Q4 2025 Rivian Automotive Inc Earnings Call

February 12, 2026

Twenty-five earnings call.

Today, I'm joined by RJ syringe, our CEO and founder Claire Mcdonagh, our Chief Financial Officer, and Javier Gorilla, Our Chief operations Officer.

Before we begin matters discussed on this call, including comments and responses to questions reflect managements views as of today. We will also be making statements related to our business operations and financial performance that may be considered forward looking statements under federal Securities law.

Such statements involve risks and uncertainties that could cause actual results to differ materially. These.

These risks and uncertainties are described in our SEC filings and the shareholder letter we filed with the SEC.

During this call we will discuss both GAAP and non-GAAP financial measures a reconciliation of historical non-GAAP to GAAP financial measures is provided in our shareholder letter.

Just before the earnings call, we published and filed our shareholder letter, which includes an overview of our progress over the recent months.

I encourage you to read it for additional details around some of the items, we will cover on today's call.

Speaker #1: Morning's call. Today I'm joined by RJ Scaringe, our CEO and founder, Claire McDonough, our Chief Financial Officer, and Javier Varela, our Chief Operations Officer.

Following our prepared remarks, we'll be taking questions from sell side analysts in the interest of keeping the call to one hour. We would ask these analysts to limit any follow on questions to one with that I'll turn the call over to RJ.

Speaker #1: Before we begin, matters discussed on this call, including comments and responses to questions, reflect management's views as of today. We will also be making statements related to our business, operations, and financial performance that may be considered forward-looking statements under federal securities law.

Thanks, Jeff Good afternoon, everyone and thanks for joining us for today's call.

2025 was a year focused on execution at rhythm as we laid the foundations for scaling our business.

Our team progressed, the development of our technology roadmap and our two while simultaneously driving continued improvement in our customer experience and our path to profitability.

Speaker #1: Such statements involve risks and uncertainties that could cause actual results to differ materially. These risks and uncertainties are described in our SEC filings and the shareholder letter we filed with the SEC.

In founding <unk> I wanted to demonstrate how our clean sheet technology focused vehicle could eliminate long accepted compromises and provide consumers choice.

Speaker #1: During this call, we will discuss both GAAP and non-GAAP financial measures. A reconciliation of historical non-GAAP to GAAP financial measures is provided in our shareholder letter.

Our goal with the launch of our <unk> products was to establish the <unk> brand by delivering a combination of efficiency on road performance offered capability functional utility and product refinement that simply didn't exist in the market.

Speaker #1: Just before the earnings call, we published and filed our shareholder letter, which includes an overview of our progress over the recent months. I encourage you to read it for additional details around some of the items we will cover on today's call.

The first vehicles established <unk> as a brand that enables people to do the things they love enable adventure as well as transcend different segments form factors use cases and geographies in the fourth quarter of 2025. The rns was the best selling Premier electric vehicle priced above $70000 in California, New York New Jersey.

Speaker #1: Following our prepared remarks, we will be taking questions from sell-side analysts. In the interest of keeping the call to one hour, we would ask these analysts to limit any follow-on questions to one.

Speaker #1: With that, I'll turn the call over to RJ.

Oregon, Virginia, and Washington D C and.

Speaker #2: Thanks, Jip. Good afternoon, everyone, and thanks for joining us for today's call. 2025 was a year focused on execution at Rivian, as we laid the foundations for scaling our business.

And it was the best selling SUV EV or non EV over $70000 in the state of California.

Now I'm excited that we are months away from starting customer deliveries of our two our first mass market vehicle one of the things that's often overlooked or on Evs is that there is a surprising lack of high quality choices.

Speaker #2: Our team progressed the development of our technology roadmap in Q2, while simultaneously driving continued improvement in our customer experience and our path to profitability.

Speaker #2: In founding Rivian, I wanted to demonstrate how a clean sheet technology-focused vehicle could eliminate long-accepted compromises and provide consumers choice. Our goal with the launch of our R1 products was to establish the Rivian brand by delivering a combination of efficiency, on-road performance, off-road capability, functional utility, and product refinement that simply didn't exist in the market.

Prices around or below $50000 for new vehicle in the United States. There are only a few compelling easy choices as compared to one hundreds of internal combustion or hybrid options that have a wide range of form factors and design aesthetics from the lens of the customer.

You want to buy a mid sized SUV with robust technology autonomous capabilities and a reasonable price point.

Speaker #2: The first vehicles established Rivian as a brand that enables people to do the things they love. Enable adventure, as well as transcend different segments, form factors, use cases, and geographies.

You've really only got one choice and it's been that way for a long time.

This is a reflection of a market that's being underserved. We believe our two is going to change that or to as an extension of the experience. We delivered in our one with design elements and performance to inspire adventure, but in a smaller form factor and importantly on an attractive lower price point.

Speaker #2: In the fourth quarter of 2025, the R1S was the best-selling premium electric vehicle priced above $70,000 in California, New York, New Jersey, Oregon, Virginia, and Washington, DC.

Launch addition, Archie variance will be well equipped with a dual motor all wheel drive setup that provides more than 650 horsepower and over 300 miles of range.

Speaker #2: And it was the best-selling SUV—EV or non-EV—over $70,000 in the state of California. Now, I'm excited that we are months away from starting customer deliveries of R2, our first mass-market vehicle.

In mid January I was thrilled to drive our first our two manufacturing validation build off the production line in our factory in Illinois.

Speaker #2: One of the things that's often overlooked around EVs is that there is a surprising lack of high-quality choices. At prices around or below $50,000 for a few compelling EV choices as compared to hundreds of internal combustion or hybrid options that have a wide range of form factors and design aesthetics.

As you've seen from the extremely positive media reviews of our preproduction vehicles over the last few days <unk>.

<unk> is an exceptional vehicle and I believe will be a game changer for our customers our company and the industry.

One reviewer said the <unk> is an exceptional vehicle quite possibly the best all around electric vehicle it ever driven.

Speaker #2: From the lens of the customer, if you want to buy a midsize SUV with robust technology, autonomous capabilities, and a reasonable price point, you've really only got one choice.

We look forward to getting investors and more media and our two for demo drive so they can experience the capabilities of the vehicle.

We plan to provide additional product pricing and lineup details on March 12.

Speaker #2: And it's been that way for a long time. This is a reflection of a market that's being underserved. We believe R2 is going to change that.

Turning to our AI and autonomy day, it was great to see so many of our stakeholders at our offices in Palo Alto This past December.

Speaker #2: R2 is an extension of the experience we delivered in R1 with design elements and performance to inspire adventure, but in a smaller form factor and, importantly, at an attractive lower price point.

We were excited to showcase our innovation across our vertical integrated hardware software and autonomy teams and unveil wrap one.

Developing our own chip was driven by the need for velocity performance and cost efficiency and as a key development of our economy platform near the end of last year, We released universal hands free which expanded our advanced assisted driving capabilities for Gen. Two customers to more than $3 5 million miles of roads across North America.

Speaker #2: Launch edition R2 variants will be well-equipped with a dual-motor all-wheel-drive setup that provides more than 650 horsepower and over 300 miles of range. In mid-January, I was thrilled to drive our first R2 manufacturing validation build off the production line in our factory in Illinois.

Speaker #2: As you've seen from the extremely positive media reviews of our pre-production vehicles over the last few days, R2 is an exceptional vehicle, and I believe will be a game changer for our customers, our company, and the industry.

Since its release customer utilization of our autonomy features has doubled Caribbean is also making significant progress in making software and AI core to everything we do from the way we design develop manufacture and service our cars to the way our customers interact with their vehicle.

Speaker #2: One reviewer said, "The R2 is an exceptional vehicle. Quite possibly the best all-around electric vehicle I've ever driven." We look forward to getting investors and more media in R2 for demo drives so they can experience the capabilities of the vehicle.

This is enabled by the <unk> unified intelligence and common AI foundation that understands our products and operations as one continuous system and personalize the experience for our customers.

Speaker #2: We plan to provide additional product, pricing, and lineup details on March 12th. Turning to our AI and autonomy day, it was great to see so many of our stakeholders at our offices in Palo Alto this past December.

It also defines how applications will integrate in our vehicles in the future.

We were excited to demo the review and assistant AI and autonomy day and expect to launch. This feature early this year.

Speaker #2: We were excited to showcase our innovation across our vertically integrated hardware, software, and autonomy teams, and unveil RAP1. Developing our own chip was driven by the need for velocity, performance, and cost efficiency, and is a key development of our autonomy platform.

Finally, we continue to see the extensibility of our electrical hardware and software platform with the work happening in our joint venture with Volkswagen Group.

I am very pleased that we have delivered vehicles for winter testing for multiple Volkswagen group brands.

Speaker #2: Near the end of last year, we released universal hands-free, which expanded our advanced assisted driving capabilities for Gen2 customers to more than 3.5 million miles of roads across North America.

13 months after the formation of the joint venture.

In closing 2025 was a foundational year for scaling Vivian and I could not be more excited for the year ahead.

Speaker #2: Since its release, customer utilization of our autonomy features has doubled. Rivian is also making significant progress in making software and AI core to everything we do.

I believe 2026 will be an inflection point for our business as an American automotive technology company that develops and manufactures incredible electric vehicles, we believe that the future of the automotive industry will be fully electric autonomous NII defined.

Speaker #2: From the way we design, develop, manufacture, and service our cars, to the way our customers interact with their vehicle, this has been enabled by the Rivian Unified Intelligence—a common AI foundation that understands our products and operations as one continuous system and personalizes the experience for our customers.

I've never been more confident in the opportunity ahead Peruvian than I am today.

I firmly believe <unk> technology, along with our direct to customer ownership experience.

<unk> our company to build a category defining brand with a strong mass market product portfolio for the U S and global markets with that I'll pass the call over to Claire to discuss our financial results.

Speaker #2: It also defines how applications will integrate in our vehicles in the future. We were excited to demo the Rivian Assistant at AI and Autonomy Day and expect to launch this feature early this year.

Thanks, RJ and good afternoon, everyone as our data discussed we believe 2026 will be an important area as we scale our business launching Archie will extend our brand to the mass market and we expect our Q will drive meaningful automotive segment growth and profitability over time.

Speaker #2: Finally, we continue to see the extensibility of our electrical hardware and software platform with the work happening in our joint venture with Volkswagen Group.

Speaker #2: I'm very pleased that we have delivered vehicles for winter testing for multiple Volkswagen Group brands, 13 months after the formation of the joint venture.

Now before I dive into the quarter era, a few key financial metrics that I would like to highlight for 2025.

Speaker #2: In closing, 2025 was a foundational year for scaling Rivian, and I could not be more excited for the year ahead. I believe 2026 will be an inflection point for our business.

First on a full year over year basis, we delivered nearly $5500 of improvement in average sales price due to the introduction of our second generation <unk> Quad models, a higher mix of <unk> units and increase based prices for the 2026 model year.

Speaker #2: As an American, automotive technology company, that develops and manufactures incredible electric vehicles, we believe that the future of the automotive industry will be fully electric, autonomous, and AI-defined.

Speaker #2: I've never been more confident in the opportunity ahead for Rivian than I am today. I firmly believe Rivian's technology, along with our direct-to-customer ownership experience, positions our company to build a category-defining brand with a strong mass-market product portfolio for the U.S. and global markets.

Second on a full year over year basis, we achieved an approximately 9500 dollar improvement in automotive cost of goods sold per unit due to material cost reductions and operational efficiencies.

Finally, the improvement in unit economics in our automotive segment when combined with our strong software and services performance resulted in greater than $1 $3 billion of improvement in full year gross profit, making 2025, our first full year of positive gross profit.

Speaker #2: With that, I'll pass the call over to Claire to discuss our financial results.

Speaker #1: Thanks, RJ. And good afternoon, everyone. As RJ discussed, we believe 2026 will be an important year as we scale our business. Launching R2 will extend our brand to the mass market, and we expect R2 will drive meaningful automotive segment growth and profitability over time.

Additionally, our gross profit performance, coupled with our focus on cost management enabled our adjusted EBITDA for 2025 to be at the favorable end of our guidance.

Speaker #1: Now, before I dive into the quarter, there are a few key financial metrics that I'd like to highlight for 2025. First, on a full year-over-year basis, we delivered nearly $5,500 of improvement in average sales price due to the introduction of our second-generation R1 Quad models, a higher mix of R1 units, and increased base prices for the 2026 model year.

All of these metrics represent our continued progress in the operational efficiency and profitability of our business with such a strong foundation for 2026 and beyond.

We expect the gross profit per unit for <unk> and the commercial vans to be further enhanced as we ramp up production and deliveries of <unk>, coupled with the gross profit contribution of <unk> over time.

Speaker #1: Second, on a full year-over-year basis, we achieved an approximately $9,500 improvement in automotive cost of goods sold per unit due to material cost reductions and operational efficiencies.

Turning to the results in the fourth quarter, our consolidated revenues were approximately $1 3 billion.

Speaker #1: Finally, the improvement in unit economics in our automotive segment, when combined with our strong software and services performance, resulted in greater than $1.3 billion of improvement in full-year gross profit making 2025 our first full year of positive gross profit.

Consolidated gross profit was $120 million and our gross profit margin was 9%.

Most profit included $108 million, and depreciation and $26 million of stock based compensation expense.

Adjusted EBITDA losses for the fourth quarter were negative $465 million.

Speaker #1: Additionally, our gross profit performance coupled with our focus on cost management enabled our adjusted EBITDA for 2025 to be at the favorable end of our guidance.

$137 million improvement from Q3, 2025, due to higher gross profit and lower operating expenses.

Speaker #1: All of these metrics represent our continued progress in the operational efficiency and profitability of our business, with such a strong foundation for 2026 and beyond.

Now looking at our automotive segment during the fourth quarter, we produced 10974 vehicles and delivered 9745 vehicles from our manufacturing facility in normal, Illinois. This was the primary driver of the $839 million of automotive revenue.

Speaker #1: We expect the gross profit per unit for R1 and the commercial vans to be further enhanced as we ramp up production and deliveries of R2, coupled with the gross profit contribution of R2 over time.

Automotive gross profit for the fourth quarter was negative $59 million.

Speaker #1: Turning to the results of the fourth quarter, approximately $1.3 billion. Consolidated gross profit was $120 million, and our gross profit margin was 9%. Gross profit included $108 million of depreciation and $26 million of stock-based compensation expense.

At $71 million improvement from Q3, 2025, due to a higher mix of commercial van which resulted in the lowest cost of goods sold per unit in our history.

Our software and services segment reported another strong quarter with $447 million of.

Revenue and $179 million of gross profit.

Speaker #1: Adjusted EBITDA losses for the fourth quarter were -$465 million. $137 million improvement from Q3 2025 due to higher gross profit and lower operating expenses.

<unk> hundred $73 million or approximately 60% of software and services revenue was attributable to our joint venture with Volkswagen Group. We also experienced strong growth from our marketing and vehicle repair and maintenance.

Speaker #1: Now, looking at our automotive segment, during the fourth quarter, we produced $10,974 vehicles and delivered 9,745 vehicles, from our manufacturing facility in normal Illinois.

Looking at our balance sheet, we ended the year with approximately $6 $1 billion of cash cash equivalents and short term investments.

In 2026, we expect to receive an additional $2 billion of capital as part of our joint venture with the Volkswagen Group.

Speaker #1: This was the primary driver of the $839 million of automotive revenue. Automotive gross profit for the fourth quarter was -$59 million, a 71 million improvement from Q3 2025 due to a higher mix of commercial vans, which resulted in the lowest cost of goods sold per unit in our history.

$1 billion is an investment subject to the successful completion of winter testing.

Which RJ discussed earlier and $1 billion is nonrecourse debt, which we expect to receive in October.

Finally for our 2026 guidance, we expect to deliver between 62000 67000 total vehicles across our one or two in our commercial vans.

Speaker #1: Our software and services segment reported another strong quarter with $447 million of revenue and $179 million of gross profit. $273 million or approximately 60% of software and services revenue was attributable to our joint venture with Volkswagen Group.

We expect total deliveries of approximately 9000 to 11000 per quarter in the first half of 2026.

We plan to start production of the <unk> launch variant with a single shift and expect to add a second shift towards the end of the year.

Speaker #1: We also experienced strong growth from our marketing and vehicle repair and maintenance. Looking at our balance sheet, we ended the year with approximately $6.1 billion of cash, cash equivalents, and short-term investments.

While we believe our gross profit will increase year over year, we expect the complexity of a new vehicle launch to negatively impact our automotive gross profit in the second and third quarters before becoming a benefit to our overall operations in the fourth quarter as we ramp production and deliveries.

Speaker #1: In 2026, we expect to receive an additional $2 billion of capital as part of our joint venture with the Volkswagen Group. $1 billion is an investment subject to the successful completion of winter testing which RJ discussed earlier and $1 billion is non-recourse debt which we expect to receive in October.

As a reminder, we believe this is a transition year for the automotive segment profitability.

Delivering a strong exit rate for <unk> production and deliveries will be a key focus for our team.

For 2026, we expect an adjusted EBITDA loss of between Q1 and $1 8 billion.

Speaker #1: Finally, for our 2026 guidance, we expect to deliver between $62,000 and $67,000 total vehicles, across R1, R2, and our commercial vans. We expect total deliveries of approximately 9,000 to 11,000 per quarter in the first half of 2026.

Our adjusted EBITDA guidance also includes a step up in R&D spend as we accelerate investments in our autonomy roadmap and look to deliver lidar. Our first wrap one chips and limited point to point functionality for our customers by the end of the year.

Speaker #1: We plan to start production of the R2 launch variant with a single shift and expect to add a second shift towards the end of the year.

We believe autonomy will be key fundamental long term differentiator for our business.

Speaker #1: While we believe our gross profit will increase year-over-year, we expect the complexity of a new vehicle launch to negatively impact our automotive gross profit in the second and third quarters before becoming a benefit to our overall operations in the fourth quarter as we ramp production and deliveries.

We also plan on the continued growth of our SG&A driven by the expansion of our service and sales footprint as we scale with our <unk>.

Finally for 2026, we expect capital expenditures of $1 95 to 2.05 billion related to finalizing construction and tooling for our Q and normal kicking off vertical construction for our Greenfield plant in Georgia, and the continued build out of our sales service and charging infrastructure.

Speaker #1: As a reminder, we believe this is a transition year for the automotive segment's profitability. Delivering a strong exit rate for R2 production and deliveries will be a key focus for our team.

In closing thank you again to the team for delivering a great 2025, as we look forward to 2026, we remained steadfast in our belief that our <unk> and our technology roadmap will be truly transformative for our growth and profitability.

Speaker #1: For 2026, we expect an adjusted EBITDA loss of between $2.1 and $1.8 billion. Our adjusted EBITDA guidance also includes a step up in R&D spend as we accelerate investments in our autonomy roadmap and look to deliver LIDAR, our first RAP1 chips, and limited point-to-point functionality for our customers by the end of the year.

I'd like to turn the call back over to the operator to open the line for Q&A.

Well the Q&A section of today's session, we'll be utilizing the raison feature if you would like to ask a question click on the right hand button at the bottom of the screen. Once prompted please on mute yourself and begin with your question. We will now pause a moment to assemble the queue. Thank you.

Speaker #1: We believe autonomy will be a key, fundamental, long-term differentiator for our business. We also plan on the continued growth of our SG&A, driven by the expansion of our service and sales footprint as we scale with R2.

Our first question comes from Emmanuel Rosner with Wolfe Research.

Speaker #1: Finally, for 2026, we expect capital expenditures of $1.95 to $2.05 billion related to finalizing construction and tooling for R2 in normal kicking off vertical construction for our Greenfield plant in Georgia and the continued buildout of our sales, service, and charging infrastructure.

On mute your line and ask a question.

Okay.

Great. Thanks, so much.

My first question is on the cadence that clear you just.

Highlighted with the 911000 per quarter in the first half and then obviously 62 to 67 on a full year basis is that.

Speaker #1: In closing, thank you again to the team for delivering a great 2025. As we look forward to 2026, we remain steadfast in our belief that R2 and our technology roadmap will be truly transformative for our growth and profitability.

10000 per quarter or so.

Is that your expectation for one close Adv for this year in 2026 and then.

The upside in the second half would be essentially delivering the <unk>.

Speaker #1: I'd like to turn the call back over to the operator to open the line for Q&A.

<unk>.

Emmanuel as you think about the cadence.

Speaker #2: Well, the Q&A section of today's session will be utilizing the raise hand feature. If you would like to ask a question, click on the Raise Hand button at the bottom of the screen.

As <unk> articulated in his prepared remarks, we expect first deliveries to begin for <unk> in the second quarter.

Like any ramp the number of deliveries will be rather small as you think about the Q2 impact of our two contribution to the 9% to 11000 units per quarter that we anticipate in the first half of the year.

Speaker #2: Once prompted, please unmute yourself and begin with your question. We will now pause a moment to assemble the queue. Thank you. Our first question comes from Emmanuel Rosner with Wolf Research.

And then as we get into the second half of the year, we expect to see the continuation of the ramp up of our two coupled with the ongoing delivery of our commercial van as well as our wine.

A full year basis, you can think about the our one coupled with the commercial van as being roughly in line with our 2025 total volumes.

Speaker #2: Please unmute your line and ask your question.

Speaker #3: Great. Thanks so much. My first question is on the cadence that Claire you just highlighted with the 9 to 11,000 units per quarter in the first half and then obviously 62 to 67 in a fully year basis.

Okay, and then another one on the cadence side, but more.

From a financial point of view I think in the past you had Todd.

Speaker #3: Is that 10,000 per quarter or so? Is that your expectation for R1 plus EDV for this year in 2026 and then the upside in the second half would be essentially delivering the R2s?

<unk> targeted a thing.

The fourth quarter of this year.

Some level of profitability or two to sort of like demonstrates essentially in the the potential is that still the expectation for this year.

Yes, as we mentioned, we expect 2026 will be a transformational year for our automotive gross profit and we expect that both our <unk> and our overall automotive gross profit will be positive as we exit 2026.

Speaker #2: Thanks, Emmanuel. As you think about the cadence, as RJ articulated in his prepared remarks, always expect first deliveries to begin for R2 in the second quarter.

Thank you.

Speaker #2: Like any ramp, the number of deliveries will be rather small as you think about the key to impact of R2 contribution to the 9 to 11,000 units per quarter that we anticipate in the first half of the year.

Our next question comes from Dan Levy with Barclays. Please on you mute your line and ask your question.

Yeah.

Hi, good evening, Thank you for.

Taking the questions first I wanted to start with.

Speaker #2: And then as we get into the second half of the year, we expect to see the continuation of the ramp of R2 coupled with ongoing deliveries of commercial van as well as R1.

Just a question on the.

Our two volume assumptions, which you just talked about a moment ago.

As youre going into.

Speaker #2: So it's a full year basis. You can think about the R1 coupled with the commercial van as being roughly in line with our 2025 total volume.

The launch do you have a feel for what the aggregate demand is and maybe you could just talk to the the.

A question of your confidence on people wanting to take delivery of our two before the new Adas platform or hardware is put into the vehicle how much of a deterrent the lack of that new hardware it will be on <unk>.

Speaker #3: Okay. And then another one on the cadence side, but more from a financial point of view, I think in the past you had targeted, I think, by the fourth quarter of this year, some level of profitability on R2 to sort of demonstrate essentially the potential.

Our liberties.

Hi, Dan Thanks for the question.

Regards to our two I've had the.

Speaker #3: Is that still the expectation for this year?

So we spend a lot of time on it over the last several months and really over the last month or so driving our validation vehicles that are produced in our plan off of our manufacturing validation building.

The vehicles just absolutely incredible.

The combination of features the packaging the vehicle dynamics for steering feel we're incredibly bullish on them and as I've talked about a lot in the past.

We ultimately think the market is really hungry for some choice in this segment as I said in my opening remarks, just the lack of choice that exist in and around this $50000 price point.

Has led to very high market share concentration of one.

One vehicle.

So this is the first time, there is going to be a real alternative and this is important for folks that are in internal combustion vehicles today midsize Suvs and looking for something that fits their form factor means there are static needs their packaging needs and so we're.

We're very very focused on.

Putting this together.

With that said, we have a lot of confidence in the overall demand profile and of course, that's why we believe so much into the program and leave so much into what we're about to launch.

And just the.

The issue of the Adas platform people, taking it before the new hardware.

Yes.

With new technology, there is always especially for us as a business given that we've got an enormous focus on developing new technology. There is always something new coming in recognizing that there are a lot of customers that are just waiting to get.

Great midsize SUV and so given the enormous backlog of demand we have as well.

The short period that we have where we will be launching with.

Essentially an upgraded version of our Gen. Two autonomy stack before our Gen. III autonomy stack comes we don't think that thats going to be a significant issue for those that want to wait for it there's certainly Ken and for others that are going to be.

I had to get into vehicles.

In a shorter timeframe.

It will be available prior to that.

Okay, great. Thank you as a follow up I wanted to ask about.

Partnership or licensing deals with other automakers and maybe you could just give us a sense of the tone or tenor of discussions on licensing the.

Network architecture to others, and you said that your autonomy day that one of the opportunities on your in house processor was not only that it could be.

<unk> for your vehicles, but you could also sell this to others. It's a better will you said Bang for Buck. So I know, it's early days, there's still a bit out in the initial units of that process are going to need to be for you, but what types of discussions are you, having with automakers on potentially selling that are licensing that to them.

So as I said in opening remarks, we've had.

The first 13 months of establishing a joint venture with Volkswagen. We've we've started winter testing on multiple VW group products.

And and.

And I think the true demonstration.

And.

Yes.

Existence proof if you will of the scalability of our technology in terms of being able to work across multiple form factors different price points different brands and importantly b.

B product ties into into a into a platform that can go across a large.

Existing OEM. This most of our relationships are really important for that and so that's our focus but of course, we have great relationships with.

A broad spectrum of other manufacturers and.

I've said this many times, but I deeply believe that over the course of the next several years every manufacturer.

As to make the decision as to whether or not.

To get to a software defined vehicle, whether or not they're going to develop it themselves.

Secure it from.

From a third party source of which we will be the only demonstrated.

Demonstrated example of having scaled this technology.

Outside of our outside of our own products.

Except that without that technology, you will lose market share and so we're quite bullish on the potential for this technology platform and we see it as really an important part of our portfolio going forward.

Great. Thank you.

Next question comes from Ben <unk> with that piece of mutual line and ask your question.

Okay. Thank you guys very much.

Congrats on all the progress so far.

Maybe first can we talk about.

VW relationship.

The uptick to.

Revenue from Boeing just if you could give us a sense of how that progresses.

The.

Potential to expand the relationship of how we should figure probably grow.

And then the second question was just around growth around Georgia.

The deal.

Guarantee or Youre looking at about maybe just liquidity in general was.

Are you sort of working toward.

Hugh.

Okay.

Thanks Ben.

I spoke a little bit about this in a previous response, but understand we've had a few technical difficulties here. So.

At risk of repeating myself I'll just say.

Cover a few things that I said earlier.

The the Volkswagen relationship continues to progress for now 13 months since the joint venture started.

With that we have started winter testing on several different Volkswagen group products.

And of course, we're working towards the first launch of those vehicles in 2027.

And the relationship has been very very strong we had a great session. In fact, Coincidently last week with with a broad set of the Volkswagen Group leadership team.

And seeing this be used and deployed across not just.

Vehicles, a similar price point to Caribbean vehicles, but across.

Across the price point.

Across a wide band of price points and across a range of form factors is really important and it really demonstrates the scalability of the technology and so ultimately we're going to continue working towards delivering multiple Volkswagen group products, but this does.

Of course open the open the door for opportunity with other manufacturers as well.

And then to put some of the financials behind this software and services outlook as a whole.

We anticipate seeing.

That will approach about 60% year over year growth in our software and services business and it will be a significant driver of our gross profit outlook as well our margins that we expect to be in the mid 30% area as a whole.

Then your second question, which was on the capital roadmap and as I mentioned in my prepared remarks, we ended 2025 with $6 $1 billion of cash cash equivalents and short term investments. We expect that we'll receive another $2 billion from Volkswagen group throughout the course of 2020.

Operator: Earnings call. Today, I'm joined by RJ Scaringe, our CEO and founder, Claire McDonough, our Chief Financial Officer, and Javier Varela, our Chief Operations Officer. Before we begin, matters discussed on this call, including comments and responses to questions, reflect management's views as of today. We will also be making statements related to our business, operations, and financial performance that may be considered forward-looking statements under federal securities law. Such statements involve risks and uncertainties that could cause actual results to differ materially. These risks and uncertainties are described in our SEC filings and the shareholder letter we filed with the SEC. During this call, we will discuss both GAAP and non-GAAP financial measures. A reconciliation of historical non-GAAP to GAAP financial measures is provided in our shareholder letter.

Speaker #1: And that's our focus, but, but of course we have relationships with a broad spectrum of, of manufacturers and, I said this many times, but I, I deeply believe that over the course of the next several years, every manufacturer has to make the decision as to whether or not to get to a software-side vehicle, whether or not they're going to develop it themselves, secure it, yeah, from a, from a third-party source, of which we will be the only, demonstrated example of, of having scaled this technology, outside of our own, you know, outside of our own products.

There are still roughly another $5 billion payment associated with the original joint venture transaction as well that will happen. We anticipate in 2027, and then as it pertains to.

Our broader capital roadmap will continue to remain opportunistic as well on that front.

Speaker #1: Or accept that without the technology, you will lose market share. And so we're quite bullish on the potential for this technology platform, and we see it as really an important part of our portfolio going forward.

On the Doe loan question.

Similar to what we've shared in the past.

We certainly share the presence desire to bring jobs back to the United States. We're excited to keep up our work on creating new American manufacturing jobs will be adding approximately 2000, new jobs at our normal, Illinois plant for the ramp up of our two an additional 7500 jobs at our future Georgia plant is.

Speaker #2: Great. Thank ank you.

Operator: Just before the earnings call, we published and filed our shareholder letter, which includes an overview of our progress over the recent months. I encourage you to read it for additional details around some of the items we will cover on today's call. Following our prepared remarks, we will be taking questions from sell-side analysts. In the interest of keeping the call to one hour, we would ask these analysts to limit any follow-on questions to one. With that, I'll turn the call over to RJ.

Speaker #3: Ladies and gentlemen, we ha are having further technical issues. Please stand by, and we will resume the Q&A as soon as possible. Thank you.

As well.

Similar to the comments are made our radiant is working to help drive innovation and technology leadership in the U S automotive industry for consumers and also associated with our joint venture with Volkswagen group, enabling this technology for the industry as a whole.

RJ Scaringe: Thanks, Jeb. Good afternoon, everyone, and thanks for joining us for today's call. 2025 was a year focused on execution at Rivian as we laid the foundations for scaling our business. Our team progressed the development of our technology roadmap in R2, while simultaneously driving continued improvement in our customer experience and our path to profitability. In founding Rivian, I wanted to demonstrate how a clean sheet, technology-focused vehicle could eliminate long-accepted compromises and provide consumers choice. Our goal with the launch of our R1 products was to establish the Rivian brand by delivering a combination of efficiency, on-road performance, off-road capability, functional utility, and product refinement that simply didn't exist in the market. The first vehicles established Rivian as a brand that enables people to do the things they love, enable adventure, as well as transcend different segments, form factors, use cases, and geographies.

Thank you.

Okay.

Our next question comes from George generate.

C G piece on mute your line and ask a question.

And good afternoon, everyone and thank you for taking my question.

As it relates to your guidance for vehicle sales this year or to the extent you see a strong conversion.

And your backlog for the yard to could you see upside to that or are there certain production bottlenecks that youll have to work through towards the end of the year. Thank you.

Okay.

Thanks George.

The process of ramping of vehicles something we've.

We spent a lot of time talking about in this forum, but certainly internally.

RJ Scaringe: In Q4 2025, the R1S was the best-selling premium electric vehicle priced above $70,000 in California, New York, New Jersey, Oregon, Virginia, and Washington, DC, and it was the best-selling SUV, EV or non-EV, over $70,000 in the state of California. Now, I'm excited that we are months away from starting customer deliveries of R2, our first mass market vehicle. One of the things that's often overlooked around EVs is that there is a surprising lack of high quality choices. At prices around or below $50,000 for a new vehicle in the United States, there are only a few compelling EV choices, as compared to hundreds of internal combustion or hybrid options that have a wide range of form factors and design aesthetics.

We're really putting a lot of effort on making sure we have a very smooth.

Production launch and associated ramp and we often think of the plant as being the bottleneck for the ramp and in fact, we have to remember theres hundreds of other companies that are providing components into Arabian that ultimately really contribute and are key part of the ramp and ramping our supply base is something that we're very.

We focused on in.

Planning around.

And you can only ramp as fast as your your slowest parts so to speak.

So with that said, we've as you heard earlier, we're starting with a single shift we're bringing on a second shift that'll be happening near the end of the year.

And then in 2027, we'll be adding a third shift.

RJ Scaringe: From the lens of the customer, if you want to buy a mid-size SUV with robust technology, autonomous capabilities, and a reasonable price point, you've really only got one choice, and it's been that way for a long time. This is a reflection of a market that's being underserved. We believe R2 is going to change that. R2 is an extension of the experience we delivered in R1 with design elements and performance to inspire adventure, but in a smaller form factor and importantly, at an attractive lower price point. Launch Edition R2 variants will be well equipped with a dual motor, all-wheel drive setup that provides more than 650 horsepower and over 300 miles of range. In mid-January, I was thrilled to drive our first R2 Manufacturing Validation Build off the production line in our factory in Illinois.

And this has been very methodically laid out to make sure that we're ramping consistently evenly across the supply chain.

And so certainly as you alluded to theres going to be.

A large.

Demand backlog that we're working through.

And a tremendous amount of excitement for the <unk> vehicle and this is more of us come out about it and more people get exposure to it we expect that to continue to expand and grow its worth noting.

Some of the preproduction reviews that came out last week the feedback has been universally.

Super positive and so.

We're acutely aware of that but we are working very carefully to coordinate the ramp and coordinate the.

The growth of output with our supply base.

Thank you and maybe as a follow up as you sort of crystallized your your selling prices in your cost structure for the <unk>.

RJ Scaringe: As you've seen from the extremely positive media reviews of our pre-production vehicles over the last few days, R2 is an exceptional vehicle, and I believe will be a game changer for our customers, our company, and the industry. One reviewer said, "The R2 is an exceptional vehicle, quite possibly the best all-around electric vehicle I've ever driven." We look forward to getting investors and more media in R2 for demo drives, so they can experience the capabilities of the vehicle. We plan to provide additional product, pricing, and lineup details on March 12. Turning to our AI and Autonomy Day, it was great to see so many of our stakeholders at our offices in Palo Alto this past December. We were excited to showcase our innovation across our vertically integrated hardware, software, and autonomy teams, and unveil RAP1.

RJ Scaringe: As you've seen from the extremely positive media reviews of our pre-production vehicles over the last few days, R2 is an exceptional vehicle, and I believe will be a game changer for our customers, our company, and the industry. One reviewer said, The R2 is an exceptional vehicle, quite possibly the best all-around electric vehicle I've ever driven. We look forward to getting investors and more media in R2 for demo drives, so they can experience the capabilities of the vehicle. We plan to provide additional product, pricing, and lineup details on 12 March. Turning to our AI and Autonomy Day, it was great to see so many of our stakeholders at our offices in Palo Alto this past December. We were excited to showcase our innovation across our vertically integrated hardware, software, and autonomy teams, and unveil RAP1.

Let me speak to the guidance you gave them at your analyst day last year about reaching EBITDA positivity and $12 seven and your long term vision that are all having 25% ish gross margins in high teens EBITDA lines. Thank you.

Thanks, George as prepared and as discussed in our prepared remarks, we believe that 2026 is going to be a transition year for the automotive gross profit segment.

And our north store Shire for the normal plant is going to be getting our production and deliveries up to about 4000 units per week, while theres a lot of execution required as RJ just walk through from the team in order to achieve that outcome. If we're successful we believe it would put the company in a strong.

RJ Scaringe: Developing our own chip was driven by the need for velocity, performance, and cost efficiency, and is a key development of our autonomy platform. Near the end of last year, we released Universal Hands Free, which expanded our advanced assisted driving capabilities for Gen 2 customers to more than 3.5 million miles of roads across North America. Since its release, customer utilization of our autonomy features has doubled. Rivian is also making significant progress in making software and AI core to everything we do, from the way we design, develop, manufacture, and service our cars, to the way our customers interact with their vehicle. This is enabled by the Rivian Unified Intelligence, a common AI foundation that understands our products and operations as one continuous system and personalizes the experience for our customers. It also defines how applications will integrate in our vehicles in the future.

<unk> positioned to achieve our adjusted EBITDA goals.

And as we look at the broader outlook, we certainly see there being <unk>.

20% gross profit target for automotive segment.

As we think about the overall contribution of software and services.

Theres, many outcomes or a licensing deal that <unk> could do that could allow gross profit should be much higher than the 25% in our end state as well.

Thank you.

Our next question comes from Joseph Spak with UBS. Please on mute your line and ask a question.

Yeah.

Thank you.

And everyone.

Just a couple of questions I know you.

RJ Scaringe: We were excited to demo the Rivian Assistant at AI and Autonomy Day, and expect to launch this feature early this year. Finally, we continue to see the extensibility of our electrical hardware and software platform with the work happening in our joint venture with Volkswagen Group. I'm very pleased that we have delivered vehicles for winter testing for multiple Volkswagen Group brands, 13 months after the formation of the joint venture. In closing, 2025 was a foundational year for scaling Rivian, and I could not be more excited for the year ahead. I believe 2026 will be an inflection point for our business. As an American automotive technology company that develops and manufactures incredible electric vehicles... We believe that the future of the automotive industry will be fully electric, autonomous, and AI-defined. I've never been more confident in the opportunity ahead for Rivian than I am today.

The second ship starts in the back half.

Is the guidance contemplate light.

Exiting the year at a full two shift to rates for the <unk> I just want to sort of understand how we should think about a jumping off point for 2007.

Sure as you can imagine Joe will be in the process of ramping up the second shift. So as you think about the exit rate of 2026, we won't yet be at full production across two chefs will be getting there as we continue to progress all of our operational efficiencies and job.

And get the team are ready to ramp up throughout the course of 2027.

Thank you and then.

I guess RJ or Claire.

RJ Scaringe: I firmly believe Rivian's technology, along with our direct-to-customer ownership experience, position our company to build a category-defining brand with a strong mass-market product portfolio for the US and global markets. With that, I'll pass the call over to Claire to discuss our financial results.

Yes.

<unk>.

You mentioned.

More details on March 3rd I'm, assuming that's also on reservation holders will be invited to configure, but is there any update you can give us on that order book and then on the pricing side one of the things. We've seen we are not <unk> specific.

Claire McDonough: Thanks, RJ, and good afternoon, everyone. As RJ discussed, we believe 2026 will be an important year as we scale our business. Launching R2 will extend our brand to the mass market, and we expect R2 will drive meaningful automotive segment growth and profitability over time. Now, before I dive into the quarter, there are a few key financial metrics that I'd like to highlight for 2025. First, on a full year-over-year basis, we delivered nearly $5,500 of improvement in average sales price due to the introduction of our second generation R1 quad models, a higher mix of R1 units, and increased base prices for the 2026 model year. Second, on a full year-over-year basis, we achieved an approximately $9,500 improvement in automotive cost of goods sold per unit due to material cost reductions and operational efficiencies.

So the industry in the world really is the cost side between metals and memory. So curious to sort of wonder how youre thinking about that impacting.

Your pricing for the vehicle or whether thats contemplated in the EBITDA guidance for the year.

Yes on March 12th will be.

Providing the full picture around the overall portfolio of products that will exist for <unk> and that will include the launch configuration, which is as I said is a dual motor performance variant with premium trend.

The different combinations of trim.

Powertrain performance and battery size or what will be describing in detail on the 12, and then along with that allowing customers to start <unk>.

Configuring their vehicles and.

Claire McDonough: Finally, the improvement in unit economics in our automotive segment, when combined with our strong software and services performance, resulted in greater than $1.3 billion of improvement in full-year gross profit, making 2025 our first full year of positive gross profit. Additionally, our gross profit performance, coupled with our focus on cost management, enabled our Adjusted EBITDA for 2025 to be at the favorable end of our guidance. All of these metrics represent our continued progress in the operational efficiency and profitability of our business, with such a strong foundation for 2026 and beyond. We expect the gross profit per unit for R1 and the commercial vans to be further enhanced as we ramp up production and deliveries of R2, coupled with the gross profit contribution of R2 over time.

Give it allows us to start getting ready, but when you're making deliveries later in Q2.

I think important here as you think about the overall demand profile for the vehicle.

We've put a lot of time into thinking about the different combinations and are recognizing.

What different folks are going to launch and having the benefit of having lots of conversations and also the benefit of seeing that.

What are the most popular trims and configurations in R. One and so we're really excited to go through that but it's something that we do want to go through is presented as a full meal as opposed to giving little bits and pieces rather than talking about the launch configuration. The rest of the configuration is going to be something we talk about detail in about a month.

And then Joe are our adjusted EBITDA guidance does contemplate some of the increases that we've seen in raw material cost and the current supply chain backdrop as well correct.

Thank you very much.

Claire McDonough: Turning to the results of the fourth quarter, our consolidated revenues were approximately $1.3 billion. Consolidated gross profit was $120 million, and our gross profit margin was 9%. Gross profit included $108 million of depreciation and $26 million of stock-based compensation expense. Adjusted EBITDA losses for the fourth quarter were -$465 million, a $137 million improvement from Q3 2025 due to higher gross profit and lower operating expenses. Now, looking at our automotive segment, during the fourth quarter, we produced 10,974 vehicles and delivered 9,745 vehicles from our manufacturing facility in Normal, Illinois. This was the primary driver of the $839 million of automotive revenue.

Our next question comes from Mark Delaney with Goldman Sachs. Please on mute your line and ask your question.

Yes. Good afternoon. Thank you very much for taking the question I was hoping to speak more about automotive Cogs, maybe you can help us better understand what led to the reduction in cost per vehicle, both sequentially as well as year over year and then as you look forward or you just alluded to.

Some of the supply chain challenges around DRAM and other input costs that are embedded into your guidance, but where do you ultimately think the <unk> cost can get to you and is that a 50% reduction in.

In the Bom cost compared to our one still the right level to think about.

Yeah.

Sure for Q4, we were able to deliver $92000 of Cogs per unit.

And that was about a $4000 per unit improvement relative to the third quarter.

One of the key drivers was associated with the next shift so we had higher penetration of commercial land in the fourth quarter relative to the third quarter and then beyond that the ongoing operational efficiencies that we continue to execute across our normal operations as well that also contributed to the reduction in our.

Claire McDonough: Automotive gross profit for the fourth quarter was -$59 million, a $71 million improvement from Q3 2025 due to a higher mix of commercial vans, which resulted in the lowest cost of goods sold per unit in our history. Our software and services segment reported another strong quarter, with $447 million of revenue and $179 million of gross profit. $273 million, or approximately 60% of software and services revenue, was attributable to our joint venture with Volkswagen Group. We also experienced strong growth from our marketing and vehicle repair and maintenance. Looking at our balance sheet, we ended the year with approximately $6.1 billion of cash, cash equivalents, and short-term investments.

Our Cogs per unit.

As we look at the full year over year improvement.

The biggest driver that we saw was associated with the reduction in our material cost.

That was both the transition for us to move fully to Gen. Two vehicles. We also in addition saw a significant step down in terms of a lot of our raw material costs, and importantly stepped down in the cost of our lithium prices that was another contributor for us as well as we looked over at the.

Full year over year step down in terms of cost per unit, coupled with the ongoing operational efficiencies that we continue to progress throughout the course of the year.

Claire McDonough: In 2026, we expect to receive an additional $2 billion of capital as part of our joint venture with the Volkswagen Group. $1 billion is an investment subject to the successful completion of winter testing, which RJ discussed earlier, and $1 billion is non-recourse debt, which we expect to receive in October. Finally, for our 2026 guidance, we expect to deliver between 62,000 and 67,000 total vehicles across R1, R2, and our commercial vans. We expect total deliveries of approximately 9,000 to 11,000 per quarter in the first half of 2026. We plan to start production of the R2 launch variant with a single shift and expect to add a second shift towards the end of the year.

As we look forward to our Q.

One of the key factors for us with our to US is the opportunity for us to have also over the course of the last year started to see some meaningful benefit from our joint venture a joint sourcing opportunities associated with our low voltage electronics that we're sourcing for.

The <unk> vehicle.

And that's really been a key enabler for us to continue to progress.

The material cost trajectory of the <unk> product as well and then as we approach the Georgia plant and we'll have further opportunities to drive additional.

Synergies or efficiencies as we start to source future vehicle volumes as well that we'll share at the.

Claire McDonough: While we believe our gross profit will increase year-over-year, we expect the complexity of a new vehicle launch to negatively impact our automotive gross profit in the second and third quarters before becoming a benefit to our overall operations in the fourth quarter as we ramp production and deliveries. As a reminder, we believe this is a transition year for the automotive segment's profitability. Delivering a strong exit rate for R2 production and deliveries will be a key focus for our team. For 2026, we expect an Adjusted EBITDA loss of between $2.1 and 1.8 billion. Our Adjusted EBITDA guidance also includes a step-up in R&D spend as we accelerate investments in our autonomy roadmap and look to deliver LiDAR, our first RAP1 chip, and limited point-to-point functionality for our customers by the end of the year.

The fundamentals of the mid sized platform as a whole and so there's a there are a couple of a couple of the puts and takes the other callout that I would highlight as well is we do anticipate seeing a reduction in terms of our tariffs per unit. So.

So we didn't have the full benefit of the centenary to offsets for the entirety of the fourth quarter. So we will see further benefit from a tariff per unit standpoint, as we progress forward.

<unk> will also benefit from that in the future.

Yes.

Thanks for all that bare metal question was on <unk> and I understand probably flattish volumes. There for 2026 based on your comments earlier on the call, but you did speak to.

Plan for some additional variance, including one with more range for Amazon. So maybe help us understand when to expect that new product for the commercial segment and what that might mean for.

Claire McDonough: We believe autonomy will be a key fundamental long-term differentiator for our business. We also plan on the continued growth of our SG&A, driven by the expansion of our service and sales footprint as we scale with R2. Finally, for 2026, we expect capital expenditures of $1.95 to 2.05 billion, related to finalizing construction and tooling for R2 and Normal, kicking off vertical construction for our greenfield plant in Georgia, and the continued build-out of our sales, service, and charging infrastructure. In closing, thank you again to the team for delivering a great 2025. As we look forward to 2026, we remain steadfast in our belief that R2 and our technology roadmap will be truly transformative for our growth and profitability. I'd like to turn the call back over to the operator to open the line for Q&A.

Van deliveries in the broader commercial opportunity going forward.

We do expect some growth in our EV demand in 2026 and as you as you called out that there is an all wheel drive version of the van and a larger battery pack variant as well and both of those are.

To help unlock.

Specific use cases within the Amazon network, we're working really closely with Amazon and defining the requirements of those and excited to get those launched in.

The relationship with Amazon continues to be very positive and certainly the ETB continues to perform extremely well.

Thank you next question comes from Chris <unk> with Needham. Please on mute your line and ask your question.

Okay.

As you talk about adding the second shift then adding a third shift can you kind of just walk through setting up hiring for these these workers and the normal area I'm just not sure. We should think about that as a barrier or a burden or just kind of is it already in motion or do you already have these and as you kind of move through from one shift to another just kind of any detail around that please.

Operator: For the Q&A section of today's session, we'll be utilizing the Raise Hand feature. If you would like to ask a question, click on the Raise Hand button at the bottom of the screen. Once prompted, please unmute yourself and begin with your question. We will now pause a moment to assemble the queue. Thank you. Our first question comes from Emmanuel Rosner with Wolfe Research. Please unmute your line and ask your question.

Yeah Yeah.

Hello, Chris Thank you for your question.

Hiring process is in place.

We're hearing according to plan, we have enough candidates at the beginning of assuming this continues candidates.

Who work for us so.

We are good from us and thus part of the team that will populate our two lines of these coming from the interest evolves.

And then for a borrow more from these higher from from outside we have.

Emmanuel Rosner: Great. Thank you so much. My first question is on the cadence that, Claire, you just highlighted with the nine to 11 thousand units per quarter in the first half, and then obviously 62 to 67 on a full year basis. Is that 10,000 per quarter or so, is that your expectation for R1 plus EDV for this year in 2026? And then the upside in the second half would be essentially delivering the R2s?

Moving forward our training programs.

But for hiring the people pre hiring activity just to let them know what he is working in the lines and what they need.

They should expect there and so far we are very happy with the response of the.

Alan pool, and the people in Florida, we have seen there so.

Oh.

Okay.

Alright, Thank you and then just.

I guess I was just kind of want to understand you've had the reviews. This week you kind of.

Claire McDonough: Thanks, Emmanuel. As you think about the cadence, as RJ articulated in his prepared remarks, we expect first deliveries to begin for R2 in Q2. That would, like any ramp, the number of deliveries will be rather small as you think about the impact of our contribution to the 9 to 11,000 units per quarter that we anticipate in the first half of the year. And then as we get into the second half of the year, we expect to see the continuation of the ramp of R2, coupled with ongoing deliveries of commercial van as well as R1. So on a full year basis, you can think about the R1 coupled with the commercial van as being roughly in line with our 2025 total volume.

Flip it over to Curt as far as the first chairman other times in a month and then we could see initial deliveries sometime in the second quarter I guess I'm just kind of curious.

Just thinking about maybe apple on the iPhone and iPad and it's just sort of boom here. It is you can buy it now I guess I'd just love to hear about why the spacing is a psychological effect or its just comes out of what you can produce when you completed the plants, but just the timing of the cadence as you move towards the launch.

Well, thanks, Chris one of the.

Amazing things about the Archer program as there is an enormous backlog.

But that does create a challenge for us.

With making sure.

Essentially how do we select who receives their vehicles first and having a process around that.

And so opening up there.

The reservation or opening up the configuration process allows us to start.

Emmanuel Rosner: Okay. And then another one on the, you know, cadence side, but more from a financial point of view. I think in the past, you had targeted, I think, by the Q4 of this year, you know, some level of profitability on R2 to sort of like demonstrate essentially the, you know, the potential. Is that still the expectation for this year?

Taking this demand backlog and organizing around when we make deliveries and who gets their vehicles first as sound as if you could like press a button and instantly have.

Thousands and thousands of vehicles available. So we start producing we are ramping production.

But the demand will outpace our ability to produce and so that process allows us to organize.

Claire McDonough: Yes. As mentioned, we expect—you know—2026 will be a transformational year for automotive gross profit, and we expect that both R2—

Claire McDonough: Yes. As mentioned, we expect, you know, 2026 will be a transformational year for automotive gross profit, and we expect that both R2-

In a thoughtful way and learning a lot from some of the past launches we've had.

Do we prioritize and how do we see.

Sequence deliveries to our broad base of customers.

Our next question comes from <unk> Kalia with TD current please on mute your line and ask your question.

Great. Thanks, Hi, everybody wanted to actually ask on the Universal Hence free curious how initial feedback has been since December how we should think about feature improvements in Ot updates this year and maybe what you're also assuming for paid subscriptions this year.

We were really excited to talk about this this is a huge effort within the business.

Autonomy and AI there was of course focused on all the work that we're doing here.

Our universe lands for us really think of it as the first step.

And a whole series of steps that expand the capability, so universal and expanded the number of miles where you can drive with hands off the wheel, but it is on the road.

It's around $3 5 million miles essentially any any road with March lanes.

And later this year will be.

Unlocking the ability or enabling the body for the vehicle to drive point to point. So you put your addresses the vehicle to vehicle navigate to that address.

And then the next steps ultimately are driving towards what we think of as a personal level four but between point to point and personal level four will have hands off <unk> take your eyes off the road and do other things starting first on the highway and then expanding from the highway.

And then following that we will have.

Our first level for applications within a geofence Jerry to start, but ultimately expanding over time.

In our view and really strong conviction is that over the course of the remainder of this decade, we're going to see autonomy go from something that today with hands-off capabilities.

Certainly is a nice feature to have but as we start to move to hands off and is off and then ultimately to level four where the vehicle can operate itself entirely on its own including <unk>.

Driving empty.

It really creates.

A whole new customer experience and we think it becomes.

A critical part of the purchase decision and this will this is going to drive significant change in how we think about the business model, that's going to drive significant change in how consumers think about what vehicles they want to purchase.

Thank you Roger that that's very helpful. As a quick follow up on the financials.

Any sense of how we should think about working capital flows this year, particularly as you go through the initial or to ramp.

Sure we will see our working capital will be an outflow of cash for us over the course of 2026 and that in part is driven by the buildup of our inventory balance associated with the launch of <unk>.

Got it very helpful. Thank you.

Our next question comes from Andrew <unk> with Morgan Stanley. Please mute your line and ask a question.

Great. Thanks, so much for taking the question.

Actually I just want to come back RJ to what you just said on autonomy really driving the value proposition and driving experience over the next few years and I guess I'm just curious like can you share your thoughts around whether or not.

There will be a retrofit opportunity for existing.

Our new <unk> customers that don't have gen, three with lidar and existing <unk> customers.

And any thoughts of when youll introduce lidar onto onto our one production.

We're not in terms of a retrofit this isn't something that's contemplated or planned.

Certainly there'll continue to be over their updates for our Gen. Two vehicles are one gen. Two vehicles in our launch our two vehicles, but.

In terms of hardware upgrades those are in our plan.

The hardware upgrades that we've talked about in the past we talked about autonomy in AI data. These are these going to be on vehicles in the early part of 2027.

And.

Certainly very very excited about those but but the capabilities and even the demo that we had at our autonomy idea, which was a point to point demo that's being done that demo was on our gen. Two of our our one vehicles. So that's that will be available on any gen two or one vehicle as well as the VR two vehicles will be launching with.

Got it Okay and can you get is the plan to get to is off point to point with with Gen. Two or is that something that's going to require.

And three I think the important thing to keep in mind on our.

Upgraded architecture, which is as I said coming in 27.

Is that is a few really important purposes. One of course is it raises the ceiling on what's possible. So it grows the opportunity to add even more capability beyond point to point.

But it also serves as an even more enhanced part of our data flywheel, where we have enhanced cameras a higher level of influence in vehicle, but importantly, we add a lidar as you referenced which is turns essentially every vehicle into part of our ground truth fleet.

Which is really helpful for training our end to end model and so the way that the.

The model continues to improve as we're benefiting from that.

Thousands and thousands of drivers.

That are on the road in the vehicles that are on the road.

Holding an interesting and unique events back off of vehicles, and allowing us to feed that into the overall training loop that we have for our what we call our large driving model.

Got it Okay and just one quick clarification. When you say Gen. Three will be available early 2027 will that include <unk> or is that just still are too.

This is for <unk>.

Thank you I appreciate it.

Our next question comes from Edison <unk> with Deutsche Bank. Please on mute your line and ask your question.

Hi, This is Winnie oncor Edison team.

Yes.

Hi, yes. Thank you so much.

My first question is on the relationship with VW as it matures and I was wondering if the topic.

How to best utilize vehicle data come out.

And we're asking this in the context.

VW and actually having a much larger fleet.

And being able to potentially.

Is it access to that data for training.

So just curious if you thought.

Tommy.

The the Volkswagen fleet and what ultimately we are delivering to Volkswagen from a technology platform doesn't include our autonomy platform. So it's R.

It's our.

So embedded software platform, our topology of use including Arizona architecture, but it doesn't include our self driving architecture.

Got it.

And then maybe just on the rat one chip I'm curious to hear your maybe longer term aspirations for that.

Is it something you think there will be limited to $2 million.

Do you envision maybe this thing is buy from.

From your partners of other Oems.

And whether it could be potentially apply to.

Non automotive products right.

Thanks.

I guess I'll answer it really broadly this is.

When we think about our self driving and autonomy efforts. This is of enormous focus for the business and.

Ah represents our most significant.

The area of capital investment from an R&D point of view.

And so when we look at this through the lens of the next several years. We do believe that is as we continue to demonstrate progress and work towards that growing capability set that I talked about before ultimately culminating in level for.

This is a platform that certainly beyond Arabian has applications and so.

We do envision a world in which this becomes something that we can monetize through a few different ways. We can monetize it through increased market share and growing number of vehicle sales. We can of course do that through new and unique business models and new ways of thinking about consuming transportation.

And we can do that through selling and providing that technology to other manufacturers.

Now specifically to our wrap one processor as well as its future future variance of that processor.

We do see applications for vision based robotics.

Well beyond the vehicle of course, the vehicle is a a great near term vision based robot but.

Even within.

Mind robotics, which is a new company that we created.

That is also an example of a great customer application a great use case application for our App one processor.

Thank you.

Our next question comes from Tobias space with Rothschild and Kai Beckmann. Please on mute your line and ask a question.

Hi, Thank you both for your time.

Mass bulk breaking management's latest thoughts on capital.

Battery cell manufacturing and assembly.

<unk>.

Development.

The price of lithium salts.

I know that this activity was contemplated at one point.

Forthcoming Tom Stanton Springs.

Well, thanks, Tobey, we've we've found.

Great working partnerships with our battery cell suppliers and have taken a very active role in securing in sourcing some of the upstream precursor materials. So you called out lithium that's a really great example of an area that we from a sourcing point of view spend a lot of time on.

But being able to work with.

These key battery partners and leverage the investments they've made in production capacity.

And their own cell construction in cell design, it's been really helpful for us in terms of efficiently deploying capital.

Great. Thank you.

Our last question comes from James <unk> with BNP Paribas. Please on mute your line and ask your question.

Hi can you hear me.

Yes, James Mckinney here, you hear me okay. Thanks.

Just curious on your thoughts regarding our ones potential to see additional demand from.

One of your major competitors announcing the end of its too high end models next quarter right, we're talking about.

<unk> thousand annualized units essentially up for grabs in the U S. Just seems like the <unk>.

<unk> can be a natural home for for many of those buyers just curious your thoughts thanks.

Yeah the.

Tesla model X model X, which as you said it will stop production.

Duction are at least what's been said is next quarter.

<unk> was a really important.

Important product from a electrification point of view.

It was one of the first.

More at scale products to show customers, how exciting electrification can be.

And so as that leaves the market along with the model X. It does create an opportunity there as I've talked about this a lot in the context of our two the lack of choice. But this also is true in the case of our <unk> and our one as it stands our rns as I called out in my opening remarks.

It's an enormously successful product in the in this premium price category. So it's the it's the best selling.

Premium SUV electric or non electric in the state of California.

And then as the best selling premium electric SUV in United States, and the best selling premium electric vehicle SUV or non SUV and.

And a number of states across the us and so.

With even less choice now and that price category. It does represent an opportunity for us.

But I would just say very broadly that the overall lack of choice.

And this is really true.

And the price category of our too.

We think as an enormous opportunity for us or for us to capture market share and of course.

Provide something really exciting to customers.

Yes, it makes lot of sense. Thank you.

My follow up just for the strong gross profit contribution slated for this year can you help dimension at all what the expected contribution might look like from VW as we think about that 60% year over year growth. Thanks.

Sure as you think about the software and services segments roughly half of our revenue comes from.

Revenue streams associated with our joint venture with Volkswagen Group, and we expect that to largely remain trimas had till 2020 fixes as well.

And it is a more disproportionate share of the overall gross profit dollars that we earn out of the <unk> services segment.

Okay.

Thanks.

This concludes the Q&A section of the call I would now like to turn the call back to Jay <unk> for closing remarks.

Well, thanks, everybody for joining the call and we apologize for some of the technical difficulties that we had at the start but.

Hopefully a takeaway from this is just how excited we are about our two as I said I've had a chance to spend a lot of time in the car.

And in a variety of ways, whether it's taking my kids to the sports games or loading up the back with gear and it is just such an incredible embodiment of the radian brand and capture so many.

So much of the essence of what makes our won a special vehicle, but at a price point that as we said starts are 45 million and will allow much much larger number of customers to access the vehicle.

And so as we think about the next couple of months, where we as a company remain incredibly focused on the launch ramp of this vehicle along with the continued development of the technology of our developed building both on the software side, which we talked a bit about but certainly also on the on our autonomy side.

And so with that thanks again for joining the call and we're looking forward to a lot of folks being able to experience the art to themselves.

Q4 2025 Rivian Automotive Inc Earnings Call

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