Rivian Automotive, Inc. (NASDAQ: RIVN) CEO RJ Scaringe said on Thursday that the U.S. electric vehicle maker is "very confident" it will achieve an autonomous driving milestone this year, unlocking a $250 million installment of Uber's investment, and he also noted that demand for the company's new compact SUV, the R2, is very strong.
For Rivian, the funding from Uber and the robust demand for the R2 are crucial. The company is currently working to narrow its large losses and control cash burn while also funding the development of autonomous driving technology; in addition, its joint venture with Volkswagen has become an important source of revenue.
Uber plans to invest up to $1.25 billion in Rivian by 2031; the investment includes an initial $300 million, with subsequent funding contingent on the achievement of autonomous driving technology milestones. Scaringe did not detail the specific criteria corresponding to each stage of investment, but he said current progress is "exactly in line" with the company's internal plans. He noted that the two sides aim to put Rivian's driverless R2 vehicles into operation on Uber's platform in 2028; the plan will start in a small number of cities and gradually expand to about 25 cities over roughly 18 months.
The R2 outsold the R1 SUV, pickup truck and van in the first quarter, helping Rivian set a record of 19,248 deliveries. Scaringe said: "We are still in the early stages of ramping up production. This is our first quarter actually producing the R2, but we have now started and are accelerating second-shift production, so we view the fourth quarter as another quarter in which we will see the R2 improve further."
As a competitor to Tesla's Model Y, the entry-level version of the Rivian R2, with a starting price reduced to $45,000, is expected to launch next year. In the third quarter, the cost of sales per vehicle fell by more than $12,000 from the previous quarter, although Rivian is still losing money on every vehicle it sells.
In addition, responding to reports that Rivian's software has encountered difficulties when being integrated into Volkswagen vehicles, Scaringe refuted them, calling such rumors nothing more than "noise" and stressing that the partnership between the two sides is "very positive."
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