Rivian (RIVN) unveiled its updated R1 pickup and SUV, with enhanced features and new drivetrains aimed at making its electric vehicles cheaper to build.
The R1T pickup and R1S SUV maintain their distinctive exterior design. Most of the changes are done under the hood as well as with software. The biggest changes come with its electric drive units; the Rivian-built dual-motor remains as the base configuration, but now the EV maker is also offering its own motors for a new tri-motor setup as well as the range-topping quad-motor drivetrain.
The electric drive units in the prior quad-motor setup came from German supplier Bosch; motors for that and the new tri-motor setup will now be built by Rivian. The company says the quad-motor R1T now offers 1,025 horsepower and a 0-60 mph time of 2.5 seconds. The prior version with Bosch motors had an output of 835 hp and could do 0-60 mph in 3 seconds.
“We continue to evolve our flagship R1 vehicles, offering quality and performance without compromise. Our revamped R1S and R1T push the technical boundaries further, creating our most capable products to date,” Rivian CEO RJ Scaringe said in a statement.
Rivian also said its large and max battery packs have redesigned modules and new “more efficient” packaging, which the company says makes them easier to manufacture and service and offers up to 420 miles of range, an increase of 10 miles.
Rivian is also offering new battery chemistry with a cheaper lithium iron phosphate (LFP) standard battery pack, with an EPA-estimated 270 miles of range. Rivian is also offering a heat pump as well, which aims to cool and heat the vehicle more efficiently.
On the software and autonomy side, the company is now offering an enhanced self-driving system with 11 cameras, five radar sensors, and “AI prediction technology.” Rivian said the system’s computer module is 10 times more powerful than before.
The company is also reducing the number of control units, removing 1.6 miles of wiring.
Rivian said the entry-level dual-motor R1T will start at $69,900 and the R1S will start at $75,900. Tri-motor max battery pack setups will cost $99,900 and $105,900, respectively, with quad-motor pricing to come at a later date.
The importance of R1 improvements (and cost savings)
Nearly three years after the delivery of its first R1T pickup, the timing was right for Rivian to do a mid-cycle refresh of its lone product, generally done every three to four years in the automotive world.
The changes in performance and the feature set will likely be welcomed by Rivian customers; however, most important for the company are improvements in costs and its bill of materials for building these vehicles. Rivian shut down its Normal, Ill., factory for four weeks to make improvements to its processes and build out the needed architecture to make the new R1 vehicles.
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During its first quarter earnings report, Rivian reaffirmed its adjusted EBITDA loss forecast of $2.7 billion for 2024 but now sees its capital expenditure outlays improving to $1.2 billion from $1.75 billion seen earlier.
The company also said at the time that as a result of its retooling upgrade and other improvements, Rivian remains “confident in its path to achieving modest gross profit in the fourth quarter of this year.”
However, speaking at last week’s Bernstein conference, CEO RJ Scaringe warned that the second quarter results would be “messy” as the factory shutdown will impact Q2 earnings and deliveries. But new supplier contracts and the production upgrades at the factory will lower Rivian’s bill of materials through 2025.
Currently Rivian’s loss per vehicle sits at $38,784 through Q1, meaning achieving gross profit or variable positive gross profit would be a welcome improvement for the company.
Given the company’s cash burn, Wall Street is focused on any improvements in costs as the company looks to bridge to its next product, the release of the smaller R2 vehicle in 2026.
“Even if Rivian is successful at making R1 economics positive, it will still need to make material additional progress on lowering its bill of materials and cost structure between now and its first R2 deliveries in 1H26,” Deutsche Bank analyst Emmanuel Rosner wrote shortly after Rivian’s Q1 earnings release in May. Rosner currently has a Hold rating and $10 price target on the stock.
Rivian CFO Claire McDonough will likely give more updates on cost structure and gross profit forecasts at next week’s Deutsche Bank Autos conference in New York City on June 11-12, 2024.
Pras Subramanian is a reporter for Yahoo Finance. You can follow him on Twitter and on Instagram.
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