Rivian Automotive (RIVN) 10 Nov 222022 Q3 Earnings call transcript

Good day, and thank you for standing by. Welcome to the Rivian Third Quarter 2022 Earnings Conference Call. At this time all participants are in a listen-only mode. [Operator Instructions]. I would now like to hand the conference over to your speaker for today, Tim Bei.

begin. may You

thank quarter and joining for us Good earnings you call. third XXXX Rivian's afternoon, for

Joining today's Claire Chairman shareholder website. and Financial us our A letter Chief Scaringe, on Officer. our Executive call, is we available Officer; Investor of and copy McDonough, on Chief RJ our today's have Relations Founder,

as capacity and begin, we of to trends, your conference without business include operations, our call, Benz, due forward-looking our with like market those materially reflect this our SEC enhancements, our with our that manufacturing to responses questions that venture contained vehicle our business, expectations to product and differ opportunity, and or expansion, our only laws, statements limitation, you under these and filings are shareholder Before products remind RX, Actual would implied of management's related joint Mercedes are today's statements forward-looking industry regarding views statements and including, comments in will federal including our I course described during today from to which and business and the our securities associated in strategy deliveries. statements goals, risks regarding letter. proposed production uncertainties ramp may future results and by

will to provided a over today's call in shareholder During will non-GAAP financial that, GAAP measures is turn opening to who we both the few this measures. call, GAAP begin and letter. discuss financial A reconciliation remarks. non-GAAP of RJ I'll with With

and everyone, for Thanks, us thank joining you Tim. today. Hello,

platforms. you on Having the consumer the around made RXT, overview call, recent shareholder items for additional launched of vehicle to of our our over X variants has I passed of across details progress just the includes this for highlight to to we'll the progress anniversary start which it our take team an and published past we want cover call. the before year. read Just this months. today's opportunity of the production commercial I the X-year encourage some We our letter,

awarded accolades. We produced continue the utilize and MotorTrend's along our September We vehicles with XX, Truck Year, we normal are our of fully to facility. more production XX,XXX of as to than other ramp media

position also first our for our our service to enthusiasm developed excitement of been Network, developed Adventure centers addition, the go-to-market operations delivery remarketing which the a Rivian in-house vehicles, of products. and a transformational the chargers. In vertically integrated mobile Normal. We FleetOS, in It's produced industry. services, generation our time service auto launched financing, in Production unique and production large-scale at and to our products fast see DC during we physical network include for and operations, and our of ramp facility continues believe rewarding we're and insurance, designed

evidenced visibility We consumer by commercial our have demand backlog. significant and as

seen expenses improvement We billion us ramping remain that navigate cash have for to sold, capital-efficient cost look the across to We strong a balance cost-efficient these quarter. expenditures and production offers of manner, focused and past economic a the sheet and uncertain with over we've growth. in capital on goods methods times drive $XX operating of our flexibility

RXT, team. another quarter RXS, over Rivian XXX was third the across vehicles EDV We produced for X, The record lines. the product and

the remains facility targeted focus annual achieve to our normal key Our capacity. ramping

shift all extraordinary hard grateful a integrated takes size, facility for vehicles. reached milestone key started second It coordination into as highly of I'm part As this manufacturing of and to the vertically ramp a producing that's recently gone it. work this our progress, we

for We continue to see strong products. our demand

for our net XXX,XXX vehicles. RX November X, of preorders As over reservations we had and

orders States net of are deliveries and Canada are these the and As cancellations. and United a reminder, from only

an of In was early for for world's the quarter MOU with market. strategic commercial van important electric a third business. the in commercial our vans largest we for Europe, also Mercedes-Benz The signing September, partnership announced

expand at overall Amazon EDVs it's offering. stoplights driving making Amazon from of everything dynamics, weeks, and a the unique XXX the EDVs exciting package. exciting drivers cities. spend questions the to to deliver a asking the EDV deliveries seating to continue experience, the first driver. electrifying the firsthand raise and really is to lots, for the vans time to has it in our Every my door are to million me enthusiasm delivered We logistics. folks personally over and two now from FleetOS these a daily It's what bar I see packages few great I help happy way actually over with the days as X to be for it, about really vehicle for get or or position pocket to parking that seeing it's the And we're experience

in-house for to delivering look in investing to capabilities our continue and scale our capital-efficient and cost technologies, opportunities performance product enable will while we which strategically As differentiated in platforms, advantages. ways, we're also structural production technologies

in-house Our capabilities with to improved provide and experience. an agile customers us allow software be

These battery a get hardware XXXX, new design early we ramp first pack these in line The are to life introduce the process now. to so lines will introduction excited see the LFP quality lines. cost. meaningful time loops production changes our we've vertically-integrated imperative into only performance lower the coming in the significantly and great plan Normal. that not right It's technologies of commercial the of optimized van to quarter. and enable It's but allocated also we first at checks of production our motor fully side, the Enduro In to On we're our motor to the Enduro unit. in-house manufacturing drive

as current our are and as future cost teams making across vehicles of are We well the the about and technologies offerings. improving performance excited progress our

the and our future on are of to about importantly, While products and excited The happening I'll members, suppliers next to and unique call we enabling these I yet, forward us. work our products to is some I we Claire. pass show wonderfully haven't team to this communities our show dedicated platform. be smaller to couldn't shown of the you over any our continue customers support looking the more able tremendous size be With the for thank want world. that, to platform

I making. the RJ. the echo to around third and is your team excitement progress results the want quarter Thanks,

the third of During negative of quarter, in X,XXX profit delivered We we produced driver over recorded which third we vehicles vehicles, the primary and million the generated. million gross was $XXX the quarter. X,XXX $XXX nearly of revenue

the the to LCNRV. related structure accounting to quarter million with We impacted We recorded continue be lines while ramp. third in high-volume we $XXX production fixed associated high volumes running at a low cost by adjustment

the in of and as in second an values compared to of the quarter compared value the second anticipate purchase inventory firm increase the primarily certain prior The the the ahead calls, The the for our of sale. due discussed to cost increase adjustment of sale LCNRV LCNRV vast represents the sold costs overall to necessary in to majority to of receiving As increase shift. vehicle down goods manufacturing XXXX. writes in our future inventory LCNRV ready inventory considering on upon commitment the increase after of we amount the quarter charge is second start

the of raw approximate expedited $XXX the shipping. profit need by quarter is this to our did last expense, gross for quarter inflation supply driver to the not operating challenges, expenses as compensation quarter looking year. nearly an stock-based which well of as the recognize second of past which to same primary caused as quarter IPO. XXXX we The Operating expense a grew this When impacted increase versus materials for prior In million saw decrease. addition, prior XXXX, we million our chain November similar our was $XXX at compared by also quarters, the

and technologies to reflect in drive cost and customer our our business. of focus optimization core operating across QX additional vehicle continuing experience prioritization Our expenses the and investment ongoing while

and deploying continue most in us that dollar our focus We turn deliver. the which helps can accelerate targets, spent way impact financial in on we towards to long-term every ensuring the capital helps efficient

for We cash about to second which EBITDA of $XX quarter was hand. quarter is the of third with the billion, $X.X third on adjusted XXXX. billion ended negative flat the quarter Our

We our fund remain and investments. excluding XXXX, cadence with regarding have of Mercedes-Benz. continue flexibility investment economic to the growth on impact the operations to environment with through cash in We the our we in joint the level believe of our hand a venture confident ability high monitor of contemplated

with to facility. work on Authority and We state of production the the Development continue Joint second domestic Georgia our

timeline the for launch the adjusting are it We in expect platform and XXXX. will launching RX

and global expansion market will We Rivian work for excited development RX opportunity expect that's a about underway. the are the unlock massive platform

production we of of cause supply our production. due in continue time quarter-to-date of of our which also guidance limited a the production reaffirming full produced. to component, to We've of uncertainty be XXXX vehicles key supply XXXX, in a quarter, of coupled continues lack deliveries. we We total second shipments, The of expect quarter discrepancy of production. the ramp XX,XXX and will significant the our the the between October in-transit to year from shift five and from a end an our In volumes experienced largest increase with ramp rail towards fourth days source chain as November are downtime

XXXX. In of our the expenditures reaffirming map guidance We're expenditure billion. adjusted streamlined $X.XX to $X.XX road addition, our of billion product shift negative capital we're lowering XXXX due our capital to guidance to EBITDA and certain

of have November As mentioned, over RJ net X. as RX preorders we XXX,XXX

ramp a we fundamental our as will production become important increasingly progress an and measure As business. preorders believe of we deliveries, our less

closing, we approximately call in teens see longer during the confidence With approximately that, our path In line to to calls. an reiterate high target. open clear no XX% me I Going long-term EBITDA quarterly flow target, financial number let the preorder gross to turn for margin earnings free want to Q&A. targets. XX% the provide margin and cash operator forward, We our updated a target back our our plan to

[Operator Instructions] the with Bank of line from comes Murphy America. Our of John question first

Your open. is line

info. that am Are getting the preorders might driving for so guys. A change just curious that to afternoon, to the of you're the for That actually what's robust or not preorders on is informative? I long what couple where mean, provide I kind those in anymore. to that Good in and the announcement ebbs flows factor point be production relative communication? are going a the all in getting that of quick not Thanks ones. that. we motivation

Thanks, John. This Claire. is

is and preorders, it's year the for it overall continue pertains with sentiment start provide up like this us to the that we're more production consistent really to extends And to Obviously, as a really additional we go-forward XXXX starting have, so one to you'll so feel as on going an pertains of our market. from metric meaningful for don't new with be backlog our basis us that to post into well, to product a demand we see ramp it organization. was given what associated our We're platform, of currently it's our production launches well. our XXX,XXX-unit as a have the backlog us deliveries that robust to RX vehicles. as the that As

just And I be that to robust you and market enter that provides us mean, much listen, could would time, opens on a given say, update more hey, market Okay, the optimist have over JV, on ultimately just in successful RJ, say, an sooner. think could wonder But Mercedes then if and listen, I that's able hey, your you your European that I might faster product. growth own up helpful. the there. give skeptic an been

the if us and able you updates curious there skeptic might be there. can give you on maybe to couch Just other of optimist kind any direction versus

products. aligned Sure, about accelerate at position and on around we aligned the do to of aligned faster, we to electrify, of mentality, mentality products looking terms need there's electrification the Mercedes execution and a the of mentality be somewhat and in John. is, much think how products Yes, very how partner

And we're So market, looking was be and of that important working to look we that sides at it the to space van kind in think for as space Mercedes both about an large at this, we it's think with. partner a relationship felt we and towards is this a together. great Europe. on Ultimately, a accomplish more commercial partnership this we as

And continue if we more one could go Okay. the versus delta up then at for so Or expand in in. are that of forward. recognition sort The revenue quarter? about Just over a of deliveries models I time? to looking versus onetime in Claire, kind will opening sneak to just gauge we here gap think the the can that production trying our fourth production,

to volumes from that gap and a half period online And QX in from particular exacerbated The coupled back-weights a in ramping week then the the with holiday the be that Obviously, you obviously customers we shift we have QX to that in to because last we've the production rolls had into are within in will that, will harder the second the time of that normalize in closer installed Normal. here that production driver shift that the we find the so where second little really a a what bit perspective of that's for then capacity ramp plant be the don't core December over and shift us. of quarter. coming upcoming to perspective start as quarter, deliver rail

gap percent basis. basis on a the should narrow go-forward So on a

very Thank That’s helpful. guys. much, you very

the Jonas comes next Our line Morgan Adam from of question with Stanley.

Your line is open.

everybody. Hi,

you if million, more increased if million improved quarter is if than which your I the quarter. So last from question, loss, by calculation do $XXX to revenue my exclude you substantial sequentially first this okay, substantial will, gross is quarter-on-quarter -- LCNRV, XQ $XXX your XQ, and Claire,

improvement gross your of on my greater profit revenue. ex change was So math, your in actually LCNRV than

I Now wanted my there if unusual may quarter, lot exceeded of improvement on to change profit be some on see what LCNRV, was other but sure to there that profit last actually just right you gross the make highlight underlying, really revenue. some and kind that is the a sequentially sequentially excluding got knocks there of could maybe math to Thanks. stuff were and that in draw gross going better

Adam. Thanks,

important about components. are So unpacking LCNRV the there different it's understand question itself, first to

in commitments, so as we to is it. at turn pertains losses our to firm is end-state raw get materials may we to is inventory necessarily it, at recognition accelerating we're not those for of which of the the LCNRV up versus baselining looking, of really about which then grossing entirely change that associated And sort in particular, at look complete instead and within inventory the quarter, into us bill materials to want the LCNRV of really The direct I as have cost themselves? say, what these way exclusion think that it vehicle materials So excluding held to conversion it calculation, the if of benefit a would way in to the The your quarters. the two costs it. levels the with segment both you is of way and the you increase is in take is to were reduction constant of look

in And so you why that's increase particular. that we look as to look at that calculation

there, you're aggregate. And metrics, an so looking of right, goods more XX% basis XX% if that your based increase comparable in deliveries on a a it's versus of increase in in sold of off own cost

loop meaningful direct the So of progress some just of we've but to wanted on made I that those close to to you nuances. front, sort

currently from Okay, -- follow-up deliveries, And your us appreciate Tesla trucker you're what are Can I just where Thanks. would an Thanks. of owners? to update they a on there Any or a getting where that. get many just coming customers great? you drive? then tell as give other And same on reservations. kind color from thing sense, for how SUV be your us

Sure, Adam.

products. really targeted One that be And open customers. pulling state, umbrella developing we today, diverse well flagship be that we time, the really actual and to, these the over them things And pleased about for the And to because did target of factors brand, a state. add spectrum the vehicle the RXT have so I should additional introduce and thinking brand do that, now really relative as we look from at are to we in and us as really of products brands. the of a wanted say, pulling RXS, -- we target we're set how sitting was to of broad here formats customers form have products

percentage majority new view haven't represents mission not currently into aspired it certainly, to to of X-row point and -- to can that off-road. owned in introduced products because a own it's we've important cases, sense, coming very EV, before, great which of transition. of So full-size new a really important second our of are That's jump brand, close customers number very are are we of and which customers, our desires it because type the the pulling that really the is to of make the of customers been through they've deliver over they're the customers in EV buying out customers. It's is efficiency do a customers, the something meaning customers customers, a cases, coming vast SUV that's haven't a significant single demand. create really it that different before, majority similar something there's a I to -- want helping in customers really, some add is what owned in pickup of means brand pickup that's as of a lifestyle-focused. But in EV a no of prelaunch being around created, most haven't moving is, is to we're broad an first the overall the XX%, of able pickup, course, RXT something would before. many a many SUV couple but RXS are And our from who’re well on-road of an metrics, that a and driving But out helping spectrum And of Teslas. with folks that a of

Thanks, RJ.

Spak from RBC. of line Joseph the comes question next Our with

Your open. line is

I'm on pulling for a what update said. much, I Claire, to back similar sort Adam's just go thread to want I you so to of time everyone. and here sort of was trying Thanks real because question

seems quarter, then inventory same in obviously and increase unit, divided third per vehicle for, adjustments, COGS while you above the still at adjustment, in So do as what that the but if quarter second suggested, I look I did the it the for still XX%. like COGS just selling over no the improve just like thing you're in deliveries by auto the adjust

that So something to Like can there does allow you understand, just that is right? is not us accounting like do with you the help that not calculation?

right. No, absolutely that's

a comparison As a the looking that quarter of mentioned, you're you apples-to-apples sequential as would Joe, improvement basis. at way the sort see factor had right, I on you of it, XX%-plus

I that. misheard I Maybe Okay. I XX%. thought heard

And Okay. that... is

Dollars that -- we're off but XX% growth basis. increasing fact also dollars, a of right, XX% that of the is is on deliveries

really those. you're two So the of netting

Okay.

sort that's the so vans And anything that there Or with in RXs the impacted and of leverage plant? seeing in quarter the that? you're the mix is between

The we've seen we're some quarter the just moving driving cost enabler us the cost us key that as biggest of plant, efficiency that that continue moderate down the on beyond to of seen per well. for a basis costs and is goods also a start-up-related of sold driver we've sequential some within That's as vehicle.

to just in vehicles -- thing in launched multiple is here, have other parallel. jump we've Joe we The that

referred we of So stacked of same up each other, and on four those the were largely Claire time. start-up costs all ramping the top seeing that vehicles to, different at launching

pushup, reevaluate of evaluating you timing, a probably plans, guess And et that and that just that. But I'm had accelerating directly is the revised I obviously that IRA still lot. also in of and A of wondering, to at or of accelerated thinking think CapEx of like plans the again of slight quarters ago, maybe the one versus appreciate financials seems reaccelerating cell rest were second in-house Thanks return to question. the you this impacts talked sort maybe does things what the your you greatly and Okay. then a that couple to cause of kind business. time on development? but investment profile you're some light a changes of the the some that be cetera. RJ, about Because I was

on thoughts to wanted your just that. So get

tailwinds S. know, is there's this of by we there also some think cells. step the not both base still really government are build-out to create strong for moving really mean, but step the as and you only an for IRA, U. a powerful pieces -- supply I with electrification a domestic around important Yes. but battery

battery only the this, supply time key benefits some that the certainly we're just hydroxide, we qualifies more through security precursor making materials is IRA this we not that couldn't driving sure the for go focusing supply think lithium but about associated of be areas out we the the it's materials so it's not also And the spending a core have the we lithium about shifts think overall of making the lot all end excited into and in chain. are decade, carbonate, cells, cells, how -- as that, supply of on. sure And with the bill. And it's

cell we the quickly have produced achieving at particularly into that domestically Now vehicles, on just puts that greater this emphasis about platform the and and the important two long that for is achieving as something to been as our think cells This level, possible. go as has us vehicle. would plan that importance

you. thank Okay,

Our comes Wolfe Rod of line Research. next from the with Lache question

is line open. Your

everybody. Hi,

You to with means. the plant. through late on mentioned cash confirm just that funding again excluding this you that what have hand, wanted JV And XXXX

RX? I or important, that's about into funding will -- plan anything funded mention just wanted of just that Normal sure that, that by XXXX, new about up the to integration Is assembly. cathode you most anything late of particularly to correct. active Georgia at and So you for part material. presumably vertical didn't the least it's make ramped have your batteries extent And

Thanks, Rod.

work invest build-out here. in lot that capabilities cell R&D we board in comments as options pertains basis. and securing Rivian go-forward XXXX. a on and in-house a to the heard RJ's As opportunities last our of past, doing And have cash remain you as across is evaluate, as Those And team the materials from it there that also raw are through we've the around about the to and high-growth, confident we've in we for for spoken about, high-return right, hand will an road all opportunity. evaluating we us on opportunistically working that as that which some guidance organization certainly development today include consider And the look obviously, map cells, and much does as building today here blocks have of follow, we're things that our and for we we build-out on the RX and cell out the about the really as build-out in investments would at do in embedded currently guidance state of What sit well. doesn't we've platform past. that of large-scale more spoken future the the is our as manufacturing our meaningful talked

core those blocks to as are road out So just hand wanted building our you items call about that think that to the through map on and I cash XXXX.

That's the kind time possible that, Or to of the get pulled that something that it that all a prior of can change Okay, longer helpful. just ramp is to that right. takes Is RX? together? it

look create exercise chain. with advance part that time and to the with above as take to for well time lines a of that, our is have cells and as activities like, lot already said, we future XXXX domestic of enough associated cathode in But some building development about impact all a the material decision what active that pilot in planning built pilot as for our what's plan Rod, into think opportunities supply the funding us is and as of Claire the raw beyond frame. the beyond development material -- out to

I'd things very Building those we that of through production so recognizing is certainly. also that profiles. up lens those have must-have it's to a need them view the So of in those for return strong of capacity. we believe battery we look the of activities capital ramp terms this one domestic we'll are cells decisions that something And question time, is at just over how say raise a take. quickly as

lastly, and where people the to fourth shift just just I might not there that supply from going now, because you're give reporting who what you still S-curve And -- vehicles. like have Can obviously, producing vehicles you chain. us -- in quarter. from you by to what in XXX extent, some RXS for be presume any push-out you're fully color trajectory constrained And XX, are the the there but benefits, that, might over the the are are here the some on are look just second

if the has wondering any ramp like. that implications for looks what So

Yes.

But second is customers, of In a on additional it's shift second shift, if of it's running. -- building now which The exciting. those in additional it additional it. brought have through curve went starts associated a XXX% is what curve with if vehicles to ramp as lineup it brought first shift, while the than are building lot ramp on the the does time not week at faster and and team, much output. we every it's up We're vehicles. hours the is it's course, a we up, vehicles as now And delivered ramping plant of immediately

shift in supply cognizant chain, ramp your limitations well, you last as very much of the question. of talked about that that -- would call, vehicles. the was going as before group now. we're the what of a drove and build the ensure we sure We're to team want make that we through was brought large members, is recall, that have going called in out to we It second actually this coming the timing was So we It on of additional you parts online. the

So It's going here stand well. today, that is as we ramping.

first to improvements. The make continues shift

ramping of much more strong. focused our But leveraging output of plant fixed the and XXXX we're fully the just shift just very through costs operational ramp As efficiencies going of we're focused second the achieving on more many efficiencies, also across higher and and implicitly come Claire which more not cost volume. efficiently on before, on much referenced but very into

you. Thank

line of the question next from comes Our Coldicott Redburn. Charles with

open. is line Your

and Hi, there, one, previously, talk the RX for at on for to XXXX also investment guys. first changed all, a about changes, My if bit period and what's can taking from plans maybe the delay this Thanks XXXX? your you how my XXXX question. to the up

doesn't Charles. making reflective really This that any by is the product production sure change material prepared. This Sure, in a of site the represent means. is

of EDV RXP, of time to phase, lessons XX leveraging ramp go through months. the amount the we've appropriate We have lot RXS, XXX last the gone the learned and the as the a of over the the EDV ramp-up through XXX

informed So RX. our possible close thinking flawless on making have sure those have as to ramps that a ramp we as with

we're spend terms our Claire time of working a some one of the and over ultimately, as I require push as hard we of of is with as -- -- into dollars, spend things teams to in with the things XXXX very the well. But Now lot course, the off can. on these of of on to payments CapEx course year us and, next much some of investment

And production to production, on of that may week your there think the target, to the think final if you've lines meet kind along it. Can the have that Got so XX,XXX average component seasonality missing a we impacted linear a that thinking so XXX prior in that? need maybe a far? any some Or or weeks to far? exceeded about quarter-on-quarter so I should year, year will question, units is rate next be I quarter. through into of you ask And then next in then of growth

are both and our We've both do year this plant. planned plant chain, think quarter-over-quarter. do line Enduro and earlier, to downtime way not And LFP about what looking capacity week-over-week, see improvements the it's our at end then supply end referenced. symphony we talked of healthy first and make in XXXX, look We we're -- have EDV across quarter-over-quarter just growth a and the coming overall also growth in is at this The into this some we of as This is doing we increases about you we our this of but year, the the our as the the into quarter some And the Drive Claire integrating unit I before. pack platform. referenced of of XXXX. as the

that's host drive unit, so And course, battery with changes. of of new related new pack, a that, and

loops launch. the through really which propulsion to real to it's considerable some excited improvement introduction and for And that training built cost of really about, that time quality go into provides time. So new we're sure the seamless a a appropriate a make platform, we've take -- plan year it's next the will that which

Perfect. Thank you.

line of comes Our next Canaccord. question from George Gianarikas with the

line open. is Your

thanks question. and for afternoon Good taking my

you recently and and a you ramping the performed how see if thoughts your could I'm you had and share your XX facilities service next months? those department on over quickly, curious recall how personnel Just

Thanks, George.

background, operation network. as demonstrate a And opportunity it a components. and minutes on value recall point couple and for of direct a which was the Just of us a remarkable the to for a benefit we And of fastener takes called a the tightening, vehicle. of this in for inspection had suspension one service a our really torque

XX% So currently XX% completed we, today, have -- that scheduled. that's another to sight operation our about XX with of of on line fleet,

which and moments just operations. heard the immediately have across then these recall, So we we the locations, And working tried something have it as transparency the seamless address at appreciated and In as provide the The into to inspections come And to service we within of customers to which you was we to the we're within in entire weeks, the go after our by as vehicles some their on over business. rapidly proud speed deploying make to that really we as where -- saw now say, was possible. decision XX% me can complete of first think great, this handled situation our well. places I which is would but was for this ultimately, to cases, in their customers. they fleet leadership and homes, performing to where able at customers process do of could our go this to were ease was made service it very the voluntary do hours,

to missteps just been critical one curious you have if more. in-house. to develop I And for autonomous as whether recent There's I'm some high-profile been autonomy. view ask could competitors your one and of in think developed stated technology offering be not has that in-house. that that it whether updated it's critical may Thanks. your just And your them on

on purchased approach then developing And systems a more you on to a And of ways capability $XXX-plus camera-heavy platform of autonomous to by space, sensor are but have very that using a thousand you of thousands sensors, say deployed radar-heavy in our broad latter, customers where very that be that and hardware is sense vehicles focus approach platform. the we're designed the grow it. constrained unit an where -- And you compute. a dollars compute. set autonomous and There's set of in-house constrained where oversimplify, I'd will vehicle our more worth have in case, there's Yes. of spectrum to are have hardware-heavy within to a have systems

that in having but believe assist important just today fleet And really beyond talk certainly Level do we benefits so but millions something what about that this very many time of features and as we with vehicles miles. see takes driving is large a X deployed above highway space. it are this from we And growing not the is

this As miles over to of great contribute all million opportunities XX.X but and vehicles which is today, to driven learning platform. have those our grow miles, great, build

Thank you.

comes line question Bank. the from next with Our Rosner of Deutsche Emmanuel

is open. line Your

Thank you very much.

about question around forward. we think how going do the quick and a some First, of economics company units

look sort shrink achieve run essentially it? guess, I obviously, to reflect So improvement bring production positive level, especially had you territory as nice quarter, at rate, in about of these a an run unit think spending. then you sustainable And the these more that the to like Do What we and need see as volume the or losses would and it? quite we should in, the losses. R& is sort a to that new the view the into in SG&A rate a Or improvement cadence or D increases? of rate bit you've gross be at of type as of how I that cash, guess

Emmanuel. Thanks,

manage we're through as with we've you that in prudently made across performance and to itself. OpEx off, First our now the QX encouraged you're progress our noted, that the really operating the board, expenses seeing

the a for baseline, in itself. increase that perspective, those of of to And result relative R&D Drive introduction commercial to in LFP that's our pertains is from the will is the level development that an unit lot it and van QX program of the more underway so pack our Enduro work largely the the R&D As expectation expenses of of spend QX. in

see a contribute same the in to aggregate will expect in backdrop R&D builds experience. development spend that that do are the that So increase of as customer of OpEx while happening a we're in the efficiency, heavily time, in at we're lot to investing we lot overall our capital we expect there's driving But continue QX. to in that to manage

that within ongoing really as the efficiency the open dimension continuing is and on of second And for contributes which to you goods costs COGS a our of a business. question centers incredible overall additional the things business answer look to up an had go-forward as the go-forward of like unit basis, the So SG&A also economics on looks that one our on unit and every basis is fixed across balance cost to control our we're most basis, service driving you that as majority today, that understand that's I important first what pieces nature, we're scaling think sold, network, of at then per charging to but on in well. us

is our biggest And lever a focused perspective. ramp from on really production so have we the

heard be to providing economics to we've in see the is we've talk thing and from as the fixed XXXX-time step one to seen positive current that about take talked well gross of cost as the frame. myself core a the would is costs a margin progress opportunity as expect path two-thirds material walk our that as RJ really I helpful about we that That to from move gross maybe start-up-related perspective, pertains biggest that So bit in already in reflects a about QX. of some in the margin versus our unit current think guidance to leverage we And it change drivers lever, And from past, state that XXXX. surprisingly, not really state the to walk. and as inputs you QX beyond margins you that

wanted ramp from you sense So a economic perspective. just overall how an make that sure magnitude is for the had important just of to unit

The second us is pricing. for key associated driver with

even well. X have configured could average allows the the about exciting really into that go-forward post-March in on to ASP. in got coming As preorders drive that, believe fold lot higher our we next-generation the a that And well be past, $XX, that meaningfully technologies talked us as ASP of XXX a as will book order we've reflect a we've basis that

doing certainly our really in is of then the bill the the least, now walk. materials. not lever around all and but right that work core we're of reduction of second economic that focus core last So that's And finally,

And in engineering map our road So finally, all bill meaningful drive place importantly, over the and and have then the we cost within of of that design materials savings of the changes procurement that next teams to couple the years. work supply the partners cost-down economics doing own continues we Rivian business. work are out business drive and better our to the continue commercial grow as and hand-in-hand opportunities with as and manufacturing for around unit its to capacity chain scale importantly,

question that guess, and ask detailed that flow? you're, clarification on I XXXX, number the facing walk of have is these place. fact quick this you incredibly does specifics cash at correspond on right free then just a volume the on a economics think That's helpful. and I Can that I unit the that with and work or But the essentially with these targets match where

I guess? in So guess what I between, happens

scale, how We'll continue the and improvement ongoing board. performance to we as of across is important given ramp see the magnitude especially

X it base, to Rivian And those of so to as step XXXX, gross place of the profit. in about of have from here road you perspective, engineering that importantly, the all together and that drive think the change pertains map we piece as meaningful that it to see key ramp, changes as design a these lot production is in pertains to important you composition really come preorder a post-March moving in that each levers

as of cash the on of of CapEx I so a low but Okay, this And year, then some Should flow out. XXXX movements? some billion the free CapEx efficiencies this also with we of year into view being, be how it of about going was that's $X think in ahead year year previous maybe result think think, should in, next timing these some clear. forward? I side, your

still some be billion there XXXX. of low CapEx that from in $X push well, even despite spend the be as We expect CapEx to should will that fact that area XXXX

Okay. Thank you very much.

Wells of question next Langan the with comes Colin Fargo. from line Our

open. is Your line

last Thanks for question. -- taking you after the reported. pretty was my IRA when new

Just trying to get your latest thoughts.

are customers? mentioned the tough LFP that also some how does hitting impact to kind You or check benefit of credit term? pretty credit suppliers of makes your insomuch going sort a year. of and the how of And and mean, think some There's the of there. might commercial to sense are still capture you with able most longer they as LFP margin? work early LFP rules around Are little I next sort back that on that's side, uncertainty get you from that to your of Do

so life, in LFP, nickel lots regards that is cell, probably With vehicles this see to works chemistry, as relative of to charge/discharge a to a that cycles require it well cell. it just to high really speak cycle high a vehicles

lower but cycle energy energy associated to an into large nicely perfect to of from storage in a slightly point volumetric do with have density the so fits cell achieve really physically applications space. Further, because a the that's space LFP view. larger a fit life a it vehicle are to you enough the application And commercial pack

source with on not bullish cell. quite stringent for commercial of And to applications to IRA, requirement we're a there's LFP. regards So interestingly,

And so this is really important.

XXX weight the So call, those classes. as as for credit regardless you commercial vehicles, vehicle incentives of gross the weight vehicle commercial last of stands $X, grow size in low higher we into gross talked cell. about of the low And source vehicles move GVW

benefits real. are point the Now meaningful high inherent I'd also The of at do evolve. supply chain an high the level chemistry advantages. believe There that are is will referenced out we cycle a life LFP I applications second for thing

the achieve make for and of a see cathode domestic we other remove the nature and as some you material it's the view, point certainly, long of chemistry notwithstanding the easier maintain not, nickel you in compliance point term view, so U.S. course, And from the cells cell, you Above that, an LFP pointed today. opportunity of supply cells compliance. supply as that already an chain precursor compliance materials. but cobalt, actually supply for IRA by there's so an remove But active lot the from building beyond of for to both out, raw of a LFP an fact to a to also well the that is there's cell as on, it chains sure of production of material LFP easier

will have the Because credits, not of some I'm been might customers I do like cost-plus on that And your sure you commercial I there benefit? get for think think some feel mean, of the vehicles. arrangements us

our -- also will the specifically, IRA. believe manufacturer-facing credits. are some of that commercial our we with Do with customers, large those There's achieve commercial our that customer credits business we're launching

both the cognizant credits, manufacturer-facing. both So those of well very the or sides the of as customer-facing consumer we're managing as

just And Got last question. it.

Mercedes, footprint work? On split does mean, established any Is an a the the obviously because has with fixed Because is production amount? venture there. joint I concern there there how Mercedes

could work over the of is sort sort does How of Or the have take allocation you demand, most So each production? there's you it of that production? just an of in if agreement?

to how lot our and of At working this exactly a signed venture, still be announced specifics of in it defining we're there's MOU will a done lot of agreement. work. an point, We've through but of still the terms joint this around work

taking for my question. Thanks Okay.

comes question line Brinkman from of the final with JPMorgan. Ryan Our

Your line is open.

in planned for just production a Maybe Thanks taking couple questions. the XQ. here in increase around my

sequential full XX% on from about I XQ's, think, top reiterated year growth a improvement. it I your of implies XX% outlook, squeezing think

too? So weeks experience firstly, what the has Are X shift, you've quarter, share XQ. that et you XQ shortage? in component here is to component to so specific your regards what you mentioned with cetera, in able past the maybe cycled the being And short of in or a if second far that been first

this chain, of talking we're relative seeing spent Ryan, some we've just talked broadly half the the about just was. about time particular, to how within the improvement first in that challenging before supply we've year, which

that absolutely of components hundreds from But with and Claire had we're improvement, days takes of that thousands has from supplier component lost So we already only suppliers, to vehicle line. earlier, stop part a referenced continue it suppliers X seeing because shortage. this X of a single X as the coming And to quarter we see. and supply

having to to manage supplier again that we contingencies And is to really we've that instance it spent avoid component be have robust with forward. but this something built to supply we believe with going challenges interruptions. to going types happen allow working and this continue risk of that Now closely time with to specific certainly lot the without and continue of believe settled do a do of component this we ramping those that chain, us there's to them

spending And preserving discretionary helpful. lastly, very talked free I cash outlook had into quarter, then CapEx Okay, by think some about that just last you was deferring year. next

how relative Now next year to what you’re maybe RX might with have that? otherwise the the pushout thinking looking Are of plan? are bit, trim expenditures you to the a about capital been

down took As you perspective from CapEx our both year. heard, we a this guidance

billion in not mentioned, that $X movements. into that at spending a And as even does be so incremental we we're expect that area then year plant in aggregate, in build-out some I is still Georgia. those shift towards next next part But capacity of to low benefit with same year. the in have the And

Thank Okay, helpful. you. very

remarks. back would turn now the I to closing like over RJ to call for

joining of Thanks, broad the great to was call. It here such have spectrum today. questions everybody, a for

our that, our And both the our and deliver we look the but focus reiterate the as core growth soon continued critical course, core, only for of deliveries a to driving their looking vehicles, us. on the I that very of efficiency on ramp of cost this Claire on to that's as expenses importantly some the ramp how production continued we of help customers in them of us bring operating throughout RXT, capital their CapEx out made from business across And well our view. really but of point get focus. points ensuring possible, a sold their the deploy in call, as them just across economics with RXS not impact customers, not into excited and goods XXXX, to we forward line. to business, as The has is and Just we're as continued into our

everybody, joining, our call. and So with you, earnings next that, thank forward to for look we

for this gentlemen, call. today's Thank concludes and your participation. Ladies you conference

now may You disconnect.