After two consecutive quarters of positive gross profit, Rivian Automotive’s winning streak is over, at least for now. While the electric truck maker generated $1.3 billion in revenue for the second quarter, a year-over-year increase, higher operating expenses led the company to report a gross profit loss of $206 million.
CEO RJ Scaringe and his team aren’t too downbeat about the loss, though, as it was somewhat expected and unlikely to resolve in Q3 as the company prepares to launch the R2 truck. The financial outlook was also boosted by a $1 billion investment from Volkswagen on June 30 as part of the pair’s joint venture agreement. The JV was also responsible for roughly half of Rivian’s $247 million software and service revenue.
“We saw a slight increase in overall operating expenses in the second quarter as compared to the first quarter driven by the ongoing investments we're making to develop R2,” said CFO Claire McDonough. “We expect to see increasing operating expenses in the second half of the year as we advance R2 towards production and continued the build-out of our sales and service infrastructure to support R2's volumes.”
Scaringe also touched on the external pressures the company faces, noting that “changes to EV tax credits, regulatory credits, trade regulation and tariffs” were likely to impact results as Rivian focused on “efficiently” scaling its domestic manufacturing capacity.
The output at Rivian’s Normal, Illinois plant were on the low side for Q2 as well: Rivian produced 5,979 and delivered 10,661 vehicles in the quarter. While deliveries increased by roughly 2,000 units compared to Q1, production plummeted by more than half.
McDonough attributed the steep decline to “limited production” of R1 and commercial vans due to “supply chain-related complexities partially driven by shifts in trade policy.” Fellow EV maker Lucid experienced a similar Q2 slow down connected to a magnet shortage.
Going forward, leaders affirmed the company’s delivery outlook of 40,000 to 46,000 vehicles and expect Q3 to be the peak of deliveries for 2025. However, they lowered the profit guidance to “roughly breakeven” as opposed to Q1’s projection of “modest profit.”
McDonough said the move was tied not only to tariffs, which are expected to have a net impact of “a couple thousand dollars” per unit, but also changes in regulatory credit programs, which she doesn’t expected to generate any more revenue from in 2025.
“We expect total 2025 regulatory credit sales to be approximately $160 million as compared to our prior outlook of $300 million,” she said. “As a result of the changes in our regulatory credit outlook, in addition to our second quarter results, we expect our gross profit for the full-year 2025 to be roughly breakeven.”
