal will play a significant role in supporting Rivian’s launch of its less-expensive R2 and R3 crossover vehicle platforms, which begins with the R2’s release in early 2026.
The remaining money from the VW Group will be released in chunks over time. The electric carmaker currently sells its R1T pickup, which has a base price of $69,900, its R1S SUV that starts at $75,900, and its RCV (Rivian Commercial Van), which sells from $83,000. In addition to Q1 being Rivian’s second quarter in a row making gross profit, it was the company’s second-ever quarter achieving positive gross earnings. On Tuesday, Rivian’s founder and CEO, R.J. Scaringe, said that the company expects to receive the VW Group’s $1 billion by the end of June, InsideEVs reports.
Vehicle, software, and service sales drove Rivian’s Q1 gross profit, totaling $206 million. “This quarter, we hit our second consecutive gross profit and our highest gross profit to date at $206 million. We have continued to make significant progress on R2, including vehicle validation builds underway and our Normal, Illinois, manufacturing facility expansion on track,” Scaringe said. In March, Rivian conducted over 7,000 “electric joyrides” at Austin, Texas’s SXSW festival, which included on-road and off-road portions. During Q1, Rivian recorded more than 36,000 demo drives. Rivian also partnered with meal kit delivery company HelloFresh, which uses 70 of the automaker’s RCV commercial vans in its subsidiary Factor’s delivery fleet. Factor specializes in delivering ready-to-eat meals that only need heating, while HelloFresh focuses on meal kits with pre-portioned ingredients.
Despite a strong Q1, Rivian, formed in 2009, isn’t yet profitable. InsideEVs reports that Rivian disclosed a net loss of $541 million for Q1. In other words, Rivian is selling vehicles for less than it spends on manufacturing, but hasn’t yet achieved long-term sustainability when accounting for additional fixed costs like rent.
Rivian warns it’ll sell fewer cars than expected because of Trump’s trade war
Rivian will still suffer some setbacks from President Trump’s tariffs despite exclusively manufacturing vehicles in the U.S. and sourcing a majority of its materials, except for cells, from the U.S. or USMCA (US-Mexico-Canada Agreement) qualified outlets. Trump’s new policies resulted in Rivian lowering its number of expected vehicle deliveries for 2025 from 46,000 to 40,000 and increasing its annual capital expenditure guidance from $1.8 billion to $1.9 billion, according to Business Wire.
Final thoughts
While Rivian lowered its vehicle delivery estimate and increased its capital expenditure guidance for 2025, the electric automaker is in a favorable long-term position with $3.5 billion left to earn from its joint venture with the VW Group, the upcoming release of its more affordable R2 and R3 platforms, and a reserve of batteries it built before the implementation of Trump’s tariffs. Rivian’s CEO said the R2’s $45,000 starting price won’t change despite tariff adversity. Aside from the $3.5 billion Rivian will receive from the VW Group contingent on milestone completions, the VW Group will also invest $1.3 billion in the joint venture’s closing as consideration for IP background licenses and a 50% stake in the partnership.
