Rivian has made significant progress this year when it comes to production and deliveries, breaking record after record. However, the EV startup continues to have a major problem – it's hemorrhaging cash. Fortunately, CEO RJ Scaringe claims the company knows how to fix that.
Speaking on CNBC's "Squawk Box," Scaringe said there's a "very clear" set of steps toward achieving profitability as the company's deliveries are picking up, helping lower costs and cut losses.
With an average loss of over $33,000 per vehicle, Rivian is not in an enviable financial position right now. Still, Scaringe says the loss per vehicle situation is "improving quarter to quarter," and the numbers back him up. In the second quarter, for example, Rivian posted a 50-percent improvement from the loss per vehicle of over $67,000 reported in Q1 2023.
"So we're seeing significant progress, and what we're going to see as we go forward is a very clear staircase or set of steps that get us to profitability as a business," Scaringe said. "And of course that's the objective, and the ramp of our production plant is really the foundational key for that."
Gallery: Rivian Manufacturing Plant In Normal, IL
Rivian ended the second quarter with around $9.2 billion in cash and equivalents, which the company sees as enough to fund its production ramp. It's worth noting that the EV maker has drained about half of its $18 billion cash reserve that it had at the end of 2021 after the IPO.
When asked whether Rivian needs additional funds before launching production of its next-generation R2 products, Scaringe said Rivian's focus is deploying capital efficiently, noting that he's "very comfortable with the fact that we've maintained a strong balance sheet."
Rivian's third-quarter results announced yesterday revealed a significant ramp-up progress, with 16,304 electric vehicles produced at the company's plant in Normal, Illinois – R1S, R1T, and Amazon EDV combined. That represents a 121-percent increase over a year ago and a new record. Rivian also reported a record 15,564 vehicle deliveries during the quarter, up 136 percent year-over-year.
In the first three quarters of the year, Rivian has manufactured over 39,000 EVs and delivered more than 36,000 – almost three times higher than a year ago in both cases. This puts the company on track to deliver on its annual production guidance of 52,000 units.
