1 00:00:00,080 --> 00:00:03,159 Speaker 1: Rivian CEO R. J. Scarring, Good to see you. Congratulations 2 00:00:03,160 --> 00:00:06,560 Speaker 1: on a strong quarter. Look, I've been pouring over the data. Right. 3 00:00:07,160 --> 00:00:12,000 Speaker 1: Production jumped fifty per quarter on quarter, Deliveries jumped sixty 4 00:00:12,000 --> 00:00:15,800 Speaker 1: percent quarter on quarter, But you raised guidance by two 5 00:00:15,880 --> 00:00:20,439 Speaker 1: thousand units, which is less than than five percent. Why 6 00:00:20,480 --> 00:00:24,400 Speaker 1: were you not able to raise guidance to a higher degree. 7 00:00:26,600 --> 00:00:28,920 Speaker 2: Yeah, when we when we look at production for the 8 00:00:28,920 --> 00:00:32,720 Speaker 2: four year, we're of course contemplating supply chain along with 9 00:00:32,840 --> 00:00:38,120 Speaker 2: our ability to continue producing and the adjustment on the guide, 10 00:00:38,520 --> 00:00:41,239 Speaker 2: we wanted to make sure we were being very realistic 11 00:00:41,280 --> 00:00:44,560 Speaker 2: and setting expectations in the right way. Of course, everything 12 00:00:44,560 --> 00:00:47,080 Speaker 2: that we're doing internally is to work to beat those 13 00:00:47,120 --> 00:00:50,560 Speaker 2: targets and to exceed that. You know, and we spend 14 00:00:50,560 --> 00:00:52,159 Speaker 2: a lot of time talking about that internally. 15 00:00:53,240 --> 00:00:53,600 Speaker 3: But the the. 16 00:00:55,480 --> 00:00:58,680 Speaker 2: The increase in the guidance reflects the confidence we have 17 00:00:58,720 --> 00:01:01,920 Speaker 2: in our continued production ramp and the health ofware supply chain. 18 00:01:03,520 --> 00:01:06,240 Speaker 1: We mentioned that deliveries jumped sixty percent quarter on quarter, 19 00:01:06,280 --> 00:01:09,119 Speaker 1: but if you go back over the last four quarters, 20 00:01:09,200 --> 00:01:12,679 Speaker 1: production outpaces delivery by about fifty five hundred units. You 21 00:01:12,720 --> 00:01:16,160 Speaker 1: and I have discussed this before, but at this point. 22 00:01:16,240 --> 00:01:20,160 Speaker 1: Is this an issue of demand the unsold portion of production? 23 00:01:22,120 --> 00:01:24,160 Speaker 2: No, one of the one of the challenges with where 24 00:01:24,240 --> 00:01:26,760 Speaker 2: our plant is located. It's physically in the middle of 25 00:01:26,800 --> 00:01:29,160 Speaker 2: the country and there's not a lot of large markets 26 00:01:29,200 --> 00:01:32,360 Speaker 2: immediately chastened to it. And so as we're as we're ramping, 27 00:01:33,280 --> 00:01:35,240 Speaker 2: we have vehicles that come off the line, you know, 28 00:01:35,280 --> 00:01:37,680 Speaker 2: being produced, and then they get loaded onto rail cars 29 00:01:37,800 --> 00:01:41,319 Speaker 2: and the rook that inserts many weeks of time between 30 00:01:41,360 --> 00:01:43,920 Speaker 2: when the vehicle leaves the production plant to when the 31 00:01:44,000 --> 00:01:49,200 Speaker 2: vehicle's delivered. And particularly when the production rate is the 32 00:01:49,320 --> 00:01:52,760 Speaker 2: ramp is steep, you get this quarter of a quarter 33 00:01:52,840 --> 00:01:56,400 Speaker 2: delta and over time that will that'll be deminimus. 34 00:01:56,680 --> 00:01:58,040 Speaker 3: You know, we won't even notice it. 35 00:01:58,120 --> 00:02:01,240 Speaker 2: But given the scale of our ramp and given the 36 00:02:01,280 --> 00:02:04,160 Speaker 2: overall magnitudes, it's something that you do see a little 37 00:02:04,200 --> 00:02:04,920 Speaker 2: bit more of right now. 38 00:02:05,720 --> 00:02:10,040 Speaker 1: So Rivian is still supply constrained. There is no demand crunch. 39 00:02:11,320 --> 00:02:15,000 Speaker 2: Yeah, and in fact, I mean our biggest challenge from 40 00:02:15,040 --> 00:02:17,560 Speaker 2: a customer point of view is the way times associate 41 00:02:17,560 --> 00:02:20,720 Speaker 2: with the vehicle. So you know, this question will probably 42 00:02:20,800 --> 00:02:22,680 Speaker 2: generate a bunch of customer emils to say, hey, wait 43 00:02:22,720 --> 00:02:24,560 Speaker 2: a second, if there's vehicles in the system, how come 44 00:02:24,600 --> 00:02:27,440 Speaker 2: I'm in a game my vehicle sooner? So you know, 45 00:02:27,480 --> 00:02:29,760 Speaker 2: for us, it's it's contained to ramp production and then 46 00:02:30,320 --> 00:02:33,720 Speaker 2: taking dwell time out between factory what we call factory 47 00:02:33,760 --> 00:02:36,720 Speaker 2: gate and delivery. And you know we can do that 48 00:02:36,800 --> 00:02:39,040 Speaker 2: through spending more money. We could ship vehicles with trucks. 49 00:02:39,040 --> 00:02:42,000 Speaker 2: It's more expensive as a higher carbon footprint, but we've 50 00:02:42,000 --> 00:02:45,480 Speaker 2: tried to really maintain a heavy utilization arrail despite the 51 00:02:45,480 --> 00:02:46,400 Speaker 2: fact that it does insert. 52 00:02:46,400 --> 00:02:49,240 Speaker 1: In work twelve, you talked a lot about on the 53 00:02:49,280 --> 00:02:52,960 Speaker 1: demand side, the suv now being the main driver rather 54 00:02:53,040 --> 00:02:55,040 Speaker 1: than the R one T pickup. You also said that 55 00:02:55,440 --> 00:02:58,840 Speaker 1: the suv is more profitable than the pickup. Can you 56 00:02:58,880 --> 00:03:01,279 Speaker 1: put a number on that on the on the percentage 57 00:03:01,320 --> 00:03:02,880 Speaker 1: difference in terms of margin on. 58 00:03:02,840 --> 00:03:06,000 Speaker 2: Both, We haven't. We haven't put a number to it, 59 00:03:06,080 --> 00:03:08,800 Speaker 2: but you can look really clearly. The pricing of the 60 00:03:08,880 --> 00:03:12,600 Speaker 2: SUV is higher, so it's it's a five thousand dollars 61 00:03:12,600 --> 00:03:15,960 Speaker 2: increase essentially like for like trim, like for like package 62 00:03:16,200 --> 00:03:19,360 Speaker 2: between the R and T and the RNs, and the 63 00:03:19,400 --> 00:03:20,880 Speaker 2: cost to produce them is very similar. 64 00:03:21,200 --> 00:03:22,840 Speaker 3: So it is a higher margin vehicle. 65 00:03:23,360 --> 00:03:26,040 Speaker 2: It's as as I said in the erning's call, we're 66 00:03:26,120 --> 00:03:30,519 Speaker 2: very happy to produce roughly two thirds or m being RNs. 67 00:03:30,639 --> 00:03:32,880 Speaker 2: That was what we'd originally expected it to be, and 68 00:03:34,720 --> 00:03:36,480 Speaker 2: you know it's ending up very close to that. So 69 00:03:36,480 --> 00:03:38,760 Speaker 2: are you know when we planned the program years ago 70 00:03:38,960 --> 00:03:41,000 Speaker 2: and we're thinking about how this would map out over time, 71 00:03:41,520 --> 00:03:43,560 Speaker 2: we expected about a third of the VIE to be 72 00:03:43,560 --> 00:03:46,120 Speaker 2: the RNT and about two thirds to be RNs, and 73 00:03:46,120 --> 00:03:46,880 Speaker 2: that's where we're landing. 74 00:03:47,800 --> 00:03:50,000 Speaker 1: You lowered your adjusted lost guidance for the year to 75 00:03:50,080 --> 00:03:53,480 Speaker 1: four point two billion dollars, down from four point three billion, 76 00:03:53,840 --> 00:03:56,840 Speaker 1: Still a lot of billions. Are ja, When will you 77 00:03:57,000 --> 00:04:02,440 Speaker 1: raise more capital and in what form? 78 00:04:02,560 --> 00:04:06,160 Speaker 2: You know, we're of such an interesting and important inflection 79 00:04:06,200 --> 00:04:08,920 Speaker 2: points of business, so we as you know, we launched 80 00:04:08,960 --> 00:04:10,680 Speaker 2: three vehicles last year, the R and T, the R 81 00:04:10,760 --> 00:04:13,560 Speaker 2: and S and the d V and launching any vehicle 82 00:04:13,720 --> 00:04:18,040 Speaker 2: and any program with this level of complexity hundreds of 83 00:04:18,440 --> 00:04:21,400 Speaker 2: components or hundreds of suppliers providing thousands of components on 84 00:04:21,400 --> 00:04:24,599 Speaker 2: each vehicle, and so we felt the pains of not 85 00:04:24,680 --> 00:04:27,320 Speaker 2: only launching a vehicle, launching those three with the supply 86 00:04:27,400 --> 00:04:30,360 Speaker 2: chain challenges that existed last year and so just the 87 00:04:31,440 --> 00:04:35,800 Speaker 2: lack of fixed costs absorption and the impacts of being 88 00:04:35,800 --> 00:04:39,000 Speaker 2: subscale at the beginning, multiplied by three have led to 89 00:04:39,680 --> 00:04:41,880 Speaker 2: what's been You know, we knew going into this, and 90 00:04:41,920 --> 00:04:43,840 Speaker 2: we guided to this. We knew this would be a 91 00:04:43,920 --> 00:04:46,640 Speaker 2: year where we would continue to lose money, and as 92 00:04:46,720 --> 00:04:50,800 Speaker 2: reflected in yesterday's call, we're doing better than the original 93 00:04:50,839 --> 00:04:54,679 Speaker 2: guidance and we've reguided because of that. But the focus 94 00:04:54,720 --> 00:04:59,240 Speaker 2: of the business is incredibly dialed in on driving up 95 00:04:59,240 --> 00:05:03,560 Speaker 2: production ramp and driving down cost. So that's changes we're 96 00:05:03,560 --> 00:05:06,320 Speaker 2: making to the vehicle in terms of cost improvements, but 97 00:05:06,360 --> 00:05:09,359 Speaker 2: also negotiations we have with our suppliers and then of 98 00:05:09,360 --> 00:05:11,880 Speaker 2: course continuing to ramp the plant and around the plant 99 00:05:11,920 --> 00:05:15,880 Speaker 2: more efficiently. So ultimately, when we think about the path 100 00:05:16,160 --> 00:05:18,800 Speaker 2: the positive gross margin, ultimately the path the probability of business, 101 00:05:19,080 --> 00:05:21,560 Speaker 2: we have a very clear line of sight as we 102 00:05:21,640 --> 00:05:23,960 Speaker 2: now have predictability in our production ramp and we have 103 00:05:24,360 --> 00:05:27,560 Speaker 2: really tight predictability around the supply chain and the contractual 104 00:05:28,320 --> 00:05:30,840 Speaker 2: cost reductions that we're going to start to see and 105 00:05:30,839 --> 00:05:33,479 Speaker 2: we're already witnessing those, as evidenced by the numbers we 106 00:05:33,520 --> 00:05:36,960 Speaker 2: put up yesterday. So we're looking with a lot of 107 00:05:36,960 --> 00:05:41,960 Speaker 2: excitement towards the next several quarters as we march and run, 108 00:05:42,000 --> 00:05:44,279 Speaker 2: I should say, as fast as we can towards profitability, 109 00:05:44,640 --> 00:05:48,520 Speaker 2: and that ultimately is the long term necessity for the 110 00:05:48,560 --> 00:05:51,679 Speaker 2: business is to self finance our growth. Now, with that said, 111 00:05:52,520 --> 00:05:54,599 Speaker 2: we've been also very clear that our cash balance and 112 00:05:54,600 --> 00:05:56,719 Speaker 2: as you loose to in your question, puts us in 113 00:05:56,720 --> 00:06:00,719 Speaker 2: a position to be able to focus appropriately on the 114 00:06:00,760 --> 00:06:04,040 Speaker 2: long term as well. Meaning while we're very very focused 115 00:06:04,080 --> 00:06:07,320 Speaker 2: on ramping R one and the eDV and driving those 116 00:06:07,360 --> 00:06:10,479 Speaker 2: to the normal facility to a twenty five percent gross margin, 117 00:06:11,440 --> 00:06:15,840 Speaker 2: we're also developing and proceeding with the R two program 118 00:06:15,920 --> 00:06:19,200 Speaker 2: and it's making great progress. I don't think I've been 119 00:06:19,200 --> 00:06:21,200 Speaker 2: as excited as I am about our two as have 120 00:06:21,240 --> 00:06:23,400 Speaker 2: ever been on a product. So we're looking forward to 121 00:06:23,400 --> 00:06:26,160 Speaker 2: showing that. But the cash bonds we've put ourselves with 122 00:06:26,240 --> 00:06:27,840 Speaker 2: the cash that we have is put ourselves in a 123 00:06:27,880 --> 00:06:31,719 Speaker 2: position to not need capital through the end of twenty 124 00:06:31,760 --> 00:06:32,240 Speaker 2: twenty five. 125 00:06:33,600 --> 00:06:37,279 Speaker 1: Okay, as I always do our ja I told folks 126 00:06:37,360 --> 00:06:39,240 Speaker 1: on social media we're going to be speaking and there 127 00:06:39,279 --> 00:06:42,040 Speaker 1: are frankly hundreds of questions. I think a big one 128 00:06:42,080 --> 00:06:45,440 Speaker 1: is on Europe. You have the infrastructure to service the 129 00:06:45,480 --> 00:06:49,039 Speaker 1: Amazon eDV. Does that mean you can now start shipping 130 00:06:49,120 --> 00:06:52,159 Speaker 1: our one to Europe because that infrastructure is in place. 131 00:06:54,200 --> 00:06:55,960 Speaker 3: Yeah, this is a great question. 132 00:06:56,720 --> 00:07:00,520 Speaker 2: We asked this a lot by customers, and I have 133 00:07:00,560 --> 00:07:02,200 Speaker 2: some friends in Europe, so we get asked a lot 134 00:07:02,520 --> 00:07:03,880 Speaker 2: of different questions. 135 00:07:03,520 --> 00:07:05,320 Speaker 3: In and around this country back country. 136 00:07:05,839 --> 00:07:08,400 Speaker 2: You know, right now, as you alluded to, or as 137 00:07:08,400 --> 00:07:10,880 Speaker 2: you said, we are delivering bands in Europe. We have 138 00:07:10,920 --> 00:07:13,280 Speaker 2: a service infrastructure and parts of stubution capability that's been 139 00:07:13,280 --> 00:07:16,360 Speaker 2: set up there. It's a great way to establish the 140 00:07:16,400 --> 00:07:21,360 Speaker 2: operational footprint there with with a single customer. That's of 141 00:07:21,400 --> 00:07:22,760 Speaker 2: course very operationally focused. 142 00:07:23,640 --> 00:07:23,960 Speaker 3: Today. 143 00:07:24,000 --> 00:07:27,080 Speaker 2: We're focused in the immediate term on continued to ramp 144 00:07:27,160 --> 00:07:30,040 Speaker 2: sales and deliveries in North America. We have so much 145 00:07:30,160 --> 00:07:33,400 Speaker 2: demand backlog, we have so many customers that very much 146 00:07:33,720 --> 00:07:35,680 Speaker 2: are looking forward to their vehicles. 147 00:07:35,880 --> 00:07:37,400 Speaker 3: That that's that is the focus. 148 00:07:37,440 --> 00:07:39,880 Speaker 2: And when we think about really going heavily into Europe, 149 00:07:40,680 --> 00:07:46,360 Speaker 2: the R two program and that platform contemplates really a 150 00:07:46,440 --> 00:07:50,520 Speaker 2: significant market entry and we think a really nice market fit. 151 00:07:52,040 --> 00:07:54,680 Speaker 2: So so that's something that over the next few years 152 00:07:55,400 --> 00:07:57,000 Speaker 2: will become a really important market for us. 153 00:07:59,040 --> 00:08:01,000 Speaker 1: You've talked a lot about trying to get out of 154 00:08:01,000 --> 00:08:04,040 Speaker 1: the exclusivity agreement with Amazon. The other big question that 155 00:08:04,800 --> 00:08:09,640 Speaker 1: your Rivian followers have is what type of deal would 156 00:08:09,680 --> 00:08:11,920 Speaker 1: you do next? Would you go for the big fleet 157 00:08:11,960 --> 00:08:15,160 Speaker 1: operators like UPS or FedEx or we try to do 158 00:08:15,280 --> 00:08:18,880 Speaker 1: many different deals with smaller mum and pop shops smaller 159 00:08:18,880 --> 00:08:20,160 Speaker 1: fleet operators. 160 00:08:23,160 --> 00:08:26,040 Speaker 3: Yeah, I think ultimately it's going to be there's elements 161 00:08:26,040 --> 00:08:28,080 Speaker 3: of both. You know. 162 00:08:28,720 --> 00:08:33,120 Speaker 2: When we set out to develop the van, the number 163 00:08:33,160 --> 00:08:36,160 Speaker 2: one sort of focus point was looking at how can 164 00:08:36,200 --> 00:08:41,120 Speaker 2: we make working and using this vehicle the ultimate environment 165 00:08:41,200 --> 00:08:43,480 Speaker 2: so easy to get an out of easy load packages 166 00:08:43,520 --> 00:08:47,000 Speaker 2: into the way we design the closers in the vehicle 167 00:08:47,160 --> 00:08:51,200 Speaker 2: facilitate that, and of course very safe so that the 168 00:08:51,240 --> 00:08:53,960 Speaker 2: safety levels in terms of visibility, in terms of cash 169 00:08:53,960 --> 00:08:57,160 Speaker 2: performance are exceptional for the segment. And so as a result, 170 00:08:57,240 --> 00:09:00,160 Speaker 2: what we're seeing as a vehicle we really believe is 171 00:09:00,160 --> 00:09:03,719 Speaker 2: is the ultimate you know, architecture, ultimate van when when 172 00:09:03,760 --> 00:09:05,559 Speaker 2: it comes to deliveries and when it comes to that 173 00:09:05,600 --> 00:09:09,200 Speaker 2: type of commercial operation, and we're seeing a broad spectrum 174 00:09:09,280 --> 00:09:13,240 Speaker 2: of use cases from pure last mile delivery to more 175 00:09:13,240 --> 00:09:16,440 Speaker 2: of a commercial van application and so we're navigating that 176 00:09:16,640 --> 00:09:19,600 Speaker 2: as we speak, in terms of selecting, you know, following 177 00:09:19,640 --> 00:09:22,680 Speaker 2: our Amazon relationship, what are the next big customers and 178 00:09:22,679 --> 00:09:24,120 Speaker 2: then how do those sequence in together. 179 00:09:24,600 --> 00:09:26,600 Speaker 3: And a lot of it ties to use case. 180 00:09:26,640 --> 00:09:28,920 Speaker 2: And trying to minimize the amount of complexity we add 181 00:09:28,960 --> 00:09:32,480 Speaker 2: to the business by having similar use cases with the 182 00:09:32,800 --> 00:09:35,960 Speaker 2: follow on immediate follow on customers, and then over time 183 00:09:35,960 --> 00:09:38,079 Speaker 2: we'll broaden the use cases of course. As a platform, 184 00:09:38,080 --> 00:09:40,520 Speaker 2: and it's an architecture what we call the Riving Commercial 185 00:09:40,600 --> 00:09:44,920 Speaker 2: Van platform, it's designed long term to cover a very 186 00:09:44,920 --> 00:09:49,280 Speaker 2: broad spectrum of use cases. R J. 187 00:09:49,440 --> 00:09:54,719 Speaker 1: You lowaered capital expenditures guidance for the year. Does that 188 00:09:54,800 --> 00:09:58,880 Speaker 1: impact the timeline for Georgia because you're you're deferring or 189 00:09:58,920 --> 00:10:01,680 Speaker 1: delaying some expense next year? I sent you the question 190 00:10:01,840 --> 00:10:05,800 Speaker 1: is is Georgia on track with the original timeline? And 191 00:10:06,040 --> 00:10:09,160 Speaker 1: is R two on track with the original timeline? 192 00:10:09,920 --> 00:10:10,120 Speaker 3: Yeah? 193 00:10:10,200 --> 00:10:14,400 Speaker 2: Yeah, So Georgia, we're about eighty percent complete on all 194 00:10:14,440 --> 00:10:16,520 Speaker 2: the grading work on the site. And it's a big site. 195 00:10:16,520 --> 00:10:20,000 Speaker 2: It's roughly two two thousand acre site. And you know, 196 00:10:20,000 --> 00:10:23,920 Speaker 2: as that site's coming together, it's not as if things happen. 197 00:10:23,960 --> 00:10:26,280 Speaker 2: So where we grade the site we build the plant, 198 00:10:26,280 --> 00:10:29,400 Speaker 2: that we order equipment in parallel to everything that's happening 199 00:10:29,760 --> 00:10:33,960 Speaker 2: in terms of site prep and soon construction, all the 200 00:10:34,000 --> 00:10:38,360 Speaker 2: long lead paint shop, body shop, stamping operation, those will 201 00:10:38,400 --> 00:10:40,520 Speaker 2: be kicked off in parallel and a number of those 202 00:10:40,520 --> 00:10:44,720 Speaker 2: activities have already been initiated with work well underway, so 203 00:10:45,120 --> 00:10:48,160 Speaker 2: timing wise for the R two plant, it's on track. 204 00:10:48,200 --> 00:10:50,600 Speaker 2: And then the R two program, this is a significant 205 00:10:50,600 --> 00:10:54,400 Speaker 2: focus for the business. I'm trying hard to contain my 206 00:10:54,440 --> 00:10:57,280 Speaker 2: excitement for the program until we show it, but this 207 00:10:57,440 --> 00:11:00,199 Speaker 2: is something that we're not only excited about, but is 208 00:11:00,240 --> 00:11:04,120 Speaker 2: on track and is really foundational to us, dramatically increasing 209 00:11:04,240 --> 00:11:07,280 Speaker 2: the adjustment marker for us as a business and therefore 210 00:11:07,559 --> 00:11:10,920 Speaker 2: the sort of relevance and relatability of the brand in 211 00:11:11,000 --> 00:11:11,760 Speaker 2: terms of price point. 212 00:11:13,240 --> 00:11:16,240 Speaker 1: J Scarrange, Rivian CEO, on the second quarter earning. Thank 213 00:11:16,280 --> 00:11:17,320 Speaker 1: you very much for your time.