Rivian Automotive Inc and Volkswagen AG Announce Plans for Joint Venture Call Transcript

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

Question: Dan Levy - Barclays US LLC - Analyst : Hi, good evening. Thank you for taking the questions. First, I wanted to ask with the mechanics of the technology and the JV, maybe you can provide us with a sense of going forward, is the intention for Rivian to use its own internal product by yourself, or will you eventually be using technology developed by the JV? Just what's the split of what's going to be done internally? And then second, maybe you could just give us a sense on the JV's efforts beyond you or VW. Is the intention to license this out to possibly others as well?

Question: Dan Levy - Barclays US LLC - Analyst : Great, thanks. And if I could maybe ask a follow up, and I think, Wassym, you just touched on it. Look, I think you've consistently communicated the efforts that you've developed on software-defined vehicles, and a lot of that is internal. And you've done that without really the help of others. Maybe you could give us a sense of what VW is bringing to the table that helps you. I mean, I think the capital benefits are obvious. I think you're alluding here to being able to scale this more broadly. And maybe, how do we address or how do you overcome maybe some of the cultural challenges that sometimes have emerged with other JVs that we've seen? Because the track record on, frankly, automotive JVs and partnerships hasn't been the most stellar if you look at the different JVs and partnerships that we've seen over the years.

Question: Ben Kallo - Robert W. Baird & Co. Inc. - Analyst : Hey, guys. Thank you for taking my question. Congratulations, RJ, and the whole team. Just first on the software, how do we think about all the data that you get as you put it into the JV? Is it the JV that owns the software and after all these miles are driven on different platforms or does Rivian retain any of that is my first question. Thank you.

Question: Chris McNally - Evercore ISI - Analyst : Thanks so much, team. Sorry, the line was breaking up for some of us. I apologize if it's a repeat question. But can you just talk about maybe how this may change the line of sight on Georgia? Some of the initial comments you talked about funding into free cash flow positive. And RJ, as you mentioned, this doesn't affect the actual vehicle platforms. So should we just think of this as a separate funding aspect thinking about R3 and Georgia or are the two more tied in a way we're not thinking about?

Question: Joseph Spak - UBS Equities - Analyst : Thanks so much, everyone. Congratulations. I guess my question is -- I just want to be clear. All future electronic architecture and software will be designed and developed within the JV, or is Rivian still going [to do it]? Is Volkswagen contributing any (technical difficulty) besides the capital? And then just based on the timing of the funding to the JV, is it fair to assume that you're spending about $0.5 billion a year annually on such initiatives?

Question: Mark Delaney - The Goldman Sachs Group, Inc. - Analyst : Yes, good afternoon. Thanks for taking the question, and congratulations on reaching the preliminary agreement. I was hoping you could speak in a bit more detail on how the JV will fund itself over the longer term. I understand the investments coming from VW, but will Rivian need to make payments to the JV in order to use the technology the JV will develop? And then over time, would you envision Rivian making any capital contributions to the joint venture?

Question: Tobias Beith - Redburn Atlantic - Analyst : Hi, good evening. Thanks for taking my question. I was wondering if you could perhaps describe how Rivian has calculated the future value of the IP injected into the JV. I guess, from my rough math, $3 billion paid up might be equivalent to royalty income from the sale of 2 million units, which whilst a large figure in absolute terms, probably only covers production from Volkswagen for a couple of years.

Question: James Picariello - BNP Paribas Exane - Analyst : Hi, everybody, and congrats. My apologies, the connection kind of cut out earlier. So if this was already asked, again, my apologies. But just on the scaling, the potential scaling benefit of the purchasing of the hardware for the electrical architecture that the JV will provide, can you just kind of help us unpack, think about what those scaling benefits could look like in terms of the hardware side of purchasing? Thanks.

Question: George Gianarikas - Canaccord Genuity Group Inc. - Analyst : Hi, everyone, and thank you for taking my questions. You mentioned earlier that a few things will remain distinctly Rivian, including obviously the aesthetics, the battery, the autonomous platform, propulsion. I was wondering, how did the two companies land on electric architecture and software to be the two areas that you'll jointly develop in the future? Thank you.

Question: Shreyas Patil - Wolfe Research, LLC - Analyst : Hey, thanks so much for taking my question. I just wanted to understand, I think in the release, it mentioned that VW would gain access to Rivian's existing electronic architecture upon establishment of the joint venture. So I just wanted to understand what they would be able to access? And just on the last point you made, RJ, it seems that what you already have in the now-refreshed R1, it sounds like a lot of that is going to be carried over into the joint venture. And it's really more about applying it to lower-cost vehicles. But in that interim, is VW going to be able to essentially take what you already have on the R1 and deploy it into any of their vehicles ahead of that?

Question: Ron Jewsikow - Guggenheim Securities, LLC - Analyst : Yes. Good afternoon and thanks for taking my questions. I believe you mentioned the potential for this to scale to other OEMs. I guess, just mechanically, would those hypothetical other OEMs buy into the current joint venture, or would they buy product from the joint venture as prospective customers? And just a point of clarification, I guess, the ultimate intent of this joint venture, is it to be self-funding or profit seeking post the capital infusion or is this just kind of a co-development mechanism? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JUNE 25, 2024 / 10:00PM, RIVN.OQ - Rivian Automotive Inc and Volkswagen AG Announce Plans for Joint Venture Call