Rivian Automotive Inc ($RIVN) Q4 2025 Earnings Call

Thanks, Jip. Good afternoon, everyone, and thanks for joining us for today's call. 2025 was a year focused on execution at Rivian as we laid the foundations for scaling our business. Our team progressed the development of our technology roadmap in R2 while simultaneously driving continued improvement in our customer experience and our path to profitability. In founding Rivian, I wanted to demonstrate how a clean sheet technology-focused vehicle could eliminate long-accepted compromises and provide consumers choice. Our goal with the launch of our R1 products was to establish the Rivian brand by delivering a combination of efficiency, on-road performance, off-road capability, functional utility, and product refinement that simply didn't exist in the market. The first vehicles established Rivian as a brand that enables people to do the things they love, enable adventure, as well as transcend different segments, form factors, use cases, and geographies. In the fourth quarter of 2025, the R1S was the bestselling premium electric vehicle priced above $70,000 in California, New York, New Jersey, Oregon, Virginia, and Washington DC. And it was the bestselling SUV, EV or none, over $70,000 in the state of California. Now, I'm excited that we are months away from starting customer deliveries of R2, our first mass market vehicle. One of the things that's often overlooked around EVs is that there is a surprising lack of high-quality choices. At prices around or below $50,000 for a new vehicle in the United States, there are only a few compelling EV choices as compared to hundreds of internal combustion or hybrid options that have a wide range of form factors and design aesthetics. From the lens of the customer, if you want to buy a midsize SUV with robust technology, autonomous capabilities, and a reasonable price point, you've really only got one choice, and it's been that way for a long time. This is a reflection of a market that's being underserved. We believe R2 is going to change that. R2 is an extension of the experience we delivered in R1 with design elements and performance to inspire adventure, but in a smaller form factor, and importantly, at an attractive, lower price point. Launch Edition R2 variants will be well equipped with a dual motor all-wheel drive setup that provides more than 650 horsepower and over 300 miles of range. In mid January, I was thrilled to drive our first R2 manufacturing validation build off the production line in our factory in Illinois. As you've seen from the extremely positive media reviews of our pre-production vehicles over the last few days, R2 is an exceptional vehicle and I believe will be a game changer for our customers, our company, and the industry. One reviewer said, "The R2 is an exceptional vehicle, quite possibly the best all-around electric vehicle I've ever driven." We look forward to getting investors and more media in R2 for demo drives so they can experience the capabilities of the vehicle. We plan to provide additional product pricing and lineup details on March 12th. Turning to our AI and autonomy day, it was great to see so many of our stakeholders at our offices in Palo Alto this past December. We were excited to showcase our innovation across our vertically integrated hardware, software, and autonomy teams and unveil RAP 1. Developing our own chip was driven by the need for velocity, performance, and cost efficiency and is a key development of our autonomy platform. Near the end of last year, we released universal hands-free, which expanded our advanced assisted driving capabilities for Gen 2 customers to more than 3.5 million miles of roads across North America. Since its release, customer utilization of our autonomy features has doubled. Rivian is also making significant progress in making software and AI core to everything we do. From the way we design, develop, manufacture, and service our cars to the way our customers interact with their vehicle. This is enabled by the Rivian unified intelligence, a common AI foundation that understands our products and operations as one continuous system and personalizes the experience for our customers. It also defines how applications will integrate in our vehicles in the future. We were excited to demo the Rivian assistant at AI and Autonomy Day and expect to launch this feature early this year. Finally, we continue to see the extensibility of our electrical hardware and software platform with the work happening in our joint venture with Volkswagen Group. I'm very pleased that we have delivered vehicles for winter testing for multiple Volkswagen Group brands 13 months after the formation of the joint venture. In closing, 2025 was a foundational year for scaling Rivian, and I could not be more excited for the year ahead. I believe 2026 will be an inflection point for our business. As an American automotive technology company that develops and manufactures incredible electric vehicles, we believe that the future of the automotive industry will be fully electric, autonomous, and AI defined. I've never been more confident in the opportunity ahead for Rivian than I am today. I firmly believe Rivian's technology along with our direct customer ownership experience position our company to build a category defining brand with a strong mass market product portfolio for the US and global markets. With that, I'll pass the call over to Claire to discuss our financial results.

Hi Dan, thanks for the question. With regards to R2, I've had the chance to spend a lot of time in it over the last several months and really over the last month or so driving our validation vehicles that are produced in our plant off of our manufacturing validation build. The vehicle is just absolutely incredible. The combination of features, the packaging, the vehicle dynamics, the steering feel, we're incredibly bullish on. And as I've talked about a lot in the past, we ultimately think the market is really hungry for some choice in this segment. As I said in my opening remarks, the lack of choice that exists in and around this $50,000 price point has led to very high market share concentration of one vehicle. So this is the first time there's going to be a real alternative. This is important for folks that are in internal combustion vehicles today, mid-size SUVs, and looking for something that fits their form factor needs, their aesthetic needs, their packaging needs. We're very focused on putting this together. With that said, we have a lot of confidence in the overall demand profile. And of course, that's why we've leaned so much into the program and into what we're about to launch.

With new technology, there's always something new coming, especially for us as a business given our enormous focus on developing new technology. Recognizing that there are a lot of customers that are just waiting to get a great midsize SUV, given the enormous backlog of demand we have as well, the short period where we'll be launching with essentially an upgraded version of our Gen 2 autonomy stack before our Gen 3 autonomy stack comes, we don't think that's going to be a significant issue. For those that want to wait for it, they certainly can. And for others that are excited to get into the vehicles in a shorter time frame, they'll be available prior to that.

As I said in opening remarks, in the first 13 months of establishing the joint venture with Volkswagen, we've started winter testing on multiple VW group products. The true demonstration and existence proof of the scalability of our technology in terms of being able to work across multiple form factors, different price points, different brands, and importantly deproductized into a platform that can go across a large existing OEM, this Volkswagen relationship is really important for that. That's our focus. But of course we have great relationships with a broad spectrum of other manufacturers. I've said this many times, but I deeply believe that over the course of the next several years, every manufacturer has to make the decision as to whether or not to get to a software defined vehicle, whether they're going to develop it themselves, secure it from a third-party source of which we will be the only demonstrated example of having scaled this technology outside of our own products, or accept that without that technology you will lose market share. We're quite bullish on the potential for this technology platform and we see it as an important part of our portfolio going forward.

Thanks, Ben. I spoke a little bit about this in the previous response, but we've had a few technical difficulties here. So at risk of repeating myself, I'll just cover a few things that I said earlier. The Volkswagen relationship continues to progress. We're now 13 months since the joint venture started. We've started winter testing on several different Volkswagen group products and of course we're working towards the first launch of those vehicles in 2027. The relationship has been very strong. We had a great session coincidentally last week with a broad set of the Volkswagen group leadership team. Seeing this be used and deployed across not just vehicles of similar price point to Rivian's vehicles but across a wide band of price points and across a range of form factors is really important and it really demonstrates the scalability of the technology. Ultimately, we're going to continue working towards delivering multiple Volkswagen group products, but this does open the door for opportunity with other manufacturers as well.

Thanks, George. The process of ramping a vehicle is something we've spent a lot of time talking about in this forum, but certainly internally, we're really putting a lot of effort into making sure we have a very smooth production launch and then associated ramp. We often think of the plant as being the bottleneck for the ramp, but in fact, we have to remember there are hundreds of other companies that are providing components into Rivian that ultimately contribute and are a key part of the ramp. Ramping our supply base is something that we're very focused on and planning around. You can only ramp as fast as your slowest part, so to speak. With that said, as you heard earlier, we're starting with a single shift. We're bringing on a second shift that'll be happening near the end of the year. And then in 2027, we'll be adding our third shift. This has been very methodically laid out to make sure that we're ramping consistently and evenly across the supply chain. There's going to be a large demand backlog that we're working through and a tremendous amount of excitement for the R2 vehicle. As more reviews come out about it and more people get exposure to it, we expect that to continue to expand and grow. It's worth noting some of the pre-production reviews that came out last week, the feedback has been universally super positive. We're acutely aware of that, but we are working very carefully to coordinate the ramp and the growth of output with our supply base.

Yes. On March 12th, we'll be providing the full picture around the overall portfolio of products that'll exist for R2. That'll include the launch configuration which, as I've said, is a dual motor performance variant with a premium trim. The different combinations of trim, powertrain performance, and battery size are what we'll be describing in detail on the 12th. Along with that, we'll allow customers to start configuring their vehicles and start getting ready to be making deliveries later in Q2. I think it's important here as you think about the overall demand profile for the vehicle, we've put a lot of time into thinking about the different accommodations and recognizing what different folks are going to want, having the benefit of lots of conversations and also the benefit of seeing what are the most popular trims and configurations in R1. We're really excited to go through that, but it's something we want to present as the full meal as opposed to giving little bits and pieces. So other than talking about the launch configuration, the rest of the configuration is going to be something we talk about in detail in about a month.

Well, thanks Chris. One of the amazing things about the R2 program is there's an enormous backlog. But that does create a challenge for us with making sure how do we select who receives their vehicles first and having a process around that. Opening up the configuration process allows us to start taking this demand backlog and organizing around when we make deliveries and who gets their vehicles first. It's not as if you could press a button and instantly have thousands and thousands of vehicles available. We start producing, we are ramping production, but the demand will outpace our ability to produce. That process allows us to organize in a thoughtful way and learning a lot from some of the past launches we've had. How do we prioritize and how do we sequence deliveries to our broad base of customers?

We're really excited to talk about this. This is a huge effort within the business. Autonomy and AI Day was of course focused on all the work that we're doing here. Our universal hands-free is really the first step in a whole series of steps that expand the capability. Universal hands-free expanded the number of miles where you can drive with hands off the wheel but eyes on the road to around three and a half million miles, essentially any road with marked lanes. Later this year, we'll be unlocking the ability for the vehicle to drive point-to-point. You put your address into the vehicle and the vehicle navigates to that address. The next steps ultimately are driving towards what we think of as personal level four. Between point-to-point and personal level four, we'll have hands off, eyes off, so you'll be able to take your eyes off the road and do other things, starting first on the highway and then expanding from the highway. Following that, we'll have our first level four applications within a geo-fenced area to start, but ultimately expanding over time. Our view and really strong conviction is that over the course of the remainder of this decade, we're going to see autonomy go from something that today with hands-off capabilities certainly is a nice feature to have, but as we start to move to hands off and eyes off and then ultimately to level four where the vehicle can operate itself entirely on its own including driving empty, it really creates a whole new customer experience. We think it becomes a critical part of the purchase decision and this is going to drive significant change in how we think about the business model. It's going to drive significant change in how consumers think about what vehicles they want to purchase.

In terms of retrofit, this isn't something that's contemplated or planned. Certainly there'll continue to be over-the-air updates for our Gen 2 vehicles, our R1 Gen 2 vehicles and our launch R2 vehicles, but in terms of hardware upgrades, those are not planned. The hardware upgrades that we've talked about in the past, we talked about at our autonomy and AI day, these are going to be on vehicles in the early part of 2027. Certainly very excited about those. But the capabilities and even the demo that we had at our autonomy AI day which was a point-to-point demo, that demo was on a Gen 2 of our R1 vehicles. So that will be available on any Gen 2 R1 vehicle as well as the R2 vehicles we'll be launching with.

I think the important thing to keep in mind on our upgraded architecture which is coming in 2027 is that it has a few really important purposes. One of course is it raises the ceiling on what's possible. So it grows the opportunity to add even more capability beyond point-to-point, but it also serves as an even more enhanced part of our data flywheel where we have enhanced cameras, higher level of inference in vehicle, but importantly we add LIDAR as you referenced which turns essentially every vehicle into part of our ground troop fleet which is really helpful for training our end-to-end model. The way that the model continues to improve is we're benefiting from the thousands and thousands of drivers that are on the road and the vehicles that are on the road pulling interesting and unique events back off the vehicles and allowing us to feed that into the overall training loop that we have for our what we call our large driving model.

This is for R2.

Yes.

The Volkswagen fleet and what ultimately we're delivering to Volkswagen from a technology platform doesn't include our autonomy platform. So it's our embedded software platform, our topology of ECUs, including our zonal architecture, but it doesn't include our self-driving architecture.

I'll answer it really broadly. When we think about our self-driving and autonomy efforts, this is an enormous focus for the business and represents our most significant area of capital investment from an R&D point of view. When we look at this through the lens of the next several years, we do believe that as we continue to demonstrate progress and work towards that growing capability set that I talked about before, ultimately culminating in level four, this is a platform that certainly beyond Rivian has applications. We do envision a world in which this becomes something that we can monetize through a few different ways. We can monetize it through increased market share and growing number of vehicle sales. We can of course do that through new and unique business models and new ways of thinking about consuming transportation. And we can do that through selling and providing the technology to other manufacturers. Now specifically to our RAP one processor as well as its future variants, we do see applications for vision-based robotics well beyond the vehicle. Of course, the vehicle is a great near-term vision-based robot, but even within Mind Robotics, which is a new company that we created, that is also an example of a great customer application, a great use case application for our RAP one processor.

Well, thanks Toby. We've found great working partnerships with our battery cell suppliers and have taken a very active role in securing and sourcing some of the upstream precursor materials. You called out lithium, that's a really great example of an area that we from a sourcing point of view spend a lot of time on. Being able to work with these key battery partners and leverage the investments they've made in production capacity and in their own cell construction and cell design has been really helpful for us in terms of efficiently deploying capital.

Yes, James, we can hear you.

The Tesla Model S and Model X, which as you said will stop production at least what's been said is next quarter. The Model S was a really important product from an electrification point of view and was one of the first more at scale products to show customers how exciting electrification can be. As that leaves the market along with the Model X, it does create an opportunity. I've talked about this a lot in the context of R2, the lack of choice, but this also is true in the case of R1. R1, as it stands, our R1S is, as I called out in my opening remarks, an enormously successful product in this premium price category. It's the bestselling premium SUV, electric or non-electric, in the state of California. It's the bestselling premium electric SUV in the United States and the bestselling premium electric vehicle SUV or non-SUV in a number of states across the US. With even less choice now in that price category, it does represent an opportunity for us. But I just say very broadly that the overall lack of choice, and this is really true in the price category of R2, we think is an enormous opportunity for us to capture market share and of course provide something really exciting to customers.

Well, thanks everybody for joining the call and we apologize for some of the technical difficulties that we had at the start. But hopefully a takeaway from this is just how excited we are about R2. I, as I said, have had a chance to spend a lot of time in the car in a variety of ways, whether it's taking my kids to sports games or loading up the back with gear. It is just such an incredible embodiment of the Rivian brand and captures so much of the essence of what makes R1 a special vehicle, but at a price point that as we said starts at $45,000 and will allow a much larger number of customers to access the vehicle. As we think about the next couple of months, we as a company remain incredibly focused on the launch ramp for this vehicle along with the continued development of the technology we're building, both on the software side which we talked a bit about but certainly on our autonomy side. With that, thanks again for joining the call and we're looking forward to a lot of folks being able to experience the R2 themselves.