Rivian Automotive, Inc. — Q1 2024 Form 10-Q
Reporting period: Three months ended March 31, 2024; unaudited U.S. GAAP financial statements. Amounts are in U.S. dollars; financial statement figures are in millions unless noted.
Business context and operating results
Rivian designs, manufactures and sells electric vehicles, accessories and related services. It produced 13,980 vehicles and delivered 13,588 in the quarter. The R1T and R1S serve consumer customers; the EDV is its commercial van, developed with Amazon.
| Metric | Q1 2024 | Q1 2023 | Change |
|---|---|---|---|
| Revenue | $1,204 | $661 | +82% |
| Cost of revenue | $1,731 | $1,196 | +45% |
| Gross loss / margin | $(527) / (43.8%) | $(535) / (80.9%) | Loss narrowed $8 |
| Operating expenses | $957 | $898 | +7% |
| Operating loss | $(1,484) | $(1,433) | Loss widened $51 |
| Net loss | $(1,446) | $(1,349) | Loss widened $97 |
| Net loss per share | $(1.48) | $(1.45) | |
| Production / deliveries | 13,980 / 13,588 | 9,395 / 7,946 | +49% / +71% |
Revenue growth reflected higher deliveries, leasing activity, increased average selling prices and vehicle trade-in sales. Management attributed the narrower gross loss to higher production and deliveries, lower material costs and higher selling prices. The quarter’s cost of revenue included $150 of inventory and firm-purchase-commitment charges, down from $229 a year earlier.
Cash flow, liquidity and debt
- Cash and cash equivalents were $5,979 at March 31, 2024, down from $7,857 at year-end 2023. Short-term investments were $1,879, up from $1,511. Combined cash and investments were $7,858.
- Management reported total liquidity of $9,053, including $1,195 of availability under the ABL facility. There were no ABL borrowings; $305 of letters of credit were outstanding. Rivian reported compliance with ABL covenants.
- Operating cash use was $1,269, compared with $1,521 in Q1 2023. Investing cash use was $606, including $254 of capital expenditures and net purchases of short-term investments. Financing cash use was $2; the prior-year period included $1,485 of convertible-note proceeds.
- Long-term debt carrying value was $4,433; principal outstanding was $4,475. Debt comprises $1,250 of 2026 secured floating-rate notes, $1,500 of 2029 green convertible notes and $1,725 of 2030 green convertible notes. The 2026 Notes’ stated rate was 11.5% at quarter-end. Interest expense rose to $75 from $38.
- Total assets were $15,734, total liabilities $7,665 and stockholders’ equity $8,069. Inventory was $2,797.
Material changes, outlook and commentary
- R&D expense declined 7% to $461, while SG&A rose 23% to $496, primarily reflecting sales and service staffing, depreciation and go-to-market and corporate costs.
- Q1 cost of revenue included $171 of costs related to efficiency initiatives, primarily supplier liabilities and accelerated depreciation ahead of the Normal Factory retooling. Rivian said the April 2024 shutdown and lower Q2 production are expected to pressure near-term cost of revenue and vehicle output; it expects the upgrades to lower material and conversion costs as it exits 2024.
- Rivian shifted initial R2 production to its Normal, Illinois factory, targeting production start in 2026 and planned annual capacity of approximately 215,000 units. Construction of the planned Georgia factory was temporarily paused to focus on the Normal expansion.
- The filing gives no numerical 2024 delivery target. Management said current incoming R1 orders need to improve to meet delivery targets and expected 2024 deliveries to come from both the existing order bank and new orders. Rivian expects ongoing losses and significant investment; it anticipates existing cash, investments and ABL availability will cover needs for at least 12 months, while noting future investment may require additional debt or equity financing.
- After quarter-end, Rivian entered an Illinois incentive agreement potentially worth up to $827, subject to commitments including at least $1.5 billion of capital expenditures within 60 months, specified job creation and retention, and operating the expanded project for at least 15 years once placed in service.
Risks, contingencies and unusual items
- Rivian recorded approximately $190 of probable losses for legal and supplier matters, up from approximately $80 at year-end. It said additional losses could reach approximately $270, or about $80 above the accrued amount; most matters were expected to be resolved within 12 months.
- Amazon and affiliates contributed $338 of Q1 revenue (about 28% of total), primarily EDV sales. The EDV agreement has no minimum purchase requirement, and Amazon may modify or delay purchases. Separately, Chase Bank accounted for approximately 23% of revenue, according to the filing.
- Key business risks include continued losses and cash burn, demand and order-bank uncertainty, EV price competition and interest rates, dependence on single- or limited-source suppliers, production and retooling execution, warranty and recall exposure, and the need for additional capital. Rivian cautions that supplier constraints may limit the near-term Normal Factory production ramp.
- The filing describes pending litigation, including Tesla trade-secret claims, IPO-related stockholder suits, derivative suits and disputes concerning the planned Georgia facility. Management said it did not believe pending matters were likely to have a material adverse effect, while warning outcomes remain uncertain.
Important facts for investors to verify
- Whether R1 incoming orders, deliveries and pricing are sufficient to support the company’s undisclosed delivery targets and manage inventory.
- Whether the Normal Factory retooling delivers the expected cost reductions, and the extent and duration of Q2 production and margin pressure.
- Quarterly cash burn, capital spending, liquidity and financing needs relative to management’s stated 12-month coverage expectation.
- Progress on the R2 launch and Normal Factory expansion, including supply constraints and the conditions attached to Illinois incentives.
- Changes in Amazon and Chase revenue concentration, supplier-related liabilities and the potential additional legal and supplier losses.
- Debt service costs, particularly the high-rate 2026 Notes, and any effect of convertible-note terms on future cash needs or share dilution.