Investors knew 2025 wasn't set up to be overly kind to Rivian (RIVN +8.04%). The automaker, which had exited 2023 with as much momentum as any young electric vehicle (EV) maker, has seen waning demand for its R1 vehicles and doesn't have another vehicle launch until the R2 in 2026. To make matters more uncertain, the administration's removal of the $7,500 federal tax credit for EV purchases sent demand surging in the third quarter but reeling in the fourth.
Amid all of this, Rivian just reported a mixed third quarter. Let's sort through the details and highlight the number that sent its stock soaring 23% Wednesday.
Image source: Rivian.
By the numbers
Rivian posted a solid third quarter to be sure, but the top and bottom lines were more of a mixed bag than the stock's 23% increase would suggest. Rivian reported a per-share loss of $0.96 from sales of $1.6 billion. That was a better top-line result than Wall Street estimates of $1.5 billion in revenue but fell short of bottom-line estimates calling for a per-share loss of $0.88.
"While we face near-term uncertainty from trade, tariffs, and regulatory policy, we remain focused on long-term growth and value creation," Rivian CEO and founder RJ Scaringe said Tuesday in the company's shareholder letter.
A strong September for EV sales helped drive the third quarter result for Rivian. Rivian sold 13,201 vehicles during the third quarter which was good enough for a 32% gain over the prior year, although as you can see in the graph below, the results remain a bit stagnant over the long term.
Data source: Rivian press releases. Image source: Author.
Going forward, Rivian is likely headed toward a more bumpy fourth quarter. Using Ford Motor Company (F 0.34%) as an example, as it breaks out sales monthly and per model, Ford's September EV sales jumped 85% compared to the prior year. But as demand dried up after the tax credit's removal, Ford's EV sales dropped 25% in October compared to the prior year. Rivian and other pure-play EV makers are likely to see similar demand trends.
However, the critical number that certainly helped drive Rivian's stock higher was the company's gross profit. Gross profit is a metric closely watched by investors and is a key indicator of a company's profitability before operating expenses, interest, and taxes. Rivian posted $24 million in gross profit, which was far better than Wall Street estimates calling for a $64 million loss, according to Barrons.
Diving a little deeper, Rivian's gross profit figure included a $130 million loss in its automotive operations -- which was still a significant $249 million improvement from the prior year -- which was entirely offset by $154 million from its Volkswagen joint venture and software and services.
NASDAQ: RIVN
Key Data Points
The road ahead
Rivian exited the third quarter with $7.7 billion in total liquidity, which was largely $7.1 billion in cash, cash equivalents, and short-term investments that has the company well-positioned for the R2 launch next year. Management also maintained its previously lowered full-year guidance that includes an adjusted earnings loss between $2 billion and $2.25 billion, vehicle deliveries between 41,500 and 43,500, and around breakeven for gross profit.
Another positive tidbit for the road ahead was that management doesn't expect uncertainty surrounding rare-earth minerals or chips from China to delay critical production of the upcoming R2. For investors, the third quarter was solid, and its gross profit was certainly encouraging. Everything is on track exactly as expected, now the company just has to execute the R2 launch and hope that EV demand returns sooner, rather than later.
Rivian remains a high-risk and volatile stock, as Wednesday showed once again, and investors should limit such investments to small positions in their portfolio.
