Rivian Automotive, Inc.

Good day and thank you for standing by. Welcome to the Rivian Second Quarter 2024 Earnings Conference Call. At this time, all participants are in a listen-only mode. Please be advised that today's conference is being recorded. After the speaker's presentation, there will be a question and answer session. To ask a question, please press star 1-1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1-1 again. I would now like to hand the conference over to your speaker today, Tim Bay. Vice President, Investor Relations.

Good afternoon and thank you for joining us for Rivian's second quarter 2024 earnings call. Before we begin, matters discussed on this call, including comments and responses to questions, reflect management's views as of today. We will also be making statements related to our business, operations, and financial performance that may be considered forward-looking statements under federal securities laws. Such statements involve risks and uncertainties that could cause actual results to differ materially. These risks and uncertainties are described in our SEC filings and today's shareholder letter. 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 our shareholder letter. Just before the call, we published our shareholder letter, which includes an overview of our progress over the recent months. I encourage you to read it for additional details around some of the items we'll cover on today's call. With that, I'll turn the call over to RJ, who will begin with a few opening remarks.

Thanks, Tim. Hello, everyone, and thanks for joining us today. During our call, I will highlight key developments in the second quarter and provide an update on the progress we're making against our value drivers. Prior to discussing quarterly details, I want to reinforce the key messages conveyed in depth during our recent investor day. To achieve the full potential of our vision, we need to aggressively drive towards profitability. The fundamental levers underpinning this goal include the recent transition to our second-generation R1 and the subsequent introduction of our midsize platform, which underpins R2. I'm encouraged by the progress ramping up our second-generation R1 vehicles, as well as developing R2, which we expect to launch in the first half of 2026. The ability to dramatically reduce cost in a condensed timeframe and drive continual improvement in the customer experience is based on our intentional approach to vertical integration. From the beginning, we have vertically integrated certain components of the vehicle, driven by the desire to create superior customer experiences and deliver long-term structural cost advantages. The success of this is demonstrated by a recent J.D. Power appeal study where Rivian received the highest score and the most satisfying brand across the automotive industry. We spent years developing key technologies such as our software, electrical hardware, autonomy, and propulsion. The significant cost and performance benefits from these technologies gives us confidence in our ability to continue developing and building highly desirable vehicles across the R1, R2, and R3 product lines. As a testament to our industry-leading technology platform, on June 25th, we announced the expected joint venture with Volkswagen Group. The announcement validates our technology platform and is expected to substantially expand the market applications for our software and associated zonal electrical architecture. Rabian's proven electronics and software platform is expected to serve as the foundation for future software development in the partnership. The technical workstream to prepare the integration of our electrical architecture and software technology stack into Volkswagen Group products is moving along very well, and we expect to close the joint venture in the fourth quarter of this year. As the auto industry transitions to smarter, more connected, more complex, and integrated vehicle architectures, we strongly believe our technology is best positioned to deliver a modular and scalable platform that will help create highly compelling products and services that we expect will accelerate consumer shift to electrification. I also want to take this opportunity to acknowledge our team, who has continued to execute on our second generation R1 ramp of production and deliveries, R2 development, and the formation of our joint venture with Volkswagen Group. During the second quarter of 2024, we successfully completed the retooling upgrade in Normal. This was a pivotal operational event for the company. The upgrade introduced new technologies and cost-focused material changes into the R1 vehicle platform, while also incorporating manufacturing process improvements that are expected to improve cycle time, utilization, and cost. For example, we have reduced complexity and lowered the cost associated with the vehicle body with a heavy emphasis on removing parts, processes, and steps. These changes have reduced nearly 1,500 joints and contributed to an expected 30% improvement in the R1 production line rate. Following completion of the retooling upgrade, we resumed production and are encouraged with the early progress of ramping our second generation R1 variants. The new R1 vehicles have hundreds of design, engineering, and performance upgrades, with the most significant being an entirely new zonal architecture, new compute and autonomy platform, new in-house drive units, and a reengineered suspension system. The introduction of the second-generation R1 platform, combined with commercial cost downs and commodity tailwinds, are expected to enable significant material cost reduction. Importantly, I want to emphasize there is more to go. We are focused on reducing R1 costs beyond 2024 through lower material costs and conversion costs. As we continue to source materials for R2, we are seeing opportunities to further reduce the cost of R1 through additional supplier cost reductions. In addition, we believe the expected joint venture with Volkswagen Group will allow us to achieve more favorable pricing from suppliers. This includes components, chipsets, printed circuit board assemblies, and all the associated content that relates to those hardware systems. I want to delve in further on our new second-generation drive units, which represent a significant change in capability and cost. The second generation R1 includes our ascent motor system, which underpins our new tri-motor and quad-motor. These motor configurations, in addition to our dual motor released in 2023, mean all motors on all Rivian vehicles are now designed, engineered, and manufactured fully in-house. The 850 horsepower tri-motor variants are expected to start deliveries towards the end of the third quarter. The tri-motor variant is equipped with two ascent motors in the rear and one enduro motor in the front for a blend of exceptional power and range. The tri-motor R1T delivers 0 to 60 miles per hour in 2.9 seconds while offering an estimated range in conserved mode of approximately 400 miles. The quad motor is designed for peak adventure with four scent motors. The quad motor delivers 1,025 horsepower, 0 to 60 in less than two and a half seconds, and achieves the quarter mile in less than 10 and a half seconds. Feedback on our second generation R1 has been very positive. It is a fundamentally better vehicle while simultaneously costing less to build. We're excited to get more of our second generation products to customers and available for demo drives in the coming quarters. At Rivian, we wake up every day thinking about ways to make our products better. This is based on our sense of urgency in transitioning the world towards a fossil fuel free future. This is possible by creating products that are deeply exciting to consumers, products that carry attributes and design characteristics that pull people out of internal combustion vehicles, because they're experiencing something that isn't just better for the environment, but also really enjoyable and desirable to use every day. I would like to thank all those who continue to support our vision, including employees, customers, partners, suppliers, communities, and shareholders. With that, I'll pass the call to Claire.