Rivian R2 is a new, smaller Rivian SUV/crossover. The company is saying it’s designed to be cheaper to build than its bigger model, while still keeping the “Rivian” feel—so more people can afford it.
This means Rivian is trying to make the car cheaper to build by changing the way it’s designed and manufactured. They’re saying they did it without making the car less appealing.
A bill of materials is basically the shopping list of parts needed to build the car. Rivian is saying R2’s parts list should cost about half as much as the bigger R1 platform’s parts list.
Fixed cost efficiencies are cost savings achieved when the same overhead costs (like factory setup, engineering, and certain infrastructure) are spread across more units. Rivian connects this to higher production volumes for R2.
Design for manufacturing is about making the car easier and cheaper to build in factories. Rivian is saying this helps them cut costs when they make more cars.
Die castings are metal parts made by pouring molten metal into a mold to create a strong shape. Rivian is using bigger die-cast parts to reduce the number of separate pieces needed.
Normally the battery is just mounted inside the car. A structural battery pack means the battery box also helps the car’s body stay rigid and strong, which can reduce weight and parts.
This is how the car’s electrical system is organized—how power and signals get from the battery to the rest of the EV. Rivian is saying they redesigned it to use less wiring, which can make the car lighter and cheaper to build.
High voltage electronics are the EV’s power-control components that handle the battery’s high-voltage electricity. Rivian is saying they’re putting more of this hardware into one box to simplify the design.
Sourcing leverage is basically buying power—getting better pricing or terms because you’re ordering more. Rivian is saying R2’s scale should help them negotiate better on parts.
Production capacity is how many cars a factory can build per year. Rivian is saying it’s increasing the Georgia plant’s capacity so it can make more R2 cars.
Regulatory credits are like government “points” for selling cleaner vehicles or meeting emissions rules. If the company earns fewer of them in a quarter, revenue and profit can drop even if vehicle sales are steady.
Depreciation is an accounting way of charging the cost of big equipment or buildings over several years. It affects reported profit even if no cash is spent in that exact quarter.
This is the accounting cost of paying employees with company stock. Even though it’s not a cash expense like wages, it still counts against profit on the income statement.
Supply chain risks are uncertainties in getting parts and materials on time and at the expected cost—often caused by disruptions, shortages, or logistics problems. The speaker says Rivian is working to manage these risks and offset elevated costs as production ramps.
This is the part of the business that makes money from software and ongoing services, not just selling the cars. They’re reporting it as its own category in the financials.
Gross margin is a way to measure how profitable a product is. It’s basically the difference between what it costs to make and what it sells for, and the question is whether factory changes could affect Rivian’s target profit level.
Capacity optimization refers to adjusting manufacturing output and resource allocation to make production more efficient—often by changing how much is built at a given plant or phase. In this segment, it’s tied to Rivian’s Georgia plans and how those changes might influence financial targets.
Trims are different versions of the same car—like different equipment packages. The discussion is about how launching those R2 versions affected customer demand.
The Rivian R3 is another electric model Rivian is planning. They’re saying the factory capacity they’re adding in Georgia will support building R3 too, not just R2.
A “platform” is like a shared base design that multiple car models can use. Rivian is saying the Georgia factory will be set up to build different models (R2 and R3) that share that base.
ODD is the “where and when” the self-driving system is meant to work. The question here is whether the robo-taxis and personal cars will be allowed to drive in the same kinds of places if they use the same hardware.
It means the car can drive itself from your starting point to a destination address. Instead of you steering the whole time, the car handles the driving for that trip.
Level three means the car can do the driving, and you don’t have to watch the road constantly—but you still have to be ready to take over if the car asks. It’s not full self-driving without any driver involvement.
Level four is when the car can handle driving by itself in certain situations, without you needing to constantly supervise or take over. Here, they’re saying this is what their robo-taxis will start doing in 2028.
A “robo-taxi” is a car that can drive itself to pick up passengers and take them somewhere, like a rideshare. The goal is that you don’t need a human driver in the seat.
Here, “sensors” means the car’s perception hardware—things like cameras and radar—that help it understand what’s around it. Adding more sensors can make the self-driving system more confident and capable.
An “autonomous driving suite” is the self-driving software package in the car. It’s what decides what the car sees, what it plans to do, and how it controls the vehicle.
Term
L4
“L4” is a self-driving level where the car can do the driving in certain situations without you needing to constantly take over. The speaker is saying they need a lot of testing before they can enable that capability.
An “end-to-end approach” means the self-driving software is built as one connected system instead of many separate parts. Rivian is saying this helps the car get smarter as they add better sensors and more computing power.
Rivian’s “Gen2 R1” refers to a newer version of their R1 vehicle platform. They’re saying their self-driving software started on these cars and then gets improved as they add more sensing hardware.
The Proton Gen-2 is a newer vehicle platform from Proton, meaning it’s the basic “design foundation” the car is built on. The podcast brings it up because the way a platform is designed can affect how the vehicle is made and how well it works. It’s discussed as part of a broader technology plan.
A neural net is a computer learning system that improves by training on lots of examples. Rivian is using it to describe their self-driving software as something learned from data, not just manually programmed.
“Rules-based” means the car follows programmer-written logic. Rivian is contrasting that with their data-trained model, which they say can improve as they add better sensors and more computing.
“Compute” here means how powerful the car’s computer is. Rivian is saying that more computing power helps the self-driving system process more information and get better.
They’re talking about the car’s “autonomous driving software system.” The point is that an older version relied more on fixed rules, while the newer approach is built differently.
LiDAR is a sensor that uses lasers to “see” the world in 3D by measuring how far away things are. They’re saying they’ve already tested it on prototypes before putting it into customer cars.
They’re describing a test fleet of cars that gather “real-world facts” about driving. The goal is to use that data to teach the car’s software better and faster.
Term
auto revenue
“Auto revenue” means the money the company makes from selling vehicles (and related vehicle deals). It’s a way for the company to separate vehicle income from other kinds of income.
Amazon is the big delivery company they’re talking about. In this call, Amazon is also a major customer buying EVs and helping create the conditions for more EV deliveries.
Concept
commercial products
“Commercial products” refers to EV offerings aimed at businesses—often fleets—rather than consumer retail buyers. These products are typically evaluated on uptime, route coverage, total cost of ownership, and how well the vehicles integrate with the customer’s operations.
“Extended range” just means the EV can drive farther on one charge than the standard version. For delivery fleets, that can mean fewer charging stops and more time actually working.
“Ramp up” in an automotive/EV context means increasing production and deployment volume over time. It often includes scaling manufacturing, logistics, and—when fleets are involved—coordinating charging and operational readiness.
Concept
infrastructure ready to ingest a lot of EVs
They’re saying Amazon has to get its charging and operations set up so it can handle many EVs at once. As the fleet grows, the supporting systems have to grow too.
In an order-to-delivery context, “conversion ratios” describe how many customer orders turn into actual purchases and/or deliveries. Comparing them to “previous orders” helps gauge whether demand is strengthening or weakening as the product moves from early interest into real sales.
This is Rivian’s next-generation set of computer hardware for advanced driving features. The idea is that newer hardware can handle the car’s “driving brain” tasks better and faster.
The perception stack is the car’s perception software. It’s the part that turns sensor data into an understanding of what objects are around you and where they are.
Autonomy Plus is a paid add-on for advanced driving features. Rivian is talking about how many people choose it and how that helps their software business grow.
“Eyes off” means the car may allow you to look away from the road for a short time while it drives. The key idea is that it only works under certain conditions and you still have to be ready to take over.
This phrase describes a driving-assist rhythm: when you can take your hands off, when you must watch the road, and then when you can take your hands off again. It’s basically about how the car and driver share control.
“Gas prices” means how expensive it is to buy gasoline. When gas gets more expensive, some people are more willing to consider an electric car to save money on fuel.
Concept
trading in
“Trading in” means giving your current car to the dealer when you buy a new one. They’re saying the types of cars people trade in are changing as fuel costs rise.
The Rivian R1S is an electric SUV with room for more than two rows of seats. People talk about it because it’s meant to be practical for families while still being fully electric. It was mentioned because the hosts were comparing it to other large electric options.
It means how many people are actually using the car’s “autonomy” features. Higher penetration rate means more drivers are choosing cars with those features.
This means more advanced self-driving features than level two. The idea is that the car does more of the driving so the driver has less to do.
Concept
time back
It’s the idea that self-driving features make commuting less stressful and more relaxing. If it feels good in real life, people may start choosing cars based on it.
Concept
autonomy as a critical purchase criteria
They’re saying self-driving features will become a major reason people buy a car. Instead of being optional, it could be something buyers actively pay for.
KPIs are specific numbers a company watches to see if it’s hitting its goals. For RoboTaxi, they’re the kinds of metrics that show whether the service is working reliably and safely enough to meet milestones.
An autonomy package is the bundled set of hardware and software that enables automated driving features. It typically includes sensing, compute, and driving-control software, and it’s evaluated with deployment milestones and on-road proof points.
A safety driver is a person in the car who watches what the automated system is doing. It’s used early on so a human can take over if something goes wrong.
“Operate fully on their own” refers to reaching a higher level of automation where the vehicle can handle driving without human intervention. In the transcript, this is framed as a staged roadmap culminating in fully autonomous operation as part of a service.
A deployed fleet is a set of cars that are actually out in the real world. It’s how companies test self-driving tech in everyday situations and collect results.
OEMs means original equipment manufacturers—companies that build vehicles. Licensing technology to other OEMs would mean Rivian’s autonomy tech could be used in vehicles made by those manufacturers.
Concept
domain-based network architecture
This is about how a car’s computers are organized and how they talk to each other. The speaker is saying the industry may be moving away from one setup (“domain-based”) to another that better supports advanced tech.
ECUs are the car’s little computers that run different jobs. Think of them like separate control boxes that each handle a part of the car’s electronics.
Zonal architecture means the car’s electronics are grouped into sections (“zones”) that share computing resources. It’s meant to make software updates easier and more consistent across the car.
“Autonomy” means the car using sensors and computers to help drive itself. “Autonomy realm” is just the speaker talking about that self-driving technology area.
Radar uses radio signals to detect objects around the car. It’s especially useful for tracking things and can work well even when visibility isn’t great.
The speaker means the software is designed so it can work in more than one kind of vehicle. That makes it easier to roll out the same autonomy approach across different models.
The Volkswagen ID. Buzz is an electric van made by Volkswagen. The podcast mentions it because it’s an example of electric vehicle technology being used outside of Rivian. It’s brought up in the context of a partnership and where the first deployments happen.
The speaker brings up Tesla to say this “zonal architecture” idea isn’t brand-new. It’s something other major automakers have already been working on.
Concept
trains of miles
“Trains of miles” is a metaphor for the continuous stream of real-world driving that vehicles accumulate over time. For autonomy and fleet-based services, more “miles” generally means more opportunities to learn from real conditions and improve systems.
Rideshare companies are the services you use in an app to get a ride. The point of partnering is that they already handle a lot of the matching and operations.
Market concentration means a few companies dominate the market. If one app already has lots of riders and drivers, a new partner can benefit from that existing scale.
A test fleet is a small number of cars used to try things out and collect information. It helps companies learn how the service works without launching everywhere at once.
It means they’re building fewer cars than they want to. When you make fewer cars, the factory costs are spread across fewer units, so each car can cost more.
It’s basically how much money the company makes from selling cars after paying the direct costs to build and deliver them. “Automotive gross profit” means they’re talking about the car business, not everything else.
It means how much money (or cost) each car represents on its own. As the factory gets better at producing cars, each one tends to cost less and make more profit.
Some costs stay the same even if you build more cars. When production increases, those same costs are spread across more vehicles, so each car effectively gets cheaper to produce.
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Good afternoon and thank you for joining us for Rivian's first quarter 2026 earnings call.
Today I'm joined by RJ Scurringe, 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
earnings presentation we filed with the SEC today.
Hello everyone and welcome to Kilowatt, a podcast about electric vehicles, renewable energy,
autonomous driving, and much much more. My name is Bode and I am your host and on today's episode
we are going to cover Rivian's Q1 2026 earnings call. I feel really confident they're going to
mention the R2. This earnings call was actually released about two weeks ago. We're just now
getting around to, well I'm just not wheat, I should just blame myself, I'm just now getting
around to covering it. So let's go ahead and start off with RJ Scurringe, the CEO and founder of Rivian.
Let's start with his opening remarks. Good afternoon everyone and thanks for joining us
for today's call. Last week I was thrilled to celebrate the start of Salewa R2 production
with our team at our plant in normal Illinois. It's an exciting milestone in Rivian's history
and the culmination of all the hard work and energy from so many people across the company.
As I've said before, I believe the R2 will be a game changer for our customers and will be a key
driver of our company's long-term growth and profitability. In an American automotive marketplace
starved for high quality EV choice, I believe R2 is an attractively priced option sized for
everyday ventures from school pickups to weekend trips that is targeting the very popular five
passenger SUV and crossover segment. With R2 we are taking our design, performance and technology
and bringing it to a significantly broader audience without losing what makes Rivian
unmistakably Rivian. We've started R2 Delivery Star employees and I have to say I absolutely love
having R2 as my daily driver. I could not be more excited to get this vehicle into the hands
of lots of customers starting this spring. In developing R2 our team relentlessly focused on
achieving structural cost reductions while maintaining the desirability of the product.
For R2 our bill of materials is expected to be approximately half of our R1 platform.
For non-bomb cost to get sold we expect a serious reduction of more than 50%
resulting from a focus on design for manufacturing and leverage fixed cost efficiencies through
higher production volumes. This is how we expect to proactively deliver R2 at an accessible price
point at scale without compromising performance and utility customers love for Rivian.
Key design changes for R2 include part eliminations and reductions through the introduction of large
die castings, a structural battery pack, a new highly efficient drive unit, the evolution of our
next generation electrical architecture to remove miles of copper wire and the consolidation of our
high voltage electronics into a single enclosure. We are also seeing significant sourcing leverage
relative to R1 across a variety of components. Now as we begin to scale our operations in normal
with R2 we're very excited to partner with the US Department of Energy to grow our manufacturing
footprint in Georgia. R2 provides the opportunity to expand the Rivian brand to millions of drivers.
As a result we made the strategic decision to increase the production capacity for the first
phase of our Georgia plant by 50% bringing it to 300,000 units of annual production capacity
for our midsize vehicle platform. This change is expected to boost cost efficiency while still
providing significant room for future expansion in later phases and support thousands of jobs
in Georgia as we grow American manufacturing and work to ensure the US retains its leadership and
innovation and technology in transportation. We remain on track for the production of our
midsize vehicle platform to begin in Georgia in late 2028. All right so I did not know that they
were delivering R2s already to employees so that's fun. Just a little housekeeping just in case
you didn't catch it on our lucid earnings call. Bomb is bill of materials so what it costs
and materials to actually build the vehicle so non-bomb would be anything outside of that in
terms of costs. But effectively what he's saying here is the R2 is built to be profitable
and honestly hopefully it is. Only time will tell at this point as Rivian gets everything ramped up
and they kind of figure out where their struggles are and how to overcome those complications and
hurdles. I do feel eventually that this will be a net positive for the company and this isn't
not exactly like a bold statement to be honest with you but I think this is going to be a pretty
popular car. All right RJ gave a brief update on the Uber Rivian partnership and a little bit of
teeny tiny update on the you know autonomous technology that's going in the R1 and the R2s
and they're starting to roll that out but honestly he didn't give a lot. There wasn't there wasn't a
lot of how do you how are you saying this. There wasn't a lot of detail so I'm just going to leave
that out. Next up we're going to hear a little bit from Claire's opening remarks starting with
deliveries and then we'll kind of see where that goes. In the first quarter we produced 10,236
vehicles and delivered 10,365 vehicles which was the primary driver of our 908 million dollars of
automotive revenue. Automotive gross profit loss was 62 million dollars compared to 92 million
dollars of gross profit for the same quarter last year primarily driven by the 100 million dollar
decrease in sales of automotive regulatory credits and lower production volumes which resulted in a
45 million dollar increase in depreciation and stock based compensation expense combined.
While current macro and geopolitical factors are creating added complexity,
cost and uncertainty our team continues to work hard to manage supply chain risks and offset
elevated costs. Our software and services segment reported another strong quarter as depicted on
slide 13. During the first quarter the segment generated 473 million dollars of revenue,
a 49 percent year-over-year increase and 181 million dollars of gross profit.
282 million dollars or approximately 60 percent of software and services revenue was attributable
to our joint venture with Volkswagen Group. We also experienced strong growth from remarketing
and parts and service. During the quarter we also recognized 506 million dollar gain
in other income in our financials related to the Series A capital raise and related
deconsolidation of mine robotics from our financial statements. We currently own approximately 38 percent
of mine robotics on a shares outstanding basis. Looking at our balance sheet we ended the
quarter with approximately 4.8 billion dollars of cash, cash equivalents and short-term investments.
With regard to our funding roadmap in 2026 we expect to receive a total of 2.55 billion
dollars of capital from our strategic partners. Today we received 1000000000 dollars from
Volkswagen Group in exchange for equity following successful completion of the
testing milestone by RT Tech. The testing program spans several months utilizing reference
vehicles from the Volkswagen, Audi and Scout brands. Later this quarter we expect to receive
300 million dollars from Uber in exchange for equity related to the signing of our partnership
agreement subject to certain conditions and later this year we expect to receive 1 billion dollars
in non-recourse debt from Volkswagen Group and an additional 250 million dollars from Uber
in exchange for equity subject to the completion of certain milestones and conditions related to
RoboTaxi development. As outlined on slide 14 this brings total available liquidity and
expected capital in 2026 of nearly 8 billion dollars. Additionally we're very excited to
partner with the U.S. Department of Energy to grow our U.S. manufacturing footprint.
The up to 4.5 billion dollar DOE loan which consists of approximately 4 billion dollars
of principal and approximately 500 million dollars of capitalized interest provides low
cost financing for our 300,000 unit capacity greenfield expansion in Georgia bringing Rivian
to meaningful scale. We expect the 515,000 total units of capacity between our Illinois and Georgia
plants will provide Rivian a path to free cashflow positive once fully ramped. We expect to draw on
the loan by early 2027 subject to certain conditions. Two weeks ago our normal factory sustained
damage from a tornado and proud of the way our teams have rallied together to get production
back up and running while we repair the damages. Despite the weather impact our 2026 guidance
remains unchanged. We continue to expect full-year deliveries of between 62,000 and 67,000 total
vehicles across our one, our two and our commercial vans. We also continue to expect to deliver
approximately 9,000 to 11,000 vehicles in Q2 as we expect the ramp of our two deliveries will be
back half-weighted. While we continue to believe our gross profit will increase year-over-year,
we expect the complexity of a new vehicle launch will negatively impact our automotive
gross profit in the second and third quarters before becoming a benefit for 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 path towards long-term profitability as we scale our
two. For 2026 we continue to expect an adjusted EBITDA loss of between 2.1 to 1.8 billion dollars.
While economic and geopolitical conditions including supply chain and international conflicts pose
risks, we remain steadfast in our plans to invest behind key growth drivers. We continue to progress
our autonomy roadmap and the expansion of our sales and service footprint as we scale with our two.
We believe these strategic investments will deliver long-term value to our shareholders.
Finally, for 2026 we are maintaining our capital expenditure guidance of 1.95 to 2.05 billion
dollars. Our CAPX-BEN primarily relates to finalizing construction and tooling for our two
in normal, the continued build out of our sales, service and charging infrastructure,
and kicking off construction of our Greenfield plant in Georgia.
In closing, I'd like to congratulate our teams again for the successful start of
saleable R2 production and the strong execution in the first quarter. We continue to believe
that R2 and our technology roadmap will be truly transformative for the growth and profitability
of our business. Honestly, I did not expect to let this go that long. I thought I would maybe
play at most two minutes of her opening remarks, but I thought that was all pretty interesting.
Not a lot of stuff that we cover here in terms of the technology of EVs, more of kind of where
Rivian's at in terms of their financial situation and what kind of money they have on the table
through partnerships with Uber and Volkswagen coming in in the next few months. I think that's
great, especially as they ramp up the R2 production and where they're at with the Georgia plant and
all that stuff. So I thought it was a good update. And again, Claire kept her opening remarks pretty
short. So we have lots of questions from analysts. Our next question is from Ito McKaylee,
from DJ Cowan. Please unmute your line and I'll ask you a question.
Great. Thanks, everybody. Just first, going back to the Georgia capacity optimization.
Curious if it has any impact on your previous long-term financial targets at 25% gross margin?
And maybe on that as well, you can maybe share your initial kind of takeaways on kind of R2
demand generation since you kind of launched the trims.
Well, thanks, Ito. Yeah, and I think obviously the decision to increase the capacity of the
first phase of Georgia coincides with, I should say, it reflects the level of confidence in our
products and our business. I think most importantly, we've just started production on R2 out of our
existing normal Illinois facility. And we've had early media events and early customer events
and the level of enthusiasm for the product has just been outstanding. So everything from the
packaging of the vehicle to the way that it drives to the integration of technology,
the overall response has been overwhelmingly positive. And so that bodes extremely well for
the ramp up happening over the course of this year and into next year. But it also sets up a
wonderful foundation for us as we think about further capacity on this platform,
both for R2 as well as R3 and variants of those vehicles out of the Georgia facility.
All right. Honestly, I thought there would be a lot more questions when it comes to the R2
and demand and all this other stuff. But the first three or four questions I skipped because they
were very much financial oriented and not something that fits what we do in this show.
So I missed, I skipped those. This one, I left it in because he actually asks about the
demand and the feedback they've gotten from customers, which has been understandably enthusiastic.
I think that's great. I wonder, I believe in the question he asked what the demand was,
not what the enthusiasm was. And I do believe the demand is probably higher than your normal
EV startup for the R2. But man, it would be a lot more interesting to know what the demand was,
not what the enthusiasm is great. What's the demand? Obviously, it's higher than they thought
it was going to be because they bumped up capacity at their Georgia plant, but the Georgia plant's
not going to be up until 2028, I believe. So yeah, I mean, we'll see, I guess. The next clip,
we're going to hear a little bit more about the Uber and Rivian partnership.
On the Uber announcement, I'm curious whether the robo taxis themselves that will go into
the Uber network will have the exact same hardware set as the personal vehicles. And I ask because
if you're going to launch in 2028 in complex domains like San Francisco and Miami, would that
not also imply a pretty wide ODD for the personal vehicles if they're both operating on the same
hardware? We talked about this during our autonomy day late last year, but I think it's
important to recognize there's going to be a whole series of steps we make in terms of progressing
towards level four. And so in that series of steps, the first layer this year on our consumer vehicles
is launching our point-to-point capability. And so that's the ability for the vehicle to
drive entirely on its own to an address. And just this week, we do lots of regular rides
internally. I had a great ride with James and the team. And it's so exciting to see how much it's
progressed and our technologies progressed even since our autonomy day late last year. And so
we're very encouraged by this. But that first step of making point-to-point available to customers
is going to be a really important step for our consumer vehicles. As we continue to go into
2027, we'll be allowing in specific areas eyes off. And so it's hands off eyes off. That's a
level three capability. And then as we go into 2028, as you said, that's when we'll have our first
deployments of a level four capability in a robo-taxi. And in the robo-taxi variant, there
will be some additional sensing on the vehicle. So it will be different than the pure consumer
vehicle. But we are planning to have a personal version of level four as well. And we've talked
about that quite a bit. We think the market for a vehicle that you own, being able to completely
drive itself, do things like drop you at the airport, go to the grocery store, get groceries for you,
pick up kids from a sports event. These are really high value creating activities for the
level four capability. And we see them on both robo-taxi applications and on personal owned
applications. I am really looking forward to what Rivian actually has when it comes to autonomy.
And it sounds like they're making incremental steps to level three. And then from level three
to level four. And that makes sense. And it makes sense that they're going to put more
sensors on their robo-taxi. And at some point in time, they'll release a consumer version of that.
All of that makes sense to me. I'd like to know what they think their challenges are going to be.
Because I don't think they're going to be all that different than what Tesla's challenges are
when it comes to bringing this to consumers. Not so much the robo-taxi side of things.
Obviously, like we said, there's more sensors in the robo-taxi and all that stuff. And we don't
know exactly what Tesla is doing on their side of things when it comes to their robo-taxi. We
just know what they say. And I guess we only know what Rivian is saying as well. But that doesn't
change the fact that we'd still like to know. How long did they think that's going to take?
What are the challenges they think they need to overcome? Because
aside from Elon's over-promising and under-delivering in a time frame, like he generally or the team
generally delivers eventually. But there is a lot of over-promising and optimistic time frames,
we'll say. But I think Rivian's going to have similar problems in terms of developing the
technology. Not necessarily. RJ is not the same person as Elon. I don't think they're going to
have the same problems with messaging. I think that that's going to be much more tempered
but with RJ and the Rivian team. But also,
you know, once we get this software out there and once we start seeing people use it,
where are the holes? What can be improved? What does it do really well compared to Tesla's
autonomous driving suite? You know, all that stuff. I'd like to see more comparisons that way. And we
will as these vehicles get into other people's hands that are outside the company. What would
you do with those extra sales is up to you. Switch to Shopify today at Shopify.com
and get a $1 trial, Shopify.com slash listen. All right, let's go ahead and move on to our next
analyst question. Thank you. Our next question is from Dan Levy from Barclays.
As a follow up, RJ, I wanted to double click on the point you gave in the prior question for me
to tell you about getting to L4. You'll have point to point at the end of this year and you'll only
have the vehicles with the LiDAR end of this year beginning of next year. It does seem like there's
probably a lot of testing that has to happen between when you get those cars with the LiDAR out
to the point where you have, you know, a launch. So it just helped us understand, you know,
what the testing curve looks like, what you need to do from when you have the cars with the LiDAR
to, you know, being able to unlock L4 because it does seem like, you know,
there's a lot of miles that have to be driven on that new vehicle.
Yeah, I think a really important point to make here is just the way the self-driving systems
architect it. So this is the platform that we launched actually on our Gen2 R1 vehicles is
designed around an end-to-end approach where we're building really what we call a large
driving model, but think of it as a neural net or a foundation model for driving. And that model's
being fed with all of our Gen2 R1 vehicles and of course our launch R2 vehicles and ultimately,
as you said, our R2 vehicles that include a LiDAR. But very different than previous architectures
around self-driving where there were rules-based and, you know, more classically controlled,
as you add more perception and as you add more compute, the capability in the model
only grows. You don't lose the previous knowledge embedded in the model. And so I often sort of
compare it to imagine if you learn to drive with bad vision. And then I handed you a pair of glasses.
You wouldn't forget your knowledge as a driver. You just suddenly be able to see and perceive
things that you may have missed previously. So you become a better driver. And then imagine
we could hand you a 10x multiplier to your compute capability, effectively make your brain 10 times
smarter. Again, you wouldn't forget what you knew before, but suddenly you'd start to notice new
patterns and more nuance in ways that you hadn't in the past. And so that's very important to
recognize is a very fundamental difference in how the model is built today and what we're creating
versus the more AV 1.0 stack where they were, as I described, very rules-based and very classically
controlled. And so because of that, the data accumulation has happened already on R1 and
that will continue with the growth in our car park with R2 all feeds into our overall LBM,
into this large driving model. And even as we think about introducing new sensors,
things like our LiDAR, this is not as if it's first on the vehicle when it's delivered to
customers. We have lots of prototypes today that are running with those. If you're in the Bay Area
and happen to be anywhere around Palo Alto, you'll probably see lots of Rivians with a lot of
additional sensors. And that's part of a ground truth fleet that, again, is feeding into this
large driving model to accelerate the speed at which that model is learning. Think of it as a
brain, the speed at which we're teaching it to drive. And the work that will go into Oakland
launching a customer-facing version of point-to-point, which today, as I said, I was in one of our cars
driving around full point-to-point early this week. It's really exciting, but we want to have,
when it launches to customers, have it be extremely robust. But all that work is accretive
to what ultimately will be going into our level four platform.
Finally, we're talking about stuff that is interesting to me.
Elon has said very similar things to this. Obviously, Elon doesn't talk about the
LiDAR in a positive way. And he thinks that the solution that they have right now is the,
well, I don't know if he really thinks this, he says the solution that they have,
whatever that current solution is, they'll be able to achieve autonomy. And RJ seems to be taking
a more incremental, like we'll add on to this as we go through this and build to level four,
which I don't know. I mentioned this earlier. I think the actual approach to autonomy and
how they have to develop for level three and level four autonomy is going to be similar to
what Tesla is doing, but the messaging is going to be different. And if we assume that what I said
before is correct, then that's what we're seeing now. I don't really have anything else to add
other than to fluff out my feathers and crow a little bit. So let's go ahead and move on to
our next analyst question. Our next question is from Andrew Pococo from Balkan Stanley.
Great. Thanks so much for taking the question. Maybe just to start on the commercial side of
your business, it looks like Amazon made up almost 50% of your auto revenue in the quarter,
so a little bit above historical run rates. Can you just maybe talk to what you're seeing
with that relationship and maybe even outside of Amazon, the level of maybe interest you're
seeing in the commercial products since you launched that extended range version of the
commercial vehicle? Your relationship with Amazon continues to be something that we're
very proud of. We've spent a lot of time on this program from its initial kickoff,
quite some time ago in 2019 through its initial launch, and now ramping, deploying,
that's everything from not only building the vehicles, but on Amazon side,
getting their operations and our infrastructure ready to ingest a lot of EVs. And what we're
now seeing is a reflection of all that work, all the cumulative work that's happened to date
that's allowing the boims for our band program within Amazon to grow, as you pointed out,
pretty meaningfully. And we expect that increased demand for our bands to continue,
and that's super rewarding to see. It's fun to see all the bands on the road,
but that's going to continue to ramp up with Amazon. Now, in terms of other customers and
applications, of course, Amazon's by significant degree the largest operator,
and so they're the ideal lead customer, if you will, but there are lots of other opportunities
we see. But in the immediate term, our focus remains on Amazon and ramping to support them.
Great update. I don't really have anything to add to this, other than now I'm very surprised
when I see an Amazon truck that is not a Rivian. Every time I see one that's one of the older ones,
I was like, what did you do that Amazon decided to punish you with this particular truck? What
happened that you were being punished? Because everybody else is driving these really nice
new Rivian fans around. And for some reason, you're in this diesel-guzzling box truck that
is not fancy at all. So I'm sure they didn't do anything. Maybe the Rivian trucks down for
maintenance or whatever, and they had to take this other one out. I'm sure there's not anything
nefarious going on. But I do have that thought, even though I know there's probably nothing.
It's not their driver's fault, that's what I'm saying. All right, let's move on to our next question.
Thank you. Our next question is from George J. Narikas from Countercourt.
Please unmute your line and ask your question.
So I know it's early days, but I was wondering if you could please give us any color on
our two order trends and maybe some color on the conversion ratios relative to previous orders.
Thank you. George, as you said, it is early days for deliveries, but the signals I'd be
looking at are just the reception around the product and whether it's expert journalists,
automotive journalists, or lifestyle journalists, or customers that are getting to experience the
vehicle. 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. I'm really
pleased with having spent a very large amount of time in the car and used by daily driver.
I couldn't be more pleased with the result. The work that the teams did to make something
that's truly remarkable. We had a few journalists say this might be the best
vehicle ever made. That's wonderful for the teams to hear and it's really encouraging
for us as we get ready to ramp the vehicle. Okay, this is neat, but I don't think we got any sort
of order trends. It does seem like a high mark to hit for someone to say that this is the greatest
car ever built from a test drive. I'll just leave that here. Again, that's not RJ saying this. This
was a journalist. It's just RJ calling that out, which you know, whatever. All right, let's go
ahead and move on to our next clip. And maybe just as a follow up, I just wanted to confirm that
the Gen 3 sensor suite was going to be available later this year on the R2. Thanks.
That's correct. Yep. So the Gen 3 autonomy hardware suite, which is both our in-house
rack one platform. And so this is our in-house inference platform, 800 tops per chip. We have
two of those chips in the vehicle. So it's extremely powerful. It's a big increase,
roughly a 4x increase relative to the NVIDIA based platform. And then the inclusion of
lidars was referenced before along with some other enhancements across the rest of the perception
stack. That's cool. I mean, any time you buy a brand new vehicle like the R2,
you want it to come with the latest and greatest technology. So it sounds like that's going to
be the case for these R2 owners, at least the initial ones, which I don't know why the ones
after that wouldn't get the Gen 3 chip as well. But if you order today and you pick up your car
today, it's not like you are getting stuck with old technology. You're going to get the latest
technology that they have to put out. So that's awesome. Let's move on to our next clip.
Our next question is from Mark Delaney from Goldman Sachs.
Yes, good afternoon. Thank you very much for taking the questions. Starting on autonomy,
I'm hoping you can provide more details on the monetization of autonomy plus so far and any
data points you can share on that and what that might mean for growth in the software and services
business more generally, including if you still think you can grow that segment revenue by about
60% this year. We're encouraged by what we're seeing as you noted at the start of having paid
autonomy plus and it's exceeding our own models on this. So the take rates higher than what we
expected and that bodes really well for us as we're going to be growing the feature set quite
significantly over the course of this year and the introduction of point to point we think is a
major value driver for customers. To be clear, as I said, you can put the address for the
location you're going to into the car and the car will fully drive you there.
And then following that, allowing you to go eyes off in highway conditions and ultimately
everywhere, that means you get your time back and so we're very bullish on the long-term trajectory
to monetize our autonomy on the consumer side and that's for both hands-off, eyes-on, hands-off,
eyes-off and then ultimately level four for personal consumption we see as a really key
driver of value in the long-term. Now, in terms of what that does for our software and services
growth, that is going to start to be something we'll see but it's not something that we're going to be
breaking out separately. I think that's too bad because I would really like to know what
numbers were they thinking internally the take rate would be, what numbers are they seeing
for take rate? Also, are they including the highest end package, whatever that package is
called. It's not premium, prestige or whatever the highest end package, launch package that they have
that includes the autonomy with the purchase price of the car. Is that technically, are they counting
that in their take rate? I mean, they should but it's not, people are buying that car maybe for
different reasons than autonomy. So yeah, it's all very interesting and one of the things when
he was talking I was thinking about is this autonomy that they have, it's $2,500 which is
fairly reasonable and it wouldn't be all that painful for Rivian to offer Tesla owners, for
instance, who already have full self-driving. It's like, hey, come on over to Rivian and we'll
sell you a car for whatever it costs, $58,000 or whatever, but we won't charge you for that autonomy
and you can just have that for free if you're, if you can prove that you're coming from Tesla
and you had full self-driving with them. I think that would be, I think that would be an easy
lever for Rivian to pull to get some customers that direction. Maybe they offer it at half price,
I don't know, but they definitely have a little bit of wiggle room and it wouldn't necessarily
cost them all that much to acquire that Tesla customer $2,500 which is really nothing because
they're developing the software. It's not nothing but it's not $2,500 either. All right,
I had another thought on this but I don't remember what it was. So let's go ahead and move on to our
next analyst question. My other question was on demand for the R1. I'm curious if
Rivian has seen any improvement in order rates for R1, maybe in response to the recent increase in
gasoline prices and what that might all mean for R1 volumes this year. I think
the company had assumed R1 would decline. Is that still your expectation? Thanks.
We're encouraged by the continued enthusiasm for R1. It continues to be one of the market
share leaders in the premium category. In a number of states, it's not just one of the best
selling premium electric cars but one of the best selling premium SUVs, electric or non-electric. So
it's true in a handful of states. We've talked about that in the past. I think it's hard to say
ultimately what's going to happen around demand with the impact of gas prices going up.
Of course, it's a consideration and we do see that manifest in what people are trading in. We're
seeing more trades of gasoline vehicles or vehicles are less efficient than what we're building.
And so we do see that on the rise but I think a lot of folks are wondering how long fuel prices
are going to stay high like this. You know, when my wife and I were, when we bought our van,
we did look at the R1S and we looked at the lucid gravity and technically we could afford
the R1S or gravity, the lower trims, we could afford to buy one of those cars but that would have
been an ridiculously high car payment. And just because we could afford the car payment,
that was going to put a little bit of a pinch on things like being able to do
not just vacations but just being able to let the kids go to do martial arts or
any gymnastics or any of these other things because all that costs money too.
And then on top of all that, you know, gas prices were kind of high when we bought our
van but they're much higher now but I don't think there's a big enough difference that
we would have been like if gas prices cost 460 when we bought our van, I don't think that would
have pushed us into that realm of being like, you know what, it's worth it for us to buy an
electric vehicle for my wife who literally drives a mile to work and back. It didn't make sense for
us but you know with other families you still have rising food costs, rising, you know, just
things that you need to get through life costs like car insurance and
you know buying deodorant and just all sorts of stupid stuff like that. It's all,
it's just a very expensive time to live right now and then adding a very expensive car,
in this case the R1 platform. I don't know that that makes sense for a lot of people which is
why I think we see more people looking at buying those used EVs that are coming off of leases and
stuff. That makes a lot of sense to me but spending that much money on a car doesn't make that much
sense to me because even if, unless you were just driving a ridiculous amount, right, I don't think
that math works. If you really wanted the car, buy the car you really want for sure but if you're
using high gas prices as a metric to spend to upgrade from your say $45,000 car to a $70,000
$100,000 car, I don't, think there's a big disconnect there and not to say that people
aren't looking for sure, you know, 100%. When I moved my, when I moved to my Tesla, one of the
things that was a motivator for me is in my big Mazda CX-9, I was spending about $450 to $550 a
month in gas so I decided that I wanted to pay off my car very fast, my Tesla very fast so I
put a bunch of money down as much as I could afford to and I paid $800 a month which was over
my payment so that I would be done but it was an easy lift because I only had to come up with another
$300 more than I was paying for my Mazda so it wasn't like that was not a, I mean it was a lot
of money, don't get me wrong, but it wasn't like I was like, oh now, you know, now I've got to come
up with $800 a month, no, it's coming up with another $300 or $350 compared to what I was paying
before which was not as big of a lift for me so I guess what I'm saying here is just because gas
prices go up, that doesn't mean that people are going to start buying luxury, luxury electric
vehicles. I do think that it makes more sense for them to buy things like a used EV that could,
they could get for $30,000 or $40,000, that's probably more realistic when gas prices are going
up versus spending that, like I said, between $70,000 and $100,000 and say $10,000. I don't
know that you can make a very good argument for that just based on gas prices alone.
All right, let's move on to our next clip. Our next question is from Andres Shepard from Cantor
Fitzgerald. I think a lot of our questions have been asked but RJ, I want to go back to a topic
I know you're very passionate about which is autonomy and so I guess with R2 beginning customer
deliveries over the coming weeks and with the autonomy plus now having started this month,
just curious on kind of your vision and how you were thinking about that autonomy customer
adoption, you know, what type of autonomy penetration rate do you expect for your customer
owned vehicles? Do you expect customers will prefer the monthly subscription or the one-time
purchase just any color here on your overall vision and customer penetration adoption that
you might be expecting? Thank you. Andres, we're extremely bullish on the importance of autonomy
for customers over the next call it five years and the rate at which we see customers adopting and
selecting autonomy plus and then ultimately as the feature set grows and the capability grows,
that, you know, that adoption rate growing with it. But I think that there's an even bigger question
just from a society point of view. We've been on a journey of, you know, when we think about
autonomy work, level two is, you know, where your eyes are still on the road but you're still
responsible for driving the vehicle. That's like a small appetizer for what you can actually achieve
when you get to higher levels of autonomy where you can take your eyes off the road and truly get
your time back and get your time back without the car, you know, digging you to say, hey,
look back at the road or pay attention or put your hands on the wheel. And so as that starts to occur
and as people start to experience what it's like to truly have your time back, so take, you know,
a 40 minute commute and the idea of getting those 40 minutes back in both directions,
we think it's going to be a very sticky experience and it's going to be something that
once you experience it, even if it's indirect, let's say in a friend's car,
it's going to become a very important purchase criteria. And the reason I call this out is
we really believe over the next five years, the rate of progress
of what we're going to achieve with autonomy will look very, very different. And I'm talking here
at an industry level versus what we've achieved over the last five years means that the topology
of customer expectations and therefore the way that the vehicle purchases are made and the
criteria that are being used to make those vehicles is going to look very, very different
in 2030, 2031 than it does today, where autonomy will be a very critical criteria
where customers are willing to pay for it because they want their time back. They want to not have to
be paying attention. They want to be on their phone, reading a book,
you know, taking a nap, truly getting time back while you're in the car. And so as a result,
as you've heard a few times throughout this call, this is an enormous focus area for us as a business
we're very much deploying a lot of our R&D dollars towards this category. And we've made,
you know, long term investments in the hardware and the vehicles to support that.
Okay, so again, a more measured approach and long term
vision, publicly long term vision, I'm sure Tesla actually, if you get into their internal
meetings there, it's probably again, like I said, something similar to what Rivian's talking about
here. But you know, it's an answer. It's not a super, I think detailed answer, but we're also
very early on in this. So I get where RJ is coming from here. I would like one day to get more
information, but that's where we are right now. Now I'm going to skip over the next question,
but they basically asked about deliveries and what the mix would be for 2026,
because we have the delivery van, we have the R1 platform, and then coming out soon we'll get the
R2 into, you know, the public's hands, not just employees' hands. So they anticipate delivery
of, you know, 62 to 67,000 vehicles in 2026. Of that, the R1 and delivery vans, they said those
numbers are going to be close to what they had in 2025 as far as deliveries, and they had around
42,000 total deliveries in 2025. So we can anticipate, you know, 20 to 27,000 deliveries of the R2 in
2026 if we are doing that math correctly. And I believe I am. So yeah, and that probably sounds
right. It actually might, you know, we might be closer to 62,000 than we are to 67,
just because, you know, supply chain, production ramp, all of the things that can interfere
as they work to getting these deliveries or getting the production to scale.
All right, let's go ahead and move on to our next clip.
Our next question is from Edison Yu from Deutsche Bank. Please unmute your line and ask your question.
Hey, thanks for taking our questions. I wanted to come back on RoboTaxi. Are there any sort of
KPIs that you're sort of tracking or that you need to hit for some of the milestones with Uber? And
I think in the past, you know, the industry has kind of turned to disengagement or miles
between intervention and a flavor that would be great. So before we get to the answer,
a KPI is key performance indicator, which are some sort of metrics that can be used to track
or measure, evaluate, you know, what's going on with the autonomy package that Rivian is putting
out. And in this instance, I would imagine that's what the KPI he's talking about. But it could
also be, you know, for financial stuff and a bunch of other things. But that's what KPI means.
All right, let's go ahead and get the answer. On the path of deploying in 2020, there are a
number of milestones and some of those tied to the investment unlocks with Uber. The first of
those is later this year, we'll be deploying vehicles in both San Francisco, Miami with
a safety driver. So the vehicles will be running but with benefit of a safety driver
in the vehicle with them. And there's a handful of additional milestones ramping up
to ultimately having the vehicles operate fully on their own as part of a service in 2028.
But as we get closer and closer to that date, there will be, you know, there'll be lots of
proof points, if you will, of the progress that's being made that'll manifest on the road that you'll
actually see them not only being tested, but you'll see them as part of some of these deployed
fleets. Well, this seems totally reasonable. So I don't really have anything to add on this.
It just, it continues to follow the narrative that they've already said
forth. So let's go ahead and move on to the next question, which is also about autonomy.
Understood. And, and just a kind of separate question on more autonomy more broadly. I think
there was some, some reports that, you know, you guys were looking to potentially license some tech
to other OEMs. Just wondering, anything you can say about that? Is that something
that we could potentially expect, you know, this year? Anything that would be great? Thanks.
You think there's two broad categories of technology we think that, as I referenced earlier,
that will be very, very important for growing or maintaining market share in the next several years.
And so the first of those is shifting away from a domain-based network architecture,
where you have a very large number of supplier-sourced ECUs that are, you know,
little, think of them as little islands of code on little small computers,
where you might have, depending on the car, anywhere from 50 to 150 of those little ECUs,
those little computers that are open and aggregate providing the software for the vehicle.
But, you know, that architecture is incredibly hard to do updates on. It's very, very difficult to do
cross-platform or cross-domain integrations. It makes the idea of integrating in a deep way
AI into the vehicle and the vehicle experience very difficult, you know,
borderline impossible to do it well. And so our view is every vehicle on the road will need to shift to
a much more centralized compute, where you have more of a zonal architecture. So essentially,
think of it as a large consolidation of all those little computers into a single or a very
small number of large computers that runs a common operating system, and for which the
code base that's running on the vehicle can be very easily updated without coordinating among,
you know, among, let's say, 50 to 150 suppliers. And so that architecture I just described is,
of course, what's in a Rivian vehicle today. It's also the basis of our relationship that we've
forged with Volkswagen Group to deploy that technology. And the first application of that
technology being deployed outside of Rivian as part of our partnership with Volkswagen Group
is going to be in the ID1, which is a EV that will be launched in Europe with a price point
of just over $20,000. And I can't wait for people to buy this car. I'm sure lots of people
will buy it and take it apart and tear it down. And I'm certain they'll be blown away with the
elegance of how we've executed the ECU, I should say the network architecture and the compute
stack topology. And so that's one technology category or one area that we think has a lot of
opportunity to be deployed in other manufacturers. And of course, the proof point that we're
successfully deploying this into a very large established manufacturer within Volkswagen Group
across multiple brands, across multiple price points, different form factors, different geographies
is the proof point or the existence proof that the technology is scalable and that we're capable
of supporting these types of complex deployments. With that said, the other large category of
technology that we see opportunities to have licensing deals is in the autonomy realm. And
here it's in a similar way. It's not just hardware and Sanchez software, it's the two of them
together. So it's the combination of our compute platform that we've developed with this RAP1
in-house inference platform I talked about and the associated computing platform we've designed
around that along with our perception platform. So it's the cameras, radar, LiDAR that exist.
And then very importantly, the large driving model, this foundation model is a neural map
that we've created that defines what driving or how to drive a vehicle. And that's as hopefully
I made it clear before is a much more flexible architecture to deploy into different vehicle
embodiments. And so we're doing that already within Rivian. We'll be deploying that across R&T,
R&S, R2, ultimately our commercial vans, remote taxi applications. But we do see this as a very
scalable technology that can be deployed in many ways. All right, that was a pretty good answer.
It was a good detailed answer. Obviously, the first part of this when he's describing how the
architecture works and how it would benefit not only Rivian but other companies. Obviously,
that's that partnership with Volkswagen. I did not know that the first deployment of this outside
of Rivian was going to be in the ID1 in Europe. So that's cool. Can't wait for people to get their
hands on that and see what they think. The other thing is, you know, Zonal architecture isn't
exactly specifically a new thing for companies who are working on automobiles. You know, Tesla
announced it quite a few years ago. So it's not to say that Rivian's not doing unique and innovative
things. It's just that this isn't a new concept. And, you know, it sounds like they're open to
licensing their autonomy technology. But, you know, I think that Rivian really needs to prove
that their autonomy technology is worth licensing. Licensing, and I don't think we've seen that quite
yet, but we'll see it here in the not too distant future. All right, let's go ahead and get to our
next question. Thank you. Our next question comes from Alex Perry from Bank of America.
Please unmute your line and ask your question. Hi, thanks for taking my question here.
Just one, I guess a little bit further on the RoboTaxi strategy. So you had the Uber deal
announcement. I guess it's a plan to pursue a partnership model for now. Does the deal with
Uber have sort of any exclusivity and how else will you sort of look to tap into this important
market? You know, when you think about the RoboTaxi space as a business, and so putting aside
the technology for a moment, and I should say, and putting aside and recognizing that the technology
for level four in a RoboTaxi or in a personal-owned vehicle is the same, meaning a personal-owned
level four vehicle can't drive or should not drive worse than a RoboTaxi level four vehicle.
They're both very capable of managing the same levels of complexity in the same types of driving
situations. So it's the same tech stack. But when you think of it through the lens of a business
model, the benefit of working to deploy this first with Uber is you have very large density of choice.
And so if you're deploying entirely on your own, you have to build enough vehicles to have in the
fleet or in the car park such that if you're a user, when you say one tablet vehicle available,
it's immediately available, or it's available in a matter of minutes. And so the scale of Uber's
platform and the success they've had in creating a really healthy marketplace really makes them an
ideal partner for us as we think about launching this technology in an R2 to deploy into providing
RoboTaxi services. And as you've heard me say a couple times and we've talked about this in the
past, that technology is going to also underpin a consumer personally-owned variant as well.
And I think we have to recognize that there's going to be lots of innovation around business
model that start to emerge as we have level four. And so if you think of it in a very simple sense,
the two bookends in terms of business model are pure ownership, where the vehicle is dedicated
entirely to your household. And the other end of the spectrum is purely mobility as a service,
where you don't own the vehicle, you're not using the same vehicle every time, but you ask for a
vehicle on a purely variable basis and it shows up. There will be things that emerge in the middle,
and not to be exhaustive here in the types of things, but you can imagine different forms
of sharing vehicles amongst families or within neighborhoods or within apartment buildings.
But there's going to be a very exciting time of innovation in terms of how we think about
consuming mobility or consuming transportation. And with all that said, just recognizing the
trains of miles that are driven today, the vast majority of those are driven in personally-owned
vehicles. And so Robotaxi represents a portion of those, but we think there will be lots of new
models that start to make up the topology of those trains of miles that are driven.
It is, I think, a really good idea for companies like Lucid and Ruby and to be partnering with
companies, rideshare companies like Uber, right? Like Uber already has the name recognition for
ridesharing, but an NLIFT too, but we're going to use Uber in this example since that's who
Ruby is partnering with. But Ruby, our Lucid is, now we're going to screw this all up. Uber has
already built that name recognition. They've already built the platform and they already have
a certain amount of market concentration in a wide variety of places. For a single company like
Lucid or Rivian to start their own Robotaxi network, you're going to see some delays like what
Tesla's experiencing, for instance. So it's not to say that Tesla's not going to be successful
in their Robotaxi efforts, but by partnering with Uber or Lyft, in this case Uber again,
Rivian doesn't have to have a massive fleet in, let's say, Phoenix and a massive fleet in San
Francisco. They can have a smaller test fleet and still get a decent amount of data while not
breaking the bank because Uber has all these other ways to get people from point A to point B
and it's not going to cause a big service interruption. If Rivian came to Phoenix and they
decided to start their own Robotaxi network and they had 10 cars that people could take in Phoenix
and availability was low for people, I don't necessarily think a company like Rivian could
weather that. A company like Amazon with the Zooks could definitely weather it. Amazon's got other
revenue sources. A company like Waymo, same thing. Waymo has other revenue sources. Tesla's in a
little bit of a different position than Rivian because they're a more established brand. But
companies, like I said, like Lucid and Rivian, they don't need to reinvent the wheel, especially
when they're trying to figure out one production for their vehicles, but they're also trying to
figure out this whole autonomy thing and that just takes one more thing off their plate. They get
investment from these companies so that they can use that investment to further develop the
autonomy and they don't have to build a whole platform so just so people can use their vehicles.
So overall, I think it's great that there's the partnership. I don't think I have much to add
beyond that, so let's go ahead and get to our next question. Our final question comes from
James Picciarillo from BMP Paribas. Please unmute your line and ask your question.
So I want to ask about the Uber partnership. Can you share any color on the milestones
that are associated with the four tranches of funding regarding the $950 million in additional
additive liquidity? And it does appear right that one of the tranches is already expected to hit
this year, $250 million.
Yes, as RJ had just mentioned, there are a handful of milestones and the milestone that
we more specifically expect to be in position to unlock. The initial $250 million this year
will be the operation of some Caribbean vehicles in San Francisco and Miami with safety drivers
later this year. And then as you think about the subsequent years, you can think about the
ongoing trajectory towards full deployment in a couple of cities in 2028 and then 25 cities by
2031 that would fully unlock the remaining $700 million of capital from Uber.
Okay, we're getting little bits of information here and there. So I think that's good. I don't
have much to add on it, but it's nice to know. Keep that and store that in the back of our heads
as we find out more about Lucid's partnerships and Uber's partnerships with other organizations
and companies. But so far seems reasonable to me. Let's go ahead and move on to the final question.
Just to maybe level set expectations on automotive gross margins for the second
and third quarters, this quarter was yet again another strong showcasing right of the company's
momentum toward positive auto gross profit. And this is the last quarter before the add-to.
Is there anything you could share for these next two quarters regarding the temporary order of
magnitude impact we can expect to auto profitability?
Sure. As we think about the subsequent quarters of Q2 and Q3, we'll see the introduction and turn
on of both all the depreciation expense, the new manufacturing team that is established that will
be producing the vehicles. But as they're in the process of ramping up the first shift of operation,
we'll see some of the complexity associated with lower volumes on the new R2 line. And so as a
result of those attributes, we do anticipate seeing an impact to our automotive gross profit
over Q2 and Q3 before we start to see the overall benefits of the ramp, not just on the R2's
unit economic profile, but also importantly the fixed cost leverage that we'll see across the R1
program and EDB program overall. So in total, we still anticipate that we'll exit 2026 with a
trajectory of positive automotive gross profit, with that being both R2 as well as total Rivian
automotive gross profit being positive, which is important for us as we go into 27 and really
fully ramp up at the R2 capacity and normal. Okay, that is our final question. I don't really
have anything else to add to that. Seems all very reasonable. Rivian's earnings calls are
or most of the time very measured and reasonable, not a bunch of marketing hype. There was a little
bit of that, but nothing crazy. So overall, I think R2 and the autonomy plus is something that
we're really going to focus on here on this show in the next couple of months. So yeah,
I'm looking forward to seeing what our Rivian does. And if Rivian wants to, I mean, you don't
have to, but if you wanted to let me borrow a car on R2 to test all this out, I'd love to.
Bode, B-O-D-I-E at 918digital.com. This has never worked. I don't do it very often.
There's a reason because it's never worked. But if you're watching this or listening to this,
which is probably not watching it, so shoot me an email. If you would like to comment on today's
show, you can also email me, Bode, B-O-D-I-E at 918digital.com. You can support the show
by going to support Kilowatt.com. You can support the show either through Supercast or Patreon.
That's completely up to you. And all the money that comes through on Patreon goes directly to the
show. None of the money goes into my pocket. The Patreon is what funds most of the show,
but not all of the show. So a big thank you to all of our Patreon and Supercast supporters.
All right, everybody. That is it for me. I hope you all had a wonderful week.
And I will talk to you hopefully on Friday, but it might be on Saturday. We'll see what happens.
Thanks, everybody. Talk to you soon.
Thank you. This concludes the Q&A section of the call. I would now like to turn the call back
to RJ Scurringe for closing remarks. Thanks, everybody, for joining us today.
Hopefully, you can tell we're really looking forward to getting R2s into customer hands.
We're very pleased and excited with the product that we've developed and proud of the team for
the great work that went into creating such a special vehicle. Along with that, we are very
much focused on the development of our autonomy platform. And with that, we'll be starting to
see some of the fruit of that significant effort, as I said, first with our point-to-point capabilities
later this year, and then adding more functionality, more capabilities over the course of 2027 and 28.
And again, thank you, everybody, for joining this call. We're excited for all of you to
hopefully experience an R2 and see them on the road here very soon.
This concludes today's call. Thank you for joining us.
If you liked the show, please take a moment to rate, review, and subscribe. It really does
help the show to grow. Thank you for listening.
About this episode
Rivian’s Q1 2026 earnings call centers on R2’s ramp and cost-down plan, including a claim that R2 production has started in Normal, Illinois and that its bill of materials should be about half of R1. Hosts then walk through Q1 financial drivers (regulatory credits and software/services profitability), 2026 delivery and margin expectations, and funding tied to Georgia expansion. A major thread is autonomy: point-to-point first, Gen 3 sensors later this year, and a path toward level four with LiDAR and a large driving model.
In this episode of Kilowatt, host Bodie breaks down Rivian’s highly anticipated Q1 2026 earnings call, shifting the spotlight from raw financial data to the groundbreaking vehicle technology driving the brand forward. The headline milestone is the official start of saleable R2 production in Normal, Illinois, with early midsize SUVs already hitting the road as employee daily drivers. Listeners will discover how Rivian managed to cut the R2's bill of materials in half through massive structural die castings, an integrated high-voltage electronics enclosure, and a streamlined electrical architecture that strips out miles of heavy copper wiring. The episode also dives into Rivian's massive multi-billion dollar liquidity pipeline from the Department of Energy, Volkswagen, and Uber, which is funding a 50% capacity boost at its upcoming greenfield plant in Georgia. Finally, Bodie details CEO RJ Scaringe’s progressive autonomy roadmap, charting the course from Autonomy Plus subscriptions to Level 4 "eyes-off" consumer vehicles and robotaxis hitting complex urban domains by 2028.
