In explaining its second-quarter results, Rivian said the company made significant progress in increasing cost efficiencies, product improvement, differentiated technology and creating new business opportunities.

“We reduced complexity and lowered the cost of the vehicle body by placing a strong emphasis on removing parts, processes and steps,” said RJ Scaringe, Rivian’s founder and CEO, during the second-quarter earnings release webcast. “These changes reduced nearly 1,500 joints and contributed to an expected 30% improvement in the R1 production rate. The new R1 vehicles feature hundreds of design, engineering and performance improvements, the most significant of which are an all-new zone architecture, a new compute and autonomy platform, new in-house drive units and a redesigned suspension system.

“The launch of the second-generation R1 platform, combined with commercial cost reductions and raw material tailwinds, should enable significant material cost reductions… We are focused on reducing R1 costs beyond 2024 through lower material and switching costs… As we continue to source materials for R2, we see opportunities to further reduce R1 costs through additional supplier cost reductions.”

According to Electrek, Rivian has implemented “drastic cost-saving measures,” including manufacturing improvements and supplier contracts.

“Over 100 steps in the battery manufacturing process, 50 components in body construction and 500 parts in design have been eliminated,” the article states. “With its new in-house power units, Rivian is reducing costs by 47% compared to its Origin Quad engine. Rivian expects this trend to continue as it introduces new technologies.”

As of press time, Rivian did not respond to Repairer Driven News’ question about how the changes might impact collision repair.

During Rivian’s first-quarter earnings call, Scaringe said closing the Normal, Illinois, plant for retooling would increase production rates by 30% and allow for cost-focused vehicle changes. The retooling was completed in the second quarter.

“These are new suppliers with updated or cost-optimized part designs, so areas of the vehicle where we have consolidated parts or eliminated parts,” he said. “Even with this transition, there are areas of the body structure where the cost reduction was well over 50%, for example. And that’s through part consolidation or part elimination or redesigning a part using different materials or different processes.”

Scaringe said during the Q2 webcast that Rivian needs to “aggressively pursue profitability” to realize the full potential of its vision.

“The fundamental levers underlying this objective are the recent transition to our second generation R1 and the subsequent launch of our mid-range platform… I am encouraged by the progress in the production of second generation R1 vehicles as well as the development of R2, which we expect to launch in the first half of 2026.”

Rivian reported negative gross profit of $451 million in the second quarter, compared to negative $412 million in the second quarter of 2023.

Cost of sales for the second quarter of 2024 included $59 million, or approximately $4,278 per vehicle delivered during the quarter. These are costs that we do not expect to be part of our long-term cost structure, Rivian said.

Rivian CFO Claire McDonough said the OEM is reiterating its 2024 production forecast of 57,000 units, its delivery expectations of low single-digit growth compared to 2023, its EBITDA forecast of negative $2.7 billion and its capital expenditures of $1.2 billion.

“In the second quarter, we improved our cash flow from operations to 41% compared to the first quarter of 2024,” she said. “This improvement reflects our continued focus on costs and greater working capital efficiency across the company.”

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Featured image: Workers at Rivian’s manufacturing plant in Normal, Illinois. (Provided by Rivian)

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