Overall, $Rivian Automotive(RIVN.US) delivered a disappointing performance in the third quarter, with both revenue and gross margin falling short of market expectations.

From the revenue perspective, although the average selling price (ASP) per vehicle increased slightly quarter-on-quarter, the increase was not significant, with the ASP rising only $3,000 to $86,000, below the market expectation of $90,000;

the market believes that the increase mainly comes from the delivery of the 2025 R1 series starting this quarter:

① The starting price of the 2025 R1 series will be higher (e.g., R1S);

② In the second quarter, discounts were given to clear the inventory of the first-generation R1 vehicles. It is expected that inventory sales will decrease in the third quarter, with the 2025 R1 starting sales in the third quarter.

③ The 2025 R1 series has launched max/large battery versions and three-motor versions, improving the sales structure.

However, according to Dolphin, the production sequence of the second-generation R1 is: first the standard version (low-priced LFP version), then the large battery version, while the three-motor version will not begin production until the end of the third quarter and the beginning of the fourth quarter, so the proportion of high-priced R1 series in this quarter is relatively low.

Moreover, the gross margin this quarter also fell short of expectations. The market believed that the gross margin could improve quarter-on-quarter to -33.5% due to cost reductions brought by the upgraded R1, but the actual gross margin this quarter was only -45%.

However, when excluding LCNRV adjustments and one-time impacts, the actual gross margin improved from -52% in the third quarter to -46% this quarter, mainly due to the increase in unit price and the decrease in variable costs. However, after delivering the 2025 R1 aimed at cost reduction this quarter, the extent of the decrease in variable costs was still relatively small, below Dolphin's expectations.

What raises doubts for Dolphin is that RIVIAN still emphasizes the plan to achieve positive gross margin in the fourth quarter of 2024. Despite having delivered some 2025 R1s in the third quarter, RIVIAN's actual gross margin remains -46%. Dolphin believes that especially after RIVIAN lowered its full-year production expectations due to supply chain issues, it will be difficult for RIVIAN to achieve gross margin breakeven in the fourth quarter, which also raises doubts about the execution capability of RIVIAN's management.