Rivian (RIVN) has unveiled its updated R1 pickup and SUV, with improved features and new powertrains aimed at making its electric vehicles cheaper to manufacture.
The R1T pickup and R1S SUV maintain their distinctive exterior design. Most of the changes are done under the hood as well using software. The biggest changes come with the electric drive units. The Rivian-built dual motor remains the base configuration, but now the electric car maker is also offering its own motors for the new three-motor setup in addition to the range-topping four-motor powertrain.
The electric motor units in the previous quad-motor setup came from German supplier Bosch; Engines for that and the new three-motor setup will now be built by Rivian. The company says the four-motor R1T now delivers 1,025 horsepower and 0-60 mph acceleration in 2.5 seconds. The previous version with Bosch engines had 835 hp and could accelerate from 0 to 60 mph in 3 seconds.
“We are continuing to evolve our flagship R1 vehicles, delivering quality and performance without compromise,” RJ Scaringe, CEO of Rivian, said in a statement. “The redesigned R1S and R1T push the technical boundaries even further, creating our most capable products yet.”
Rivian shares rose 2.5% in midday trading.
Rivian also said its Larger and Maximum battery packs have redesigned modules and new “more efficient” packaging, which the company says makes them easier to manufacture and service and provides a range of up to 420 miles, an increase of 10 miles.
Rivian is also introducing new battery chemistry with a cheaper standard lithium iron phosphate (LFP) battery pack, with an EPA-estimated range of 270 miles. Rivian now includes a heat pump as well, which aims to cool and heat the car more efficiently.
On the software and autonomous driving side, the company now offers an enhanced autonomous driving system equipped with 11 cameras, five radar sensors and “AI prediction technology.” Rivian said that the system's computer unit has become ten times more powerful than before.
The company is also working to reduce the number of controllers, eliminating 1.6 miles of wire.
Rivian said the entry-level dual-motor R1T will start at $69,900 and the R1S will start at $75,900. Maximum triple-motor battery pack configurations will cost $99,900 and $105,900 respectively, with prices for the quad-motor TBD.
The importance of R1 improvements (and cost savings)
Nearly three years after delivering the first R1T pickup, the timing was right for Rivian to do a mid-cycle refresh of its only product, which is generally done every three to four years in the automotive world.
The changes in performance and feature set are likely to be welcomed by Rivian customers; However, what is more important to the company are the improvements in costs and bill of materials needed to build these vehicles. Rivian closed its factory in Normal, Illinois, for four weeks to make improvements to its operations and build the infrastructure needed to make the new R1 vehicles.
During its first-quarter earnings report, Rivian reiterated its revised EBITDA loss forecast of $2.7 billion for 2024, but is now seeing capital expenditure expenditures improve to $1.2 billion from $1.75 billion earlier.
The company also said at the time that as a result of the retooling upgrade and other improvements, Rivian remains “confident on its path to achieving modest gross profit in the fourth quarter of this year.”
However, while speaking at a Bernstein conference last week, CEO RJ Scaringe warned The second-quarter results will be “messy” because the plant closures will impact second-quarter earnings and deliveries. But new supplier contracts and production upgrades at the plant will lower Rivian's bill of materials through 2025.
Rivian's loss per vehicle currently stands at $38,784 during the first quarter, meaning a positive gross profit or variable gross profit would be a welcome improvement for the company.
Given the company's cash burn, Wall Street is focused on any cost improvements as the company looks to move on to its next product, the launch of the smaller R2 vehicle in 2026.
“Even if Rivian succeeds in making the R1 economics positive, it will still need to make material additional progress in reducing its bill of materials and cost structure between now and delivery of the first R2 shipment in the first half of 2026,” Emanuel Rosner, an analyst at Deutsche Bank, wrote afterward. A brief excerpt from the Rivian ad. First quarter earnings release in May. Rosner currently has a Hold rating and a $10 price target on the stock.
Rivian CFO Claire McDonough will likely provide further updates on its cost structure and gross profit outlook 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 it Twitter and on Instagram.
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