Rivian Automotive, Inc. — FY2023 Form 10-K
Reporting period: Fiscal year ended December 31, 2023. This is an annual filing, not a standalone fourth-quarter report; the supplied filing text does not provide complete Q4 financial statements.
Business context and operating performance
Rivian designs, manufactures, and sells electric consumer vehicles (R1T and R1S), commercial vans (including Amazon’s EDV), and related services. It reported producing 57,232 vehicles and delivering 50,122 in 2023. The Normal, Illinois factory has stated installed capacity of up to 150,000 vehicles annually, but was operating significantly below full capacity.
Financial results and liquidity
| Metric | FY2022 | FY2023 |
|---|---|---|
| Revenue | $1.658 billion | $4.434 billion |
| Gross loss | $3.123 billion | $2.030 billion |
| Gross margin | -188.2% | -45.8% |
| Operating loss | $6.856 billion | $5.739 billion |
| Net loss | $6.752 billion | $5.432 billion |
| Cash used in operating activities | $5.052 billion | $4.866 billion |
- Revenue grew 167%, primarily from 147% higher deliveries, higher average selling prices, and trade-in sales. FY2023 included $73 million of regulatory-credit revenue.
- Gross loss narrowed as deliveries increased, material costs declined, and average selling prices rose. Inventory write-downs and firm-purchase-commitment losses fell to $107 million from $920 million in 2022.
- Cash and cash equivalents were $7.857 billion at year-end, with $1.511 billion of short-term investments. ABL availability was $1.1 billion; reported total liquidity was $10.468 billion. Cash and cash equivalents had been $11.568 billion at 2022 year-end.
- Net cash used in investing activities was $2.511 billion, including $1.026 billion of capital expenditures and purchases of short-term investments. Financing activities provided $3.130 billion, principally from convertible-note issuance.
- Outstanding debt principal was $4.475 billion: $1.250 billion of floating-rate notes due 2026, $1.500 billion of 4.625% convertible notes due 2029, and $1.725 billion of 3.625% convertible notes due 2030. No ABL borrowings were outstanding; $400 million of letters of credit reduced facility availability.
- Amazon revenue was $823 million, approximately 18.6% of total revenue, compared with $343 million in 2022. Amazon’s EDV order is for an initial 100,000 vehicles, subject to modification, and has no minimum purchase requirement.
Material changes and unusual items
- Production rose 135% and deliveries rose 147% year over year. The existing R1 reservation bank declined due to increased deliveries and cancellations; management said the incoming order rate needed to improve to meet delivery targets.
- FY2023 cost of revenue included $70 million in Q4 costs primarily related to suppliers and other items ahead of planned R1 technology changes and the Normal Factory shutdown in Q2 2024. Management expects the shutdown to reduce near-term production and weigh on costs, with technology changes intended to lower vehicle costs by year-end 2024.
- In Q4, Amazon limited EDV intake during the holiday delivery period, contributing to a larger gap between production and deliveries than in prior periods.
- Rivian issued $3.225 billion principal amount of green convertible notes in 2023 and paid $108 million for capped-call transactions connected to the 2030 notes. Interest expense increased to $220 million from $103 million.
- The company reported a voluntary recall affecting approximately 1,500 vehicles after identifying possible loss of defroster controls following a software update.
Outlook, risks, and contingencies
- Management expects continued operating losses and significant investment. It said cash, investments, and available ABL capacity should fund operating, working-capital, and capital needs for at least the next 12 months; future financing may still be required.
- Rivian plans to begin construction in 2024 on its Georgia facility, intended for the mid-sized platform, with R2 as the first variant and planned production in 2026. The project has a stated ultimate capacity of 400,000 vehicles annually and requires at least $5 billion of project capital expenditures by 2030 to qualify for specified incentives. Litigation and permitting/construction risks could affect timing.
- Key risks include sustained losses, production costs and underutilized capacity, demand and pricing pressure, supply constraints and single-source suppliers, battery-material volatility, dependence on Amazon, competition, elevated financing costs, and availability of EV incentives and regulatory-credit revenue.
- At December 31, 2023, Rivian had accrued approximately $80 million for probable supplier-contract and employment-related losses; it estimated reasonably possible losses up to approximately $160 million, including accrued amounts. The filing says outcomes of pending legal matters cannot be predicted with certainty.
- Prior material weaknesses in financial-reporting controls were reported as remediated as of year-end 2023. Management and the auditor gave unqualified opinions on internal control over financial reporting, although the auditor identified audit-evidence sufficiency as a critical audit matter because weaknesses had persisted during part of 2023.
Important facts for investors to verify
- Whether new orders and deliveries can sustain factory utilization and improve vehicle-level gross margins, especially after the planned Q2 2024 shutdown.
- Cash burn, capital spending, and liquidity relative to the company’s stated 12-month funding assessment and future financing needs.
- Convertible-note terms, potential conversion or cash-repurchase obligations, and the 2026 floating-rate debt burden.
- Amazon’s actual EDV purchase pace and the effects of the amended agreement permitting third-party van sales subject to limitations and fees.
- Progress, cost, permitting, and litigation status for the Georgia facility, and execution of the R2 timeline.
- Changes in warranty costs, inventory write-downs, supplier claims, and regulatory-credit revenue. The filing does not provide a clear standalone Q4 revenue, profit, or cash-flow value in the supplied text.