Rivian rides expiring EV credits to a revenue beat, and its stock moves higher

By William Gavin

The electric-vehicle maker expects its third-quarter delivery performance to be its best of the year

Rivian posted third-quarter earnings on Tuesday.

Rivian Automotive Inc. posted quarterly revenue that narrowly topped analysts' expectations, after expiring electric-vehicle tax credits helped boost sales.

The company's revenue hit $1.56 billion for the September quarter, beating the $1.51 billion expected by analysts. That also marked a 78% increase relative to a year before.

Rivian (RIVN) said its software and services division brought in $416 million in revenue, a 324% increase compared to a year earlier, primarily reflecting contributions from services that the company didn't perform in the year-prior period. About half was a result of a joint venture with Volkswagen (XE:VOW3) (XE:VOW) (VWAGY), which plans to launch a low-cost EV using Rivian's software.

Automotive revenue came in at $1.14 million, above estimates that called for $1.08 billion. That was driven by the sale of 13,201 electric trucks and SUVs for the September quarter, a number the company reported a month ago. At the time, that figure came in below analysts' expectations, but Rivian noted Tuesday that the third quarter's delivery performance will likely be the strongest of the year.

Rivian shares fell by more than 5% on Tuesday's regular trading, but rose 3% in the extended session after earnings were reported.

Sales are expected to slow across the EV industry in the current quarter, as consumers pulled ahead their purchases to take advantage of U.S. tax credits that expired in September. Rivian, which makes vehicles that start at more than $70,000, is expected to sell about 10,000 EVs next quarter, down from the more than 14,000 it delivered a year earlier.

The company maintained its full-year sales guidance of between 41,500 and 43,500 EVs, which it announced in August. Initially, Rivian had expected deliveries of between 40,000 and 46,000 units. Last year, it sold close to 52,000 vehicles.

But Rivian believes its sales performance will improve next year with the launch of the R2, a more mass-market-friendly midsize crossover that's expected to start at $45,000. The company said Tuesday that deliveries are on track to begin in the first half of next year.

"In Q3, we continued to make significant progress across our strategic priorities which includes R2 and our technology roadmap," Chief Executive RJ Scaringe said in a statement. "Over the long term, we believe the automotive industry will be fully electric, autonomous and software-defined."

Although several companies, including Amazon.com Inc.'s (AMZN) Zoox and Alphabet Inc.'s (GOOGL) (GOOG) Waymo, are spending heavily on robotaxis, Scaringe sees more of an opportunity in personally owned driverless vehicles. In that arena, Rivian will have to compete with players like Tesla Inc. (TSLA) and General Motors Co. (GM), which have plans to advance their respective technologies.

"As it stands today, more than 95% of the miles driven in the United States are in personally owned vehicles, [with] the remainder being a mix between taxi, ride share and rental," Scaringe said on a call with investors. "We think that's likely to stay mostly the same."

Rivian also announced a new robotics venture, Mind Robotics, which it spun off, that has raised a $110 million seed round to focus on "industrial" artificial intelligence. It's the second time this year Rivian has created a standalone company, having launched Also Inc. in March to develop products like electric bikes. Rivian maintains a stake in both companies.

"The potential for AI to really shift how we think about operating in the physical world is in some ways unimaginably large," said Scaringe on a call with investors, adding that Rivian wants "direct control" and influence over the development of AI robotics.

Rivian generated a positive gross profit in the September quarter, after failing to do so in the June quarter.

Tariffs continued to weigh on Rivian, which said the duties cost it just under a "couple of thousand dollars" per vehicle last quarter, according to Scaringe. But the company expects the impact to be just a few hundred dollars per vehicle in the future, partially as a result of new U.S. policy changes.

-William Gavin

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11-04-25 2011ET