Q3 Revenue and Gross Profit Exceeded Expectations! Rivian (RIVN.US) Achieved Great Results Thanks to Tax Relief, Tariff Pressure Also Eased.

Rivian Automotive (RIVN.US) delivered better-than-expected performance in the third quarter. Thanks to its joint venture project with Volkswagen (VWAGY.US) and contributions from software and services business, the company achieved positive gross profit for the second time this year. According to the financial report, the company's Q3 revenue reached $1.56 billion, a 78% increase from the previous year's $874 million, higher than the analyst average estimate of $1.5 billion. The net loss attributable to common stockholders increased slightly from $1.1 billion in the same period last year (a loss of $1.08 per share) to $1.17 billion (a loss of 96 cents per share). Excluding one-time projects such as research and development, the loss per share was 65 cents, better than the expected 72 cents. Rivian achieved a gross profit of $24 million in the third quarter, significantly better than the market's expected loss of $38.6 million. Both the automotive business and software and services business of the company exceeded expectations. "Despite the short-term uncertainty brought by trade, tariffs, and regulatory policies, we remain focused on creating long-term value," said RJ Scaringe, CEO and founder of Rivian, in a letter to shareholders on Tuesday. The operating loss for Rivian's automotive business in the third quarter was $130 million, an improvement of $249 million from the same period last year. This loss was offset by revenue of $154 million from the Volkswagen joint venture project and software and services business. Strong vehicle delivery volume also contributed to Rivian's third-quarter performance growth to some extent. The company announced last month that it delivered 13,201 vehicles in the third quarter, a 32% increase from the same period last year as U.S. consumers rushed to buy cars before the expiration of the federal tax credit policy. However, the company slightly lowered its full-year production expectation to around 42,500 vehicles due to the expected decrease in demand caused by the expiration of the $7,500 federal tax credit policy. "October may be a bit 'abnormal' as there was an overdrawn demand previously (due to tax credit policy). But in the long run, we believe the situation will return to our previous expectations," Scaringe said. Market research firm Edmunds pointed out that after a record-breaking September, U.S. electric vehicle sales slowed in October, with average prices rising to a historical high of nearly $65,021, indicating that October buyers were more driven by recognition of electric vehicles rather than pure pursuit of discounts. Rivian has maintained its previously lowered 2025 financial forecast: adjusted losses are expected to be between $2 billion and $2.25 billion, with capital expenditures of $1.8 billion to $1.9 billion. The company also confirmed that gross profit will remain roughly flat, down from the slight profit target set earlier in the year. The company also reiterated that the new R2 midsize car will start production at its sole factory in Illinois in the first half of next year. By the end of the third quarter, Rivian's total liquidity reached $7.7 billion, including nearly $7.1 billion in cash, cash equivalents, and short-term investments. Scaringe said this laid a solid foundation for the listing of the R2. Scaringe added that the company is not worried that delays from Chinese rare earth materials or semiconductor suppliers like ASML will delay the production of R2. "Given the way we have built and designed our supply chain, and the preparations we have made for product launches, we believe this will not lead to delays in R2 production," he said in an interview. "But regarding ASML, we do need to resolve the current issues as soon as possible." Last Saturday, China announced it would consider partial exemptions for ASML semiconductor chip exports. Previously, exports had been suspended due to U.S.-China trade negotiations and the Dutch government taking over the company's operations in the Netherlands. Like Rivian, the entire electric vehicle industry is facing several challenges: tariffs leading to increased costs, slowing forecasts for electric vehicle sales, challenges in new product development, and changes in regulatory policies (including the termination of federal consumer incentives) affecting sales and profits negatively. Rivian lowered its expectations for new vehicle production due to tariffs on Tuesday from "thousands of dollars per vehicle" to hundreds of dollars. This was due to the Trump administration extending the exemption policy last month for specific vehicle components manufactured in the United States. Scaringe told investors on the earnings call, "More favorable tariff costs are significant for us." Finally, Rivian also announced that its industrial startup Siasun Robot & Automation, Mind Robotics, was established this month and received $110 million in external financing. On Tuesday, Rivian's stock price fell by 5.23% to $12.50 per share, but rose more than 3% after hours. The stock has fallen by about 6% cumulatively this year.