Rivian’s cost-cutting efforts have brought the company much closer to profitability, but it is cautioning that 2025 may still be a difficult year, particularly given the uncertainties surrounding the Trump administration.
The company published plans to produce between 46,000 and 51,000 EVs by 2025 along with its financial results for the fourth quarter and full year of 2024, which were released on Thursday. In the shareholder letter the EV manufacturer published with its findings, Rivian warned that “changes to government policies and regulations, and a challenging demand environment” could have an impact on those outcomes.
Although Trump stated throughout the campaign that he was inclined to find a way to eliminate the $7,500 federal EV tax credit, Rivian did not define what those adjustments may be. Vivek Ramaswamy, a friend of the Trump administration, has also demanded that a $6.6 billion loan from the Department of Energy be repaid in order to construct a plant in Georgia. Three days prior to Trump’s inauguration, that loan was finalized.
During a conference call Thursday, Rivian’s chief financial officer Claire McDonough stated, “We’re really looking forward to working with the new administration and Department of Energy on our loan, and we share in the President’s desire to bring jobs back to the US.” The company intends to create 7,500 manufacturing jobs at the planned Georgia plant.
Later in the conference, she stated that Rivian is prepared to incur losses of up to “hundreds of millions” of dollars as a result of tariffs, any reduction in EV credits, and other policy changes.
The CEO, RJ Scaringe, stated during the call, “We firmly believe, and we’re very in agreement with the administration on this, that the United States needs to continue to be a world leader in this regard, and our investment into electronics, software, autonomy, and AI — these are really important areas for us as a nation to continue to exercise a leadership position in.”
Rivian’s cost-cutting tear
The majority of 2024 was devoted to cost-cutting for Rivian. Ten percent of its employees were let go in February, and in June it introduced simplified, less expensive versions of two flagship EVs, the R1T truck and the R1S SUV. In order to reduce manufacturing costs, the company ultimately changed 600 parts on those vehicles and redesigned its software user interface and electric architecture.
Although $60 million of that came from software and services, adjustments like those allowed Rivian achieve a $170 million positive gross profit in the last quarter of 2024.
Rivian’s fourth-quarter revenue of $1.7 billion was a 32% increase over the same time in 2023. The sale of 14,183 vehicles and $299 million from the selling of zero-emissions regulation credits to manufacturers accounted for the majority of its Q4 income, or almost $1.5 billion. Rivian said that the selling of regulatory credits brought in $325 million for the year.
Software revenue is becoming more and more significant.In the fourth quarter, Rivian’s software and services revenue of $214 million was double that of the same period last year. Rivian’s 2024 software and services revenue was $484 million.
Although Rivian manufactures and sells EVs, its future is also heavily dependent on software, specifically through a profitable joint venture with Volkswagen Group.
According to Rivian, the joint venture’s new car electrical architecture and software development services, billing and subscription fees, and repair and maintenance services were the main sources of software revenue.
Gen AI comes to Rivian
The business has used generative AI as one technique to cut expenses and improve customer service. In its letter to shareholders, the company stated that it plans to employ AI to automate procedures and “significantly reduce administrative overhead on all non-repair tasks.”
In actuality, that takes the form of an AI chatbot or assistant included inside the Rivian app. This past December, the business released a beta version of the Rivian mobile app to R1 users.
A Rivian spokeswoman said the company has safeguards in place to restrict the interaction to questions about Rivian services and guides. The AI assistant was developed using a combination of in-house AI agent infrastructure and a third-party big language models.
The AI assistant was created to respond to inquiries on typical car inquiries and service requirements. According to a company representative, it can also perform simple troubleshooting, gather data for maintenance, and respond to general inquiries about the car.
Information from Rivian’s quarterly earnings call has been added to this story.