Rivian finally made a gross profit, but the company is still a cash incinerator extraordinaire

Yesterday, electric vehicle manufacturer Rivian reported a major milestone: $170 million of gross profit in Q4, the company’s first-ever quarter with that metric out of the red. Investors liked that, but had less sympathy for Rivian’s new delivery guidance of 46,000 to 51,000 vehicles, which at its midpoint implies that the company is expecting to deliver roughly 6% fewer vehicles than the ~51,600 it managed in 2024.

EVaporating

Selling cars for more than they cost you to make is, of course, a major step down the road toward profitability. But covering the rest of your company’s expenses — marketing, sales, research and development, HR, accounting, legal — is a completely different journey. And for Rivian, it’s one that will require a lot more scale... and a lot more capital. Since Rivian’s public markets debut in 2021, when it raised ~$13.5 billion — America’s seventh largest IPO at the time — the company has been steadily burning its cash reserves.

While the company’s cash pile actually rose this quarter by about $1 billion, that figure was lifted thanks to $1.3 billion received in November in conjunction with the closing of its joint venture with automotive giant Volkswagen. For the year as a whole, the company still burned through $1.7 billion in its core operating activities.

On the earnings call, Claire Rauh McDonough, the company’s chief financial officer, addressed the issue:

“During 2024, we reinforced Rivian’s long-term financial flexibility. We received $2.3 billion of the expected $5.8 billion of funding from the joint venture transaction with Volkswagen Group. We also announced the closing of an up to $6.6 billion Department of Energy loan, which together with the remaining proceeds from the Volkswagen Group is expected to fund an incremental $10.1 billion of potential capital on top of the $7.7 billion of capital we had on hand as of December 31, 2024.”

TLDR: Rivian says it has nearly $18 billion of accessible capital on hand to ramp up the production of its R2 and R3 vehicles and forge a path toward actually making money. A few short years ago, it had a very similar amount on its balance sheet.