Rivian Reports Profit and Unlocks $1 Billion Funding from Volkswagen

PLANO, Texas – Rivian Automotive reported strong first-quarter results, achieving a gross profit for the second consecutive quarter and unlocking $1 billion in funding from Volkswagen.

The company, which produces electric vehicles, revealed its gross margin reached 16.6% in the first quarter, surpassing Tesla’s margin of 16.3%. This marks a significant turnaround from the previous year, when Rivian experienced a negative gross margin of 44%.

Rivian has focused on revamping the internal design and manufacturing processes of its SUVs to reach this milestone. The new zonal architecture has helped reduce costs significantly and piqued Volkswagen’s interest enough to back a joint-venture investment.

In addition to hardware improvements, Rivian is also shifting focus toward its higher-margin software services. The company launched its second-generation Rivian Autonomy platform, which includes a new hands-free driving feature for highways.

The anticipated release of its R2 SUV is looking promising, with a projected price of around $45,000, expected to broaden its market appeal. The company plans to begin retooling its factory in the second half of this year in anticipation of the R2’s launch in the first half of 2026.

Despite a drop in vehicle deliveries, Rivian’s first-quarter revenue increased 3% to $1.24 billion. The company produced 14,611 vehicles and delivered 8,640 compared to the previous year’s production of 13,980 and deliveries of 13,588.

Management identified higher fourth-quarter deliveries for Amazon‘s electric vans as a reason for the decline in this quarter. Nonetheless, Rivian is seeing growth in its software revenue, which more than tripled from $88 million to $318 million.

The company’s losses narrowed from $1.5 billion a year ago to $541 million this quarter, and free cash outflows decreased from $1.5 billion to $526 million.

Looking ahead, Rivian revised its delivery forecast to between 40,000 and 46,000 units from a previous estimate of 46,000 to 51,000. They intend to begin U.S.-based battery production with LG by 2027, and continue expanding production capacity at their Illinois factory.

Rivian’s success in launching the R2 SUV will be crucial for its future. If the launch succeeds, it could trigger Volkswagen’s next $1 billion investment.