Akash Sriram
(Reuters) – Rivian (NASDAQ:) shareholders will learn details about the company’s future models and cost-cutting progress at an investor day event on Thursday, two days after the U.S. electric vehicle maker announced a $5 billion investment from Volkswagen (ETR:) .
The joint venture, which will give VW access to Rivian’s electrical architecture and software, is a “vote of confidence” in the US automaker’s prospects as it seeks to produce and sell the less expensive R2 and R3 crossovers to compete with Tesla (NASDAQ:). Best-selling Model Y SUV.
Amazon (NASDAQ:).com-backed Rivian still lost about $39,000 per vehicle sold in the first quarter, but analysts expect the company to report its first quarterly gross profit in the fourth quarter.
In April, Rivian stopped production for three weeks to implement cost-saving measures. Reuters reported last week that the company had modernized its production process, resulting in a 35% reduction in material costs for vans and savings of “similar magnitude” for other lines.
“Rivian will reveal more about the R2 and R3 models, as well as details of the deal with Volkswagen,” said Michael Schlisky, an analyst at DA Davidson. “I’m sure financial details will be discussed, but they may wait until next week to release second-quarter sales data and updated guidance.”
Demand for electric vehicles has weakened due to high borrowing costs and as buyers switch to cheaper gas-electric hybrid vehicles.
Wall Street expects Rivian to report second-quarter deliveries of 10,282 units and production of 9,369 vehicles when it reports quarterly data next week, according to analysts polled by Visible Alpha.
Even Tesla is struggling and is expected to report its first drop in annual sales this year. It has lowered prices and is offering incentives to sell more cars.
Among EV startups, Rivian is best positioned to weather weak demand thanks to VW’s investment. Some of its peers, such as Fisker (OTC:), have filed for bankruptcy.
Rivian had about $6 billion in cash and cash equivalents at the end of the March quarter.
To save money, Rivian plans to make new models at its existing plant in Illinois and has suspended investment in a previously announced plant in Georgia.
Rivian shares have lost more than a third of their value this year, even after their best one-day gain of 23% on Wednesday, partly because the company stuck to its production forecast of 57,000 units for the year, about the same as last year. year. 2023.