Earnings Call Insights: Rivian Automotive, Inc. (RIVN) Q4 2025
Management View
- CEO Robert Scaringe highlighted that “2025 was a year focused on execution at Rivian as we laid the foundations for scaling our business” and underscored the R1S’s market position, stating it was “the best-selling premium electric vehicle priced above $70,000 in California, New York, New Jersey, Oregon, Virginia and Washington, D.C.” He announced the upcoming R2 mass market vehicle, emphasizing its competitive positioning: “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.” The R2 Launch Edition will feature “a dual motor all-wheel drive setup that provides more than 650 horsepower and over 300 miles of range.”
- Scaringe discussed Rivian’s AI and autonomy initiatives, referencing the unveiling of RAP1, the company’s own chip, and the recent release of universal hands-free capabilities, with customer utilization doubling post-launch. He indicated significant progress with Volkswagen Group, noting, “We have delivered vehicles for winter testing for multiple Volkswagen Group brands, 13 months after the formation of the joint venture.”
- CFO Claire McDonough stated, “On a full year-over-year basis, we delivered nearly $5,500 of improvement in average sales price” and achieved an “approximately $9,500 improvement in automotive cost of goods sold per unit.” She reported “greater than $1.3 billion of improvement in full year gross profit, making 2025 our first full year of positive gross profit.” Additionally, she noted, “Adjusted EBITDA losses for the fourth quarter were negative $465 million, $137 million improvement from Q3 2025.”
Outlook
- Rivian expects to deliver “between 62,000 and 67,000 total vehicles across R1, R2 and our commercial vans” in 2026. McDonough detailed, “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.”
- The company anticipates, “our gross profit will increase year-over-year,” though “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.”
- For 2026, Rivian projects an “adjusted EBITDA loss of between $2.1 billion and $1.8 billion” and capital expenditures of “$1.95 billion to $2.05 billion.”
Financial Results
- Consolidated revenues for the fourth quarter were reported as “$1.3 billion.” Consolidated gross profit totaled “$120 million,” with a gross profit margin of “9%.” Gross profit included “$108 million of depreciation and $26 million of stock-based compensation expense.”
- The Automotive segment produced “10,974 vehicles and delivered 9,745 vehicles,” generating “$839 million of automotive revenue” and an automotive gross profit of “negative $59 million, a $71 million improvement from Q3 2025.”
- The Software and Services segment achieved “$447 million of revenue and $179 million of gross profit,” with “$273 million or approximately 60% of software and services revenue” attributable to the Volkswagen Group joint venture.
- The company ended the year with “$6.1 billion of cash, cash equivalents and short-term investments” and expects an additional “$2 billion of capital as part of our joint venture with the Volkswagen Group” in 2026.
Q&A
- Emmanuel Rosner, Wolfe Research: Questioned the cadence of vehicle deliveries and R2’s contribution. McDonough explained, “we expect first deliveries to begin for R2 in the second quarter…the number of deliveries will be rather small as you think about the Q2 impact of R2…as we get into the second half of the year, we expect to see the continuation of the ramp of R2.”
- Dan Levy, Barclays: Asked about demand for R2 and the impact of ADAS platform updates. Scaringe expressed confidence in demand: “there’s going to be a large demand backlog…we’re incredibly bullish on [R2].” On the ADAS platform, Scaringe said, “the short period that we have where we’ll be launching with essentially an upgraded version of our Gen 2 autonomy stack before our Gen 3 autonomy stack comes — we don’t think that’s going to be a significant issue.”
- Ben Kallo, Baird: Inquired about Volkswagen joint venture revenue and capital needs. McDonough responded, “we anticipate seeing that we’ll 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.”
- George Gianarikas, Canaccord: Asked about production bottlenecks for R2. Scaringe noted, “ramping our supply base is something that we’re very focused on and planning around. You can only ramp as fast as your slowest part.”
- Mark Delaney, Goldman Sachs: Asked about COGS improvement. McDonough stated, “we were able to deliver $92,000 of COGS per unit, and that was about a $4,000 per unit improvement relative to the third quarter.”
Sentiment Analysis
- Analyst questions focused on production cadence, demand for R2, partnership revenues, supply chain constraints, and cost controls, with a generally positive but probing tone, especially around execution risk for the R2 launch and financial targets.
- Management maintained a confident and optimistic tone during both prepared remarks and Q&A, repeatedly emphasizing “confidence in the opportunity ahead” and describing R2 as a “game changer.” The tone was more assertive and forward-looking than the previous quarter, with fewer references to uncertainty.
- Compared to the previous quarter, analysts remained constructive but pressed more on production logistics, demand conversion, and the impact of new technology launches on financial outcomes.
Quarter-over-Quarter Comparison
- The current quarter featured more concrete guidance for 2026 deliveries (62,000 to 67,000 vehicles) and the upcoming R2 launch, whereas the previous quarter focused on preparations and validation milestones for R2.
- Management tone shifted to greater confidence, with explicit references to positive gross profit for the full year and strong cash position, compared to a more cautious stance previously around trade, tariffs, and regulatory uncertainty.
- Analysts’ focus moved from concerns about regulatory credits and battery sourcing to supply chain ramp, demand conversion for R2, and the scalability of the Volkswagen partnership.
- The financial outlook included improved cost metrics, positive gross profit for the full year, and narrowed adjusted EBITDA loss guidance for 2026.
Risks and Concerns
- Management cautioned that “the complexity of a new vehicle launch” would “negatively impact our automotive gross profit in the second and third quarters before becoming a benefit…in the fourth quarter as we ramp production and deliveries.”
- Supply chain constraints and the ramp-up of supplier capacity were highlighted as potential bottlenecks for R2 production.
- Rising raw material costs and supply chain backdrop were incorporated into EBITDA guidance, and management reaffirmed their focus on cost management and operational efficiency.
- Analysts raised concerns about the conversion rate of the R2 backlog, production ramp timing, and the impact of delays in launching new autonomy hardware.
Final Takeaway
Rivian management projects 2026 as a pivotal year, with the R2 launch expected to drive significant vehicle delivery growth and mass market expansion. The company delivered its first full year of positive gross profit and improved per-unit economics, while maintaining a robust liquidity position. Management remains confident that operational efficiency, strategic partnerships, and new product launches will be transformative for Rivian’s growth and profitability in the year ahead.