Electric vehicle manufacturer Rivian (NASDAQ: RIVN) reported Q3 CY2025 results beating Wall Street’s revenue expectations, with sales up 78.3% year on year to $1.56 billion. Its non-GAAP loss of $0.65 per share was 9% above analysts’ consensus estimates.

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StockStory’s Take

Rivian’s third quarter was marked by a strong market response, which management attributed to robust sales growth and improved unit economics. CEO RJ Scaringe highlighted that the company’s progress was driven by continued momentum in its R1 and commercial van deliveries, alongside early investments in next-generation products like the R2 SUV. Management credited cost reductions in materials and operational improvements for the quarter, with CFO Claire McDonough noting "one of the best quarters ever in automotive cost of goods sold per unit delivered." The team also pointed to expanding contributions from software and services, particularly through its partnership with Volkswagen Group.

Looking ahead, Rivian’s guidance is shaped by its upcoming R2 launch, advancing autonomy initiatives, and ongoing investments in capacity and technology. Management emphasized that scaling R2 production and leveraging expanded U.S. manufacturing will be central to achieving positive gross margins. Scaringe noted, "We are very bullish on R2 and what that represents for us as a business," while McDonough reaffirmed ongoing efforts to balance R&D spend with efficiency gains. The company is also preparing for an Autonomy and AI Day to detail its technology roadmap, with a focus on developing an AI-centric approach that supports both consumer and commercial applications.

Key Insights from Management’s Remarks

Management attributed the quarter’s momentum to early R2 preparation, software and services growth, and steps taken to improve cost structure amid ongoing industry and policy uncertainty.

• R2 program progress: Management reported significant milestones in R2’s development, including completion of key manufacturing facilities and advancement in design and production validation. The R2, a midsize SUV positioned at a more accessible price point, targets the largest addressable segment in the U.S. market and is expected to drive volume growth starting in 2026.
• Software and services expansion: The software and services segment posted strong growth, supported by the Volkswagen joint venture and increased contributions from remarketing and maintenance. About half of segment revenue was driven by the Volkswagen partnership, with additional upside from ongoing joint projects like the ID.1 EV platform.
• Cost reduction and unit economics: Rivian achieved notable improvements in cost of goods sold (COGS) per vehicle, attributed to better material sourcing and operational efficiencies. Despite plant shutdowns for R2 preparation, management pointed to a positive trend in unit economics and expects further gains as R2 scales production.
• Capacity buildout: The company completed major facility expansions, including a 1.1 million square foot body shop and a 1.2 million square foot supplier park. These investments, along with a new Georgia plant under construction, will eventually support over 600,000 units of annual capacity across multiple models.
• Tariff and regulatory adaptation: Management highlighted reduced tariff headwinds due to recent policy changes and strategic sourcing decisions, which lowered per-vehicle tariff costs by several hundred dollars. Adjustments in supply chain contracts and regulatory compliance were key to mitigating future cost exposure.

Drivers of Future Performance

Rivian’s outlook is anchored by the R2 launch, continued autonomy investment, and planned efficiency gains, with management citing demand trends and policy as ongoing variables.

• R2 launch and ramp: Management expects the R2 SUV to be the primary growth engine, with a gradual production ramp in late 2026 and full utilization of expanded plant capacity in subsequent years. The R2’s lower price point and design for both U.S. and European markets are intended to broaden Rivian’s customer base.
• Autonomy and AI investment: The company is prioritizing development of an AI-driven autonomy platform, with an upcoming Autonomy and AI Day to showcase progress. Management views autonomy as a long-term differentiator, with plans to leverage real-world data from the growing vehicle fleet to enhance capabilities.
• Cost control and margin improvement: Rivian aims to continue driving operational efficiencies, particularly in manufacturing and supply chain management. Leadership expects R&D spend to normalize after the R2 launch, with CFO McDonough highlighting ongoing efforts to self-fund strategic initiatives through internal cost savings.

Catalysts in Upcoming Quarters

In future quarters, the StockStory team will be monitoring (1) progress toward production and delivery milestones for the R2 launch, (2) updates on the rollout and monetization of Rivian’s autonomy and software platforms, and (3) execution on cost reduction and manufacturing efficiency initiatives. The pace of expansion into new markets and the evolving regulatory landscape will also be key factors to watch.

Rivian currently trades at $13.25, up from $12.51 just before the earnings. Is there an opportunity in the stock?Find out in our full research report (it’s free for active Edge members).

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