Rivian CEO: 2027 will be a “year of transition” with R2 and increased autonomy

Five years have passed since then. Rivian Automotive CEO and founder RJ Scaringe rang the Nasdaq opening bell to celebrate the company’s initial public offering at the company’s factory in Normal, Illinois, as the company’s sleek vehicles sat outside the Stock Exchange in Times Square.

It was a happy time for all-electric car companies, but they have since fallen into decline. And just like the EV hype, Rivian stock is down more than 80% since 2019. AmazonThe company, backed by , listed on the Nasdaq on November 10, 2021 at $78 per share. This includes a nearly 30% decline this year.

Although various internal and external factors have contributed to Rivian’s stock price decline, the company remains the most promising EV maker to emerge in the early 2020s, as most of the peer groups that will go public in the early 2020s no longer exist.

Rivian founder and CEO RJ Scaringe acknowledged that not everything has gone to plan amid supply chain shortages, geopolitical tensions and slower-than-expected consumer EV adoption, but said he believes next year will be a catalyst for the company and investors.

“2027 is really a transformational year for us,” Scaringe told CNBC in an exclusive interview. “We are excited to start demonstrating what we fully believe is the potential of our business.”

Scaringe’s bullish stance comes as Rivian ramps up production of its R2 midsize SUV with the aim of expanding the brand into the mainstream market, and as the company continues to invest in next-generation vehicle software and autonomy.

“That’s going to define the business. The path to profitability, the path to significant revenue growth, is all built around R2, and then some variations on R2,” Scaringe said.

Rivian said cost of goods sold per vehicle recently improved by more than $12,000 sequentially due to increased R2 mix and improved fixed cost leverage.

Rivian is also building a new multibillion-dollar factory in Georgia, which Scaringe said is needed to achieve the production volumes needed to reach a net profit.

Its only plant in Normal, Illinois, can produce 215,000 vehicles annually. This includes up to 155,000 R2s, along with R1 models and electric vans. Rivian said the Georgia factory will be able to produce up to 300,000 units a year once initial construction is completed by the end of 2028.

Of course, all of this means additional capital investment and pressure to improve profits.

“We decided to simultaneously increase profitability and invest in our technology, especially autonomy,” Scaringe said.

Although Rivian’s performance is improving, several Wall Street analysts expect the company’s investment requirements to increase significantly in 2027.

Rivian had a consolidated gross profit of $176 million in the third quarter, while its automotive business posted a gross profit of $80 million and its software and services segment generated a gross profit of $256 million at a 42% margin.

Wall Street analysts generally agree that Rivian’s R2 launch signals early demand boost and lower manufacturing costs, but are concerned about whether it can offset higher autonomous spending, a Georgia factory expansion and continued cash burn.

Uber Additionally, the company received a $4.5 billion loan from the U.S. Department of Energy for its Georgia plant.

Rivian said it had $5.5 billion in cash, cash equivalents and short-term investments at the end of the third quarter.

The company may need to raise further capital.スカリンジ氏は、リビアンはこれまでフォルクスワーゲンやウーバーとの株式取引を含めた追加資本調達については「日和見的」になるつもりだと述べた。

The company has significantly upgraded its vehicles’ software features and hardware to prepare them for what Scaringe calls autonomous driving technology, or physical artificial intelligence.

The next step is the release of a “point-to-point” driving feature that allows the vehicle to travel from destination to destination on its own, with the driver acting as a lookout in case of unexpected problems.

US EV leader tesla is currently the only automaker to offer these features in its vehicles.スカリンジ氏は、リビアンはテスラの能力に追いつくだけでなく、複数のセンサータイプを使用して、特に悪天候時に車両の「視認性」を向上させるため、それを超えることを計画していると述べた。

Over the coming weeks and months, point-to-point is expected to be rolled out first to employees and then to customers, with self-driving cars by Uber expected to follow by 2028.

Scaringe said he believes these technologies will be a differentiator for the company in the coming years.

ファクトセットがまとめたアナリストの予想によると、リビアン株は現在、目標株価17.70ドルでオーバーウエートと評価されている。 That’s an increase of about 26% from Monday’s closing price, but still a long way from an IPO.