There aren’t many companies that can lose $33,000 on every product sold and still have a bright future, but Rivian loves to buck trends. The Wall Street Journal recently published a report chronicling the company’s production woes, notably that it is losing $33,000 on every vehicle sold, and how it aims to cut costs and re-engineer the R1T and R1S to finally become profitable in the near future. This isn’t an easy task, especially when the brand’s trucks are already selling for $80,000 on average, but Rivian’s CEO RJ Scaringe is optimistic about its chances. In Q3 2022, losses per vehicle were at almost $140,000. They dropped to just over $125k the following quarter and just over $67,000 in Q1 2023.
This suggests that profitability is not far away, but challenges persist. Rivian doesn’t have the scale yet as its Normal, Illinois, plant is currently producing at less than one-third capacity, and the idea of burning through cash even quicker isn’t tenable. As of June this year, the company has been burning through $1 billion a quarter.
