- Rivian’s CFO revealed some interesting financial details about the R1S and R1T.
- The refreshed EVs are now tens of thousands of dollars cheaper to manufacture.
- Multiple technological improvements and negotiations with suppliers led to the cost reductions.
Rivian turned a gross profit for the first time in the last quarter of 2024, which is a big deal for any car startup. In a Q&A with fans (and critics) of the company, Rivian Chief Financial Officer Claire McDonough explained the company is still losing money overall, but things are improving fast.
In Q4 2024, Rivian posted a gross profit of $170 million. The biggest part of that is due to the massive cost reduction brought by the refreshed R1S and R1T which debuted last year. According to McDonough, Rivian managed to slash the cost of goods sold per unit produced by a massive $31,000. That didn’t lead to a price cut for customers, but it helped Rivian get closer to profitability, which is essential if it wants to survive.
The impressive reduction in costs is due to all the technological enhancements brought by the model refresh, as well as many negotiations with parts suppliers. As a reminder, the 2025 Rivian R1S and R1T switched to a new zonal architecture for the electronics. A new lithium iron phosphate (LFP) battery pack is available for the entry-level trim and all the drive units are manufactured in-house by Rivian irrespective of the powertrain configuration.
Out of the $170 million, $60 million was attributed to software and services such as financing, insurance, maintenance and the sale of used vehicles. Last year, Rivian started selling pre-owned R1S and R1T EVs directly on its website in some states. The cars get a 130-point inspection and come with a factory warranty for both the complete vehicle and battery/drivetrain combination.
The next big thing is the R2, which is slated to go into production in 2026 at the R1S/R1T factory in Normal, Illinois. However, McDonough said “that’s just the beginning,” with the R3 and R3X also in line for a later release. Furthermore, Rivian’s CFO added that “there’s a lot more magic to come out of our design studio.” No details were offered, but that sure sounds like there are other cars in the pipeline, possibly smaller than the upcoming R3.
As for the production costs associated with the R2, McDonough said Rivian expects them to be half of those of the R1. The R2 will become a global model after Rivian ramps up production, with the first units meant for overseas markets exported from the U.S.
More service centers are in the works for the North American market. There are 71 already operational and 30 more will be opened by the end of the year. Rivian also operates over 600 mobile service vans stateside, with more to follow.
