RIVIAN: Surviving 2025, Can the R2 Achieve a 'Comeback Against All Odds'?
$Rivian Automotive(RIVN.US) released its Q1 2025 earnings report after US market close on May 6, 2025. Key takeaways:
1) Solid Q1 performance with revenue beat: Total revenue reached $1.24B vs. market expectation of ~$1B, a $250M positive surprise. The beat came from both vehicle revenue ($160M above expectations) and software/services revenue ($100M above expectations).
2) Gross margin reached low-teens with sequential improvement: Q1 gross margin hit 16.6%, entering low-teens territory (up 7pp QoQ) - completely opposite to market's expected negative low-teens (-13.5%). (See full report for detailed explanation of this massive gap)
Dolphin Research attributes this to: ① Continued improvement in vehicle gross margin (up 6pp to -15% this quarter); ② Pure-profit contribution from Volkswagen's software partnership.
3) Terrible guidance fuels market concerns: Management cut 2025 delivery guidance to 40-46k vehicles (+$100M capex) amid tariff headwinds, making 2025 - already a "no-catalyst" year - even tougher.
Dolphin Research's view:
While Rivian showed operational improvements this quarter, market focus remains on 2025 challenges - especially tariff impacts. With no new models until R2's 2026 launch, high-price positioning (~$90k ASP), IRA credit risks, and Normal factory retooling disruptions, 2025 looks bleak.
Tariff impacts:
① $3k+ BOM cost increase (batteries from CATL/Samsung); ② Supply chain risks (LG 4695 batteries through 2027, rare-earth motor constraints); ③ Guidance cuts (deliveries -5k, capex +$100M).
Silver lining: $7.2B cash + $1B Volkswagen investment (June close) provides runway to R2 production. But DOE's $6.6B loan uncertainty looms.
At 3x 2025 P/S, Rivian isn't cheap. With no catalysts and mounting risks, Dolphin Research sees limited upside currently.
Details:
I. Good Earnings, Bad Guidance
1. Revenue beat from vehicles + software
$1.24B revenue ($250M beat): Vehicle ASP hit record ~$90k; Software revenue reached $300M (~$200M Volkswagen contribution).
2. Gross margin surprise
16.6% gross margin (vs. expected -13.5%) from: ① Vehicle margin improvement to -15%; ② 36% software margin (pure-profit Volkswagen deal).
3. Auto margin still negative but improving
Ex-regulatory credits: -8.5% (credits contributed $160M). True vehicle margin: -15% (+6pp QoQ).
Per-unit economics:
ASP: +$2.5k QoQ to $89k (model mix); Cost: -$2.7k to $102k (depreciation accounting + material savings). Net loss per vehicle: -$13k (improved $5k QoQ).
II. Awful 2025 Guidance
Delivery guide cut to 40-46k (-5k); Capex +$100M. Additional risks: ① Potential DOE loan cancellation; ② IRA credit repeal; ③ CARB authority loss.
III. Cash Runway to R2
$7.2B cash + $1B Volkswagen funding supports operations through R2 launch. But $6.6B DOE loan uncertainty remains key risk.
Related Research:
[Previous reports and disclosures listed with English titles]
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