Rivian has made significant strides towards profitability through its cost-cutting strategies. However, the company foresees potential challenges in 2025, largely due to the uncertainties brought about by the new Trump administration.
On Thursday, Rivian revealed its financial results for the fourth quarter and full year of 2024, alongside its plans to deliver between 46,000 and 51,000 electric vehicles in 2025. The company indicated that alterations in government policies, regulations, and a potentially demanding environment could influence these figures, as stated in its shareholder letter accompanying the results.
Although Rivian did not provide specifics, Trump hinted during his campaign about potentially eliminating the $7,500 federal electric vehicle tax credit. Vivek Ramaswamy, a Trump administration ally, has proposed revoking a $6.6 billion loan from the Department of Energy meant for a plant construction in Georgia. This loan was finalized just days before Trump’s inauguration.
Claire McDonough, Rivian’s chief financial officer, expressed on a conference call on Thursday that the company is eager to collaborate with the new administration and the Department of Energy regarding their loan. She disclosed that Rivian is prepared to face a financial blow amounting to “hundreds of millions” of dollars due to tariff-related matters, potential loss of electric vehicle credits, and other policy changes.
Rivian CEO RJ Scaringe echoed McDonough’s sentiments, stating that the company is in alignment with the administration’s vision for the U.S. to remain a global leader in key areas such as electronics, software, autonomy, and artificial intelligence.
Rivian’s Fiscal Prudence
Throughout 2024, Rivian implemented rigorous cost-cutting measures. These included laying off 10% of its workforce in February and introducing more economical versions of its flagship electric vehicles — the R1T pickup and the R1S SUV — in June. The company altered 600 parts on these vehicles to reduce manufacturing costs while also overhauling its electric infrastructure and software user interface.
Such modifications contributed to Rivian’s $170 million positive gross profit in the last quarter of 2024, $60 million of which originated from software and services.
Rivian posted a revenue of $1.7 billion for Q4, marking a 32% increase from the same period in 2023. The majority of its Q4 revenue — approximately $1.5 billion — was derived from the sale of 14,183 vehicles and $299 million from the sale of zero-emissions regulatory credits to automakers. For the year, Rivian generated $325 million in revenues from the sale of regulatory credits.
Revenue from software and services, which amounted to $214 million in Q4 and $484 million for the entire year, is becoming increasingly significant. A substantial portion of Rivian’s future is also hinged on its software, particularly through a profitable joint venture with Volkswagen Group.
According to Rivian, software revenue is primarily driven by charging and subscriptions fees, repair and maintenance services, and new vehicle electrical architecture and software development services provided by the joint venture.
Rivian Embraces Generative AI
Rivian has adopted generative AI as a means to streamline customer service and cut costs. The intention is to use AI to automate processes and “significantly reduce administrative overhead on all non-repair tasks,” as stated in the company’s shareholder letter.
In practice, this involves an AI assistant or chatbot integrated into the Rivian app. A beta version was introduced in the Rivian mobile app for R1 customers in December.
The AI assistant, built using a combination of in-house AI agent infrastructure and third-party large language models, is designed to answer service needs and general vehicle-related queries, perform basic troubleshooting, and collect necessary information for service.
Additional information from Rivian’s quarterly earnings call has been incorporated into this story.
