Episode Details

Rivians Profitability Target Missed: Focus on Self-Driving Tech, Uber Partnership

Rivian, the electric vehicle maker, has missed its profitability target for 2027 due to increased spending on self-driving technology. The companys R&D costs surged to $1.7 billion in 2021, primarily for autonomy projects like a custom large driving model, special processors, and software for hands-off driving.

Investors had anticipated positive earnings by 2027, assuming the R2 SUV launched on time and software sales grew. However, challenges such as the end of federal EV tax credits, fewer regulatory credit sales, and higher tariffs have added pressure. Rivian has accumulated $27 billion in net losses since its inception in 2009.

On a brighter note, Rivian has secured a partnership with Uber, with Uber investing up to $1.25 billion and potentially buying up to 50,000 R2 SUVs for robotaxis. The partnership starts small, with an initial order of 10,000 vehicles, mostly scheduled for delivery after 2030.

Despite the Uber deal, Rivian still faces significant costs, including a new factory in Georgia and R2 production starting soon. The company plans to spend between $1.95 billion and $2.05 billion on capital projects this year.

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