Rivian's investor day emphasizes cost savings, improvements, and cutting-edge electric vehicles.

• Despite a Thursday investor event for Rivian that emphasized cost-cutting efforts, efficiency gains, and in-house technologies, the company's significant share growth this week did not continue.
• On Wednesday, Rivian's shares gained 23.2%, but this was later offset by a 2% to 6% decline in share prices, resulting in a net loss for the company.
• Rivian has confirmed its 2024 guidance and disclosed plans to achieve positive adjusted earnings before interest, taxes, depreciation and amortization by 2027.

Despite a Thursday investor event that emphasized cost-cutting efforts, efficiency gains, and in-house technologies and software, the company's significant share growth this week did not continue.

The all-electric vehicle startup's shares were down by approximately 2% to 6% during the event, which reduced some of its 23.2% increase in shares on Wednesday following the announcement of an up to $5 billion investment by . Despite this, the company's shares are still off by about 40% this year due to significant cash burn and a slowdown in EV sales.

Rivian has confirmed its 2024 guidance, which includes producing 57,000 vehicles and achieving positive gross profit in the fourth quarter, including regulatory credits. Additionally, the company has outlined long-term growth plans, such as aiming to achieve positive adjusted earnings before interest, taxes, depreciation and amortization in 2027.

"RJ Scaringe, CEO of Rivian, emphasized the urgency of the company's progress during a recent event. He stated, "I hope you're seeing an extreme sense of urgency in everything that you're hearing from us, around our product, around how we're running the business, around how we're driving towards profitability." Scaringe added, "We're very fast driving towards the improvements necessary to achieve positive free cash flow and positive margins this year.""

Rivian announced long-term financial goals, including a 25% gross margin, 10% free cash flow, and an adjusted profit margin in the "high teens." The company did not specify a timeline for achieving these targets.

During his four-hour presentation, Scaringe focused on discussing the company's product and manufacturing efficiencies, which he claimed would result in 20% material cost reductions in current vehicles and 45% targeted reductions in upcoming "R2" vehicles, set to begin production in early 2026.

The company has achieved significant cost savings in various areas, including a 54% decrease in design costs for its R2 vehicles and a reduction of 10 in-house electronic control units (ECUs) in its recently redesigned R1 vehicles, resulting in 1.6 miles less wiring harness length and 44 pounds less weight.

VW's plans to invest $5 billion in Rivian by 2026 center on the automaker's software expertise, with an anticipated joint venture between the companies to develop electrical architecture and software technology.

According to Scaringe, Volkswagen will utilize Rivian's electrical architecture and software stack for vehicles in the second half of the decade. However, the joint venture does not involve battery technologies, vehicle propulsion platforms, high voltage systems, or autonomy and electrical hardware.

Claire McDonough, Rivian's CFO, confirmed on Thursday that the funds from Volkswagen would bolster the company's balance sheet, which had $7.9 billion in cash at the end of the first quarter.

Rivian's production of its smaller R2 SUVs and midsize EV platform will be funded by the anticipated capital influx, which will begin in 2026 at its plant in Normal, Illinois, and the paused plant in Georgia.

Rivian's next-generation all-electric vehicles are crucial to the automaker's growth and profitability in the second half of this decade.

The EV startup announced on Thursday that it anticipates that the production of its R2 next-generation vehicles will account for up to 72%, or 155,000 units, of its more than 200,000-unit production capacity at its current plant in Illinois. The plant is capable of producing 150,000 commercial delivery vans, in addition to its flagship "R1" SUV and pickup EVs.

The Georgia plant of the automaker, which was halted earlier this year to conserve funds, is predicted to produce 400,000 units on two lines.

The company's plans to reduce planned capital expenditures by $2.5 billion through 2025 include a major part of pausing the plant, with reductions of 55% in manufacturing and 20% in product development. Despite this, the company still expects to spend about $2.7 billion through 2025, McDonough said Thursday.

"We have prioritized reducing the overall cost of goods sold and operating expenses while also focusing on capital expenditures (Capex) as a key lever for our long-term success in bringing and scaling our R2 product in the market."