Rivian Automotive Inc Q4 2024 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Dan Levy - Barclays - Analyst : Hi, good evening. Thank you for taking the questions. First, I wanted to start with a question on your assumptions for policy. You said you're embedding here your best guess on what the policy shift is. Could you just outline what exactly you are assuming on tariffs, credits, etc.

Question: Dan Levy - Barclays - Analyst : Okay, thank you. Second question is on COGS trajectory and really two parts here. One is maybe you could just outline what trajectory of R1 COGS we should expect over the course of the year. Can we expect by the end of the year COGS per unit to be roughly equal to ASP per unit? And how much of this should be an indication that you have the line of sight to achieve, the bomb that you need and the COGS that you need on R2, which I think RJ you mentioned, you're at 95% sourcing. So any color on the COGS trajectory and how this gives you a line of sight on R2, please. Thank you. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 20, 2025 / 10:00PM, RIVN.OQ - Q4 2024 Rivian Automotive Inc Earnings Call

Question: Adam Jonas - Morgan Stanley - Analyst : Hello everybody. Hi. I wanted to ask about the Rivian autonomy platform where you really have a pretty major change of strategy moving to end to end 10 times the compute, the enhanced sensor suite as well. So I'm just curious in those moves, can you tell us how much you're spending on the compute and training, what are you doing in-house, how much are you doing with partners, and I'm curious how much of the forward R&D, or OpEx and CapEx is allocated towards AI infrastructure and training, as you use your proprietary data and press your leadership there.

Question: Adam Jonas - Morgan Stanley - Analyst : I appreciate that. I think people on this call will be listening very carefully to the Nvidia GTC sessions as well. This is a follow up question on the Software and Services segment that's really helpful that you break it out and perhaps you can opportunities to follow up. But Claire, can you confirm whether, let's say relative to the $300 million or so that you recognized in 2024, whether you have, but at first if you included any in your assumptions for 2025, or could you tell us, is it similar or higher or lower? And then the joint venture revenues, from the electrical architecture, I know it falls a kind of a scale of spooling up as you pass through time of the $2 billion. I don't know if you could give us any details to how much was included in the fourth quarter and kind of how that scales up over the course of the year. Thanks.

Question: Adam Jonas - Morgan Stanley - Analyst : Correct. Yes, thank you.

Question: Mark Delaney - Goldman Sachs - Analyst : Yes, good afternoon. Thanks for taking the questions. I'll follow up on the Rivian Autonomy platform and great to see the profits the company is now generating from -- (technical difficulty) Taking the question. I had a follow up tied to the autonomy platform and really nice to see the Software and Services profits coming through and learn more about all Rivian's is doing with AI to further improve the features going forward. I did want to double click on the economics of that has been a pretty topical item within the financial community and wanting to get your latest views around to what extent you think Rivian can charge for these products going forward and we've seen in China, some of the hands-free products are being sold on vehicles at pretty low prices and you know what's your view about your ability to monetize this and especially as you get to level 3 and hopefully give people time back, do you think that can become a meaningful business driver for Rivian?

Question: Mark Delaney - Goldman Sachs - Analyst : Very helpful, RJ. My second question was a follow up around the $1.96 billion of proceeds from the JV that you'll be recognizing over about four years. Can you help us better understand the gross profit implications of that incremental revenue as it flows through?

Question: George Gianarikas - Canaccord Genuity - Analyst : Hi everyone, thank you for taking my questions. Maybe, I'd like to understand a little bit more about the quarterly cadence you expect around deliveries in 2025. You mentioned, the first quarter would be about 8,000. Any color as to what exactly you plan to bring down the lines? Is it Q3 or Q4 and how should we expect the year to progress? Thank you.

Question: George Gianarikas - Canaccord Genuity - Analyst : Thank you, and maybe as a follow-up any comment on the DOE loan and the uncertainty in (technical difficulty)

Question: John Murphy - Bank of America - Analyst : Good evening, guys. Claire, I just wanted to -- just one quick question on the gross profit year-over-year and I just want to make sure I understand it, correctly and if there are any other pieces in the building blocks. But starting from about $1.2 billion negative in '24, you got volumes flat to

Question: John Murphy - Bank of America - Analyst : Okay, that's helpful. And then just a second question, it's tough for us to tell externally, but you know we're going to be looking at a year and '25 where volumes are flat to down. A lot of that seems like it's going to be driven to some degree from capacity constraints and changeovers. But if you think about '26, is there any reason to think that the R1 and the commercial van can't grow volume or I mean, how are you thinking? I know it's a little bit, sort of presumptuous to ask you about '26 already. But I mean, looking at that flat year, I think some skeptics might say, hey, listen, the R1 and the commercial van are at their run rate levels and any growth is going to come from R2, R3 over time and these products are where they are. But an optimist would say, hey, listen, it's my ramps up, you might be able to take pricing down over time and offer even better value to the consumer that that the volumes could go up significantly. Which end of the spectrum do you think is right or is it kind of down the middle?

Question: Shreyas Patil - Wolfe Research - Analyst : Hey, thanks so much for taking my question. I appreciate the incremental color you provided on the Software and Services part of the business, and maybe if we just put aside the VW agreement, I was wondering, RJ, if you can give us a sense of how you're thinking about the revenue opportunity there. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 20, 2025 / 10:00PM, RIVN.OQ - Q4 2024 Rivian Automotive Inc Earnings Call Any insights you can provide on the kind of take rates you're seeing on Connect+. How you see adoption of the ADAS platform over the next few years or the services market opportunity, and maybe, Claire, if you can just remind us what the long-term gross margin potential here is.

Question: Shreyas Patil - Wolfe Research - Analyst : Okay, great. And maybe just one follow up. Thinking about the 2027 targets that were provided at the Analyst Day. Number one, just wanted to confirm those numbers did not include any benefit from the Volkswagen deal, so in theory, that would be incremental. And then, also how to think about if we do see an IRA repeal, was the benefit of the $7500 credit embedded in your kind of pricing assumptions around R2?