Rivian Leaves Investors Wanting More on Critical R2 SUV Debut

Rivian electric vehicle pickup trucks at the company's showroom in New York. Photographer: Yuki Iwamura/Bloomberg Photo by Yuki Iwamura /Photographer: Yuki Iwamura/Bloom

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(Bloomberg) — Rivian Automotive Inc. shares tumbled as it offered investors few fresh details about demand for its new R2 electric SUV, a model that’s seen as critical to the electric-vehicle maker’s future.

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The company on Thursday announced a smaller-than-expected loss in the most recent quarter and plans to increase initial production at a new factory in Georgia to 300,000 vehicles annually, up from 200,000 units previously. Construction of the facility is scheduled to begin this year with R2 output starting in late 2028, the company said.

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Rivian also stood by its full-year target of delivering 62,000 to 67,000 EVs this year. Executives, however, provided few concrete specifics about R2 demand signals, potentially disappointing investors looking for more insight about the model in a challenging environment for EVs.

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“With little incremental around the ramp of R2, we see this as a less consequential result,” Barclays analyst Dan Levy said in a note.

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Rivian’s shares erased early gains in after-hours trading to trade down 5.1% at 6:38 p.m. in New York. The stock has declined about 17% this year.

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Investors are closely watching progress on the lower-priced R2 because it’s key to expanding Rivian’s reach beyond the large, expensive EVs it currently sells to consumers in modest numbers. The company began production of the first batch of vehicles for sale to customers last week at its plant in Normal, Illinois.

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During the company’s earnings call, Chief Executive Officer RJ Scaringe said the R2 has received positive feedback from automotive journalists and others who’ve experienced the vehicle, though he did not quantify order trends.

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“The overall excitement around what we’ve been able to put together in terms of content, features, packaging, just the overall value proposition, is really resonating,” Scaringe said.

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The response to the vehicle has been “overwhelmingly positive,” Scaringe said, which “bodes extremely well for the ramp up happening over the course of this year and into next year.” 

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Rivian now must execute the challenge of scaling up production of an all-new vehicle at a time when other automakers are seeing the cost of materials such as steel and aluminum move higher. Chief Financial Officer Claire McDonough said the R2’s launch will weigh on automotive gross profits in the second and third quarters, before becoming a benefit in the final three months of the year as output and deliveries grow. 

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The first-quarter net loss was 33 cents a share, an improvement from the 48-cent deficit the company posted in the same period last year. On an adjusted basis, Rivian lost 54 cents a share, better than the 59-cent average deficit estimated by Wall Street.

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To support the Georgia facility, Rivian reached an agreement with the US Department of Energy for a smaller loan to fund the factory, now worth as much as $4.5 billion compared with up to $6.6 billion previously. Rivian said it now expects to begin drawing from the loan in early 2027.