Rivian Automotive, Inc.

Thank you for standing by, and welcome to Rivian Fourth Quarter Fiscal 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star 1 on your telephone. If you require any further assistance, please press star 0. I would now like to hand the conference over to Tim Bay. Vice President of Investor Relations. Please go ahead.

Good afternoon, and thank you for joining us for Rivian's fourth quarter 2021 earnings call. Joining us on today's call, we have RJ Scaringe, our Founder, Chairman, and Chief Executive Officer, Jetan Bell, our Chief Growth Officer, and Claire McDonough, our Chief Financial Officer. A copy of today's shareholder letter is available on our Investor Relations website. Before we begin, I would like to remind you that during the course of this conference call, our comments and responses to your questions reflect management's views as of today only and will include statements related to our business that are forward-looking statements under federal securities laws, including without limitation statements regarding our market opportunity, industry trends, business operations, strategy and goals, our second domestic manufacturing facility, and our expectations regarding vehicle production. Actual results may differ materially from those contained in or implied by these forward-looking statements due to risks and uncertainties associated with our business. Except as may be required by law, Rivian does not have any obligation to update or revise such statements if circumstances change. For a discussion of the material risks and other important factors that could impact actual results, please refer to the cautionary statements and risk factors contained in SEC filings in today's shareholder letter, both of which can be found on our website at Rivian.com forward slash investors. During this call, we will discuss both GAAP and non-GAAP financial measures. A reconciliation of GAAP to non-GAAP financial measures is provided in today's shareholder letter. With that, I'll turn the call over to RJ, who will begin with a few opening remarks.

Hello, everyone, and thank you for joining us this afternoon for our earnings call. Before we dive in, we wanted to first take a moment to address the crisis in Ukraine. As an organization, we are deeply concerned about Russia's invasion and stand by the people of Ukraine. The humanitarian crisis resulting from the current development is clearly becoming a focus of governments and companies around the world. We are inspired by the actions so many have taken and will continue to evaluate ways we at Rivian can show our support. As Tim mentioned just before the call, we published our shareholder letter which includes an overview of the progress we've made over the recent months. I would encourage you to read it for additional details around some of the items we'll cover on today's call. We'll touch on our recent achievements, production progress, and product development. Before we do that, I want to personally address last week's pricing announcement. We released an update to our R1 product portfolio that included our new dual-motor propulsion system as well as our standard battery pack. The dual motor propulsion system consists of a single motor drive axle where we've integrated the drive unit, the inverter, the gearbox into a really power dense package. And in a dual motor application, we put one of those in the front and one of those in the rear of the vehicle. And in total, it delivers over 600 horsepower and achieves zero to 60 in less than four seconds. It's really cool. We also use that drive unit and a single motor application as a front drive unit in our commercial delivery vans. Along with that, our standard battery pack is leveraging LFP and LFP chemistry. And that chemistry not only allows us to offer that pack at a lower cost, but it really fits commercial applications well. And it's first going to be launched in the commercial vehicle platform later this year, and then will make its way into our consumer vehicles by late 2023. Now, as we develop these new offerings, we need to make sure that these offerings could fit into our product portfolio. And to do that, we revisited the overall pricing strategy. Prior to the pricing changes, our R1 platform had a price range without options of $67,500 to $83,500 and only included quad motor variants. With the addition of these new product offerings, the R1 platform's price range is now $67,500 to $95,000. including both quad and dual motor configurations, as well as the standard range LFP battery pack. On March 1st, we announced the dual motor and standard battery pack along with this updated pricing model. In applying the updated pricing to existing Priora customers, we failed to appreciate that customers view their configuration as price locked, and we wrongly assumed Priora customers would be open to reconfiguring to the recently announced dual motor configuration and standard battery pack if they wanted to maintain a similar price point to the original configuration. We recognized this was a mistake and quickly moved to honor the original configured pricing for our pre-March 1st pre-orders. Our relationship with customers is the most important aspect of what we're building, and we believe our early customers are critical for establishing the brand foundation needed to support many millions of sales across our future vehicle portfolio. Since launching in 2018, We believe the brand loyalty we have forged is one of our most valuable assets and something we believe will continue to drive network effects moving forward. With this, we remain highly confident in our ability to address the massive market opportunity that sits before us. Electrification is at a tipping point, as trillions of miles traveled each year across the planet transition to EVs. This is a massive shift and one that requires multiple companies to be successful in building interesting products that give customers lots of choices. While the near-term industry conditions remain very fluid, our path to creating long-term value is unchanged. We are targeting the most attractive market segments with exceptional products. In the consumer space, we're building a global brand that applies to a wide range of product sizes and markets in the truck, SUV, and crossover segments. In the commercial space, we're launching with an initial focus on last-mile delivery through our partnership with Amazon and we'll use this critical scale to support growth across the commercial space. We are in a unique position to establish significant last-mile market share through our Amazon partnership and have the opportunity to capitalize on software and services through FleetOS. We are vertically integrating core technologies that ensure our products continue to lead, enable us to move quickly to make enhancements, and provide long-term structural cost advantages. The initial feedback from customers and third parties has been really rewarding to see. From customers excited about the most recent OTA to Motor Trend selecting our R1T as their 2022 Truck of the Year, our products continue to generate a lot of enthusiasm. All this excitement continues to provide momentum to the brand. As of March 8th, we had approximately 83,000 pre-orders. Our pricing model, which encompasses the dual-motor drivetrain and standard pack, has demonstrated continued strong demand, with pre-orders following the pricing update remaining at approximately the same rate as prior to the announcement. Demand remains extremely robust. With our 2022 priorities, we've been very focused on ensuring we have the right team working towards our mission. Next week, we'll be announcing our new COO that'll be responsible for helping to scale our production and supply chain. We've also continued to hire great leadership across the business to keep up with our rapid scaling. Ultimately, the strength of our team is what determines our ability to execute our vision. Not surprisingly, our highest priority for the remainder of 2022 is ramping production of our normal Illinois manufacturing facility. As of March 8th, we produced 1,410 vehicles this quarter and 2,425 vehicles since the start of production late last year. During the last two weeks, we've averaged a weekly production rate that is approximately two times the XR rate of the fourth quarter of 2021. With that, I'd like to talk a bit about the R1 production ramp. This ramp's progressing well across all areas of the R1 production line. And we're achieving demonstrated production rates that are in line with our expectations. And with all this progress, the biggest constraints we now face really lie with the supply chain. And it's really a small number of parts for which the supplier isn't ramping at the same rate as our production lines are ramping up. I want to talk just about one specific area. Previously, we talked about battery modules. And this was a constraint that we saw at various times through Q4. And as you may remember, we have two module lines, module line one, module line two. And module line one is now running at twice the speed at what we saw at the end of 2021. And module line two is ramping up very quickly and in line with our expectations. With line one and line two now ramping, battery modules are no longer a constraint for the plant. With that, I also want to talk about R1S. And R1S is being ramped very methodically. We learned a lot from what we went through in the fourth quarter. And as we're methodically ramping this up, we're balancing component supply for the parts that are different in R1S relative to R1T. And we're also managing the fact that that product is coming up behind the R1T in terms of its level of ramp maturity to make sure that we're optimizing for overall production output for the line. Now with that said, we should also talk about EDV. And the EDV ramp is quite a bit different than what we've been through on R1. It benefits from all the learnings you'd expect from the EDV line really being our second production line. Operationally, the line is ramping as intended without any major surprises or roadblocks. But as we've seen with R1, we are gated by a number of supplier ramp challenges. And given that the EDV production lines are capable of ramping faster than what we saw with R1. These supply constraints feel more pronounced than what we experienced in the initial weeks of ramping R1. With these supply constraints, the EDVs being built are being used to refine the digital integration of our software systems with Amazon to ensure alignment with the standard operating procedures for these vehicles. Feedback from Amazon and the drivers on the software is quickly being ingested, and we're using that to drive the OTAs on the platform. With all this, we expect EDV production to ramp considerably during Q2. Now, it's worth noting the challenges our suppliers are facing vary and include company-specific production issues, COVID-related delays, and semiconductor allocations. We're working closely with any of these constrained suppliers to identify component challenges early so that we can support the supplier ramp and develop alternative solutions if needed. While the 2022 production ramp is a core focus from an operational point of view, our future technology and product pipeline are also really exciting. As a preview of some of the major initiatives, we're developing a proprietary 800 volt architecture, which includes new in-house drive units that will further enhance performance and efficiency of our announced dual and quad motor configurations. This higher voltage architecture also includes onboard charger, DC-DC converter and DC-AC converter, where the power stages of the DC-AC and the AC-DC are bidirectional and share semiconductors, magnetics, and the controller. We're also developing a heat pump-based thermal system, and along with that, a range of new battery packs, including what I talked about before, the LFP chemistry, an LFP chemistry being used within these packs. Now beyond the in-vehicle power electronics, we also continue to develop our portfolio of charging and energy products to expand really beyond what we've already talked about and shown in our DC chargers to include a bi-directional home charger and home energy products. And the technology work isn't just focused on propulsion platforms or charging or power electronics. We're also developing an improved network architecture and the associated electronics topology to consolidate multiple compute platforms for reduced cost and complexity. We're developing our next generation of perception hardware along with that, and that perception hardware is being used with a new, higher compute platform for the autonomous system. We believe that all these investments and all this technology will really increase the desirability and, of course, the capability of our vehicles. while also delivering improved unit economics on the vehicles. Next, let me pass the call on to Claire, who will provide an update on our financials and the business outlook.