Rivian Automotive, Inc.

Good afternoon, and thank you for joining us for Rivian's first quarter 2026 earnings call. Today I'm joined by RJ Scurringe, our CEO and founder, Claire McDonough, our chief financial officer, and Javier Varela, our chief operations officer. 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 law. 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 the earnings presentation we filed with the SEC today. During this call, we will discuss both GAAP and non-GAAP financial measures. A reconciliation of historical non-GAAP to GAAP financial measures is provided in our earnings presentation and press release. Just before the earnings call, we posted our earnings presentation, which includes an overview of our progress over the recent months and replaces our shareholder letter. I encourage you to read it for additional details around some of the items we will cover on today's call. Following our prepared remarks, we will be taking questions from sell-side analysts. In the interest of keeping our call to one hour, we would ask these analysts to limit any follow-on questions to one. With that, I'll turn the call over to R.J.,

Thanks, Chip. Good afternoon, everyone, and thanks for joining us for today's call. Last week, I was thrilled to celebrate the start of Sailwell R2 production with our team at our plant in Normal, Illinois. It's an exciting milestone in Rivian's history and the culmination of all the hard work and energy from so many people across the company. As I've said before, I believe the R2 will be a game changer for our customers and will be a key driver of our company's long-term growth and profitability. In an American automotive marketplace starved for high-quality EV choice, I believe R2 is an attractively priced option sized for everyday ventures from school pickups to weekend trips that is targeting the very popular five-passenger SUV and crossover segment. With R2, we are taking our design, performance, and technology and bringing it to a significantly broader audience without losing what makes Rivian unmistakably Rivian. We've started R2 deliveries to our employees, and I have to say I absolutely love having R2 as my daily driver. I could not be more excited to get this vehicle into the hands of lots of customers starting this spring. In developing R2, our team relentlessly focused on achieving structural cost reductions while maintaining the desirability of the product. For R2, our bill of materials is expected to be approximately half of our R1 platform. For non-bomb cost of goods sold, we expect to see a reduction of more than 50%, resulting from a focus on design for manufacturing and leverage fixed cost efficiencies through higher production volumes. This is how we expect to profitably deliver R2 at an accessible price point at scale without compromising performance and utility customers love from Rivian. Key design changes for R2 include part eliminations and reductions through the introduction of large die castings, a structural battery pack, a new highly efficient drive unit, the evolution of our next generation electrical architecture, which removes miles of copper wire, and the consolidation of our high voltage electronics into a single enclosure. We are also seeing significant sourcing leverage relative to R1 across a variety of components. Now, as we begin to scale our operations in normal with R2, we're very excited to partner with the U.S. Department of Energy to grow our manufacturing footprint in Georgia. R2 provides the opportunity to expand the Rivian brand to millions of drivers. As a result, we made the strategic decision to increase the production capacity for the first phase of our Georgia plant by 50%. bringing it to 300,000 units of annual production capacity for a midsize vehicle platform. This change is expected to boost cost efficiency while still providing significant room for future expansion in later phases and support thousands of jobs in Georgia as we grow American manufacturing and work to ensure the U.S. retains its leadership and innovation in technology and transportation. We remain on track for the production of our midsize vehicle platform to begin in Georgia in late 2028. Turning to our technology roadmap, in March, we were excited to announce a new strategic partnership with Uber to accelerate our shared autonomous vehicle goals. In the not-too-distant future, I believe advanced autonomy capabilities will be a key differentiator for customers and the driver of market share. At the core of our third-generation autonomy hardware is the Rivian Autonomy Processor, or RAP1. The development of our RAP1 chip is on track and we are progressing well on validation and reliability testing. Our integrated approach allows our hardware team to rapidly iterate with our software team and our autonomy feature development is progressing well and we continue to expect to begin rolling out point-to-point capabilities by the end of the year. Finally, in the coming weeks, we are excited to launch the Rivian Assistant on R1 and R2 vehicles. The Rivian Assistant is our new AI-powered voice assistant that is built to be a digital co-pilot with integration into the vehicle ecosystem and other external apps. In closing, this quarter our team has executed across many fronts, laying a strong foundation for the years ahead. As an American automotive technology company, we're building for a future that we believe will be fully electric, autonomous, and AI-defined. With our category-defining brand, the launch of R2, which is our first mass-market vehicle, vertically integrated and extensible technology, and a direct-to-consumer sales model, I couldn't be more excited about the opportunity ahead for our customers and for our business. With that, I'll pass the call over to Claire to discuss our financial results.

Thanks, RJ, and good afternoon, everyone. As RJ shared, the start of saleable R2 production and initial employee deliveries are a landmark moment for Rivian. By building R2 in normal, we are strategically leveraging our existing manufacturing footprint in Illinois to drive greater fixed cost absorption across our entire vehicle portfolio. As discussed previously, R2 production is starting with a single shift operation and we expect to scale to two shifts by the end of 2026 as we ramp towards our North Star target of profitably delivering 4,000 vehicles per week in normal. Delivering a strong 2026 exit rate for R2 production and deliveries is a key focus for our team as we believe it will directly translate into positive automotive gross profit for the business. Turning to the results for the first quarter, as depicted on slide 11 of the earnings presentation, our consolidated revenue in the first quarter was approximately $1.4 billion, an 11% increase over the same quarter last year. Consolidated gross profit was $119 million, and our gross margin was 9%. Gross profit included $122 million of depreciation and $27 million of stock-based compensation expense. Adjusted EBITDA losses for the first quarter were $472 million, driven by our $119 million of gross profit and increased adjusted operating expenses as we prepare to scale our two and invest in our autonomy roadmap. In the first quarter, we produced 10,236 vehicles and delivered 10,365 vehicles, which was the primary driver of our $908 million of automotive revenue. Automotive gross profit loss was $62 million compared to $92 million of gross profit for the same quarter last year, primarily driven by the $100 million decrease in sales of automotive regulatory credits and lower production volumes, which resulted in a $45 million increase in depreciation and stock-based compensation expense combined. While current macro and geopolitical factors are creating added complexity, cost, and uncertainty, our team continues to work hard to manage supply chain risks and offset elevated costs. Our software and services segment reported another strong quarter, as depicted on slide 13. During the first quarter, the segment generated $473 million of revenue, a 49% year-over-year increase, and $181 million of gross profit. $282 million, or approximately 60%, of software and services revenue was attributable to our joint venture with Volkswagen Group. We also experienced strong growth from remarketing and parts and service. During the quarter, we also recognized $506 million gain in other income in our financials related to the Series A capital raise and related deconsolidation of Mind Robotics from our financial statements. We currently own approximately 38% of Mind Robotics on a shares outstanding basis. Looking at our balance sheet, we ended the quarter with approximately $4.8 billion of cash, cash equivalents, and short-term investments. With regard to our funding roadmap, in 2026, we expect to receive a total of $2.55 billion of capital from our strategic partners. Today, we received $1 billion from Volkswagen Group in exchange for equity following successful completion of the winter testing milestone by RVTech. The testing program spans several months, utilizing reference vehicles from the Volkswagen, Audi, and Scout brands. Later this quarter, we expect to receive $300 million from Uber in exchange for equity related to the signing of our partnership agreement subject to certain conditions. And later this year, we expect to receive $1 billion in non-recourse debt from Volkswagen Group and an additional $250 million from Uber in exchange for equity, subject to the completion of certain milestones and conditions related to robotaxi development. As outlined on slide 14, this brings total available liquidity and expected capital in 2026 of nearly $8 billion. Additionally, we're very excited to partner with the U.S. Department of Energy to grow our U.S. manufacturing footprint. The up to $4.5 billion DOE loan, which consists of approximately $4 billion of principal and approximately $500 million of capitalized interest, provides low-cost financing for our 300,000-unit capacity greenfield expansion in Georgia, bringing Rivian to meaningful scale. We expect the 515,000 total units of capacity between our Illinois and Georgia plants will provide Rivian a path to free cash flow positive once fully ramped. We expect to draw on the loan by early 2027, subject to certain conditions. Two weeks ago, our normal factory sustained damage from a tornado. I'm proud of the way our teams have rallied together to get production back up and running while we repair the damages. Despite the weather impact, our 2026 guidance remains unchanged. We continue to expect full-year deliveries of between 62,000 and 67,000 total vehicles across R1, R2, and our commercial vans. We also continue to expect to deliver approximately 9,000 to 11,000 vehicles in Q2, as we expect the ramp of R2 deliveries will be back half-weighted. While we continue to believe our gross profit will increase year over year, we expect the complexity of a new vehicle launch will negatively impact our automotive gross profit in the second and third quarters before becoming a benefit for our overall operations in the fourth quarter as we ramp production and deliveries. As a reminder, we believe this is a transition year for the automotive segment's path towards long-term profitability as we scale our two. For 2026, we continue to expect an adjusted EBITDA loss of between $2.1 to $1.8 billion. While economic and geopolitical conditions, including supply chain and international conflicts pose risks, we remain steadfast in our plans to invest behind key growth drivers. We continue to progress our autonomy roadmap and the expansion of our sales and service footprint as we scale with our two. We believe these strategic investments will deliver long-term value to our shareholders. Finally, for 2026, we are maintaining our capital expenditure guidance of $1.95 to $2.05 billion. Our CapEx spend primarily relates to finalizing construction and tooling for R2 in Normal, the continued build-out of our sales, service, and charging infrastructure, and kicking off construction of our Greenfield plant in Georgia. In closing, I'd like to congratulate our teams again for the successful start of saleable R2 production and the strong execution in the first quarter. We continue to believe that R2 and our technology roadmap will be truly transformative for the growth and profitability of our business. I'd like to turn the call back over to the operator to open the line for Q&A.

Thank you. For the Q&A section of today's session, we will be utilising the raise hand feature. If you would like to ask a question, click on the raise hand button at the bottom of your screen. Once prompted, please unmute yourself and begin with your question. We will now pause a moment to assemble the queue. Thank you. Our first question comes from Shreyas Patil from Wolf Research. Please unmute your line and ask your question.

Hey, thanks so much. Appreciate you taking the questions. Maybe first, just picking up on a comment you made earlier, Claire, if you could help give us some more color on some of the actions you're taking to mitigate the increase in commodity costs and some of the metals prices that we've seen increase recently. And what's been the magnitude of increase, if you could help frame that?

Well, thanks for the question. Yeah, we're spending a lot of time, of course, focused on all the changes that are happening from a supply chain point of view. And in terms of raw materials and some of the costs of metals, specifically aluminum, this has been a big focus for us. Fortunately, our sourcing team has been sort of we've grown our sourcing team and involved our sourcing team over the last handful of years where supply chain continues to be an area where there's a lot of unknowns, there's a lot of variability and a lot of, you know, a need for us to be very hands-on and very proactive. And so we've been proactive in both our relationship with existing suppliers, but also in making sure we have, particularly in some of these key commodities, alternative sources of supply.

Okay, great. And then maybe, Claire, just to clarify, I think you've made a comment about how when normal and the Georgia facility are fully ramped, you'd be getting to free cash flow positive. I just wanted to make sure if I understood that correctly. And If that's the case, you know, that could be quite a while from now. So maybe just help us understand sort of the trajectory of CapEx, maybe near term, but then also as we kind of think ahead and you start to kind of put more in the ground at Georgia.

Sure. Trace, the comment that I made on the Rivian's ramp of its normal facility plus Georgia facility is what takes Rivian to free cash flow positive in the future. As we talked a little bit about in our prepared remarks, importantly, we have the $4.5 billion of capital from the Department of Energy loan, which provides up to 80% loan to value against the build-out of our future Georgia facility. So while we certainly will see an anticipated increase in our capital expenditures as we approach the start of production in Georgia. We do have significant offsets from a capital roadmap, and the $4.5 billion is just one component of the full $13.6 billion of total liquidity and expected capital through both the cash that we have on hand on our balance sheet the added availability of our AVL facility, and then the expected capital from our partners with both Volkswagen and Uber that we expect to receive over the coming years as well.

Okay, great. And maybe just one quick clarification. The DOE loan, has there been any change to that? I think the original amount was $6.6 billion that was available. Just curious if there's any change there.

Yeah, so included within our financial release today, we provided an update on the Department of Energy loans. So we'll now have $4.5 billion of loan capacity that will go towards the build out of our first phase of capacity expansion in Georgia. We've also increased the capacity of the Georgia site, the initial capacity from 200,000 units to 300,000 units. And so the comment that I made in my prepared remarks is really the importance of the funding roadmap, especially as we think about the Georgia site specifically taking Rivian to meaningful scale in the future.

Okay, great. Thanks so much.

Thank you. Our next question is from Joe Spack from UBS. Please unmute your line and ask your question.

Thank you. Claire, just to maybe pick up on the DOE loan part and to clarify, obviously this first phase is an increase from that 200 to 300, and again, admittedly just being able to skim the document. It does seem like maybe the total project scope is now – capped at 300 versus, you know, before it was supposed to be 200 in phase one, 200 phase two for 400. So I want to make sure I understand that. And then if you still see an opportunity, you know, over time to, you know, grow further in Georgia.

So the strategic decision that we took was to increase the initial phase of production capacity to the 300,000 units. On our Georgia site, the full initial capacity will be put on the upper pad at the site. So we have the lower pad, which is still going to be entirely untouched greenfield for future expansion.

Okay. And that might be funded more organically in the future, not necessarily with... with a loan or it's TBD, I guess, but, but the, the, the loan is really only up for the 300, correct?

So the loan is for the initial phase. The, the important piece is we've increased the loan size associated with the initial phase as we've also scaled the production volume as well.

Okay. Um, and then, um, just, um, You know, I appreciate the comments on input costs and, you know, but I guess the other thing that I was wondering about was with tariffs and this is sort of, you know, come up with a lot of companies as far. Can you remind us like what? You've paid in IEPA roundabout over the past year. And have you filed for any reimbursement? And was anything booked in the quarter related to any potential reimbursements?

We did not book anything this quarter associated with IEPA tariffs. But we do believe that the recovery of those IEPA tariffs is possible in the future. And I contextualize the sizing to be in the tens of millions of dollars of future benefit.

Okay. And is that considered at all in your reiterated outlook, or that would be, you know, upside? I guess it's not significant.

I would characterize it as considered within our current outlook.

Okay. And then just lastly, like I know you talked with Uber, you talked about – pulling forward, you know, raising R&D in 27. Does any of that work start to seep into 26? And is there a change to the R&D outlook for this year or it's really more of a 27 factor?

You'll see the pace of acceleration increase in terms of the spend towards autonomy in 27, but we'll certainly see acceleration throughout the course of this year as well. If you look at Q1, our cash R&D expense increased significantly. about 22% this year for that quarter. You could directionally think about that as being more of a year-over-year type run rate as we look out over the remainder of the year.

Thank you. Very helpful. I appreciate it.

Thank you. Our next question is from Ito McKaylee from DJ Cowan. Please unmute your line and ask your question.

Great. Thanks. Hi, everybody. Just first, going back to the Georgia capacity optimization, curious if it has any impact on your previous long-term financial targets at 25% gross margin. And maybe on that as well, if you can maybe share your initial kind of takeaways on kind of R2 demand generation since you kind of launched the trims.

Well, thanks, E.J. Yeah, and I think, obviously, the decision to increase the capacity of the first phase of Georgia coincides with, or I should say it reflects a level of confidence in our products and our business. I think most importantly, we've just started production on R2 out of our existing normal Illinois facility, and we've had – early media events and early customer events, and the level of enthusiasm for the product has just been outstanding. So everything from the packaging of the vehicle to the way that it drives to the integration of technology, the overall response has been overwhelmingly positive. And so that bodes extremely well for the ramp up happening over the course of this year and into next year. But it also sets up a wonderful foundation for us as we think about further capacity on this platform, both for R2 as well as R3 and variants of those vehicles out of the Georgia facility.

Terrific. And then maybe as a follow-up on the Uber announcement, I'm curious whether the robo-taxis themselves that will go into the Uber network will have the kind of exact same hardware set as the personal vehicles. And I ask because if you're going to launch in 2028 in complex domains like San Francisco and Miami, would that not also imply a pretty wide ODD for the personal vehicles if they're both operating on the same hardware?

We talked about this during our autonomy day late last year, but I think it's important to recognize there's going to be a whole series of steps we make in terms of progressing towards level four. And so in that series of steps, the first later this year on our consumer vehicles is launching our point-to-point capability. And so that's the ability for the vehicle to drive entirely on its own to an address. And, you know, I just this week had we do lots of regular rides internally and I had a great ride with James and the team. And it's so exciting to see how much it's progressed and our technology has progressed even since our autonomy date late last year. And so we're very encouraged by this. But that first step of of making point to point available to customers is going to be a really important step for for our consumer vehicles. As we continue to go into 2027, we'll be allowing in specific areas eyes off. And so it's hands off, eyes off. That's a level three capability. And then as we go into 2028, as you said, that's when we'll have our first deployments of a level four capability in a robo taxi. And in the robo taxi variant, there will be some additional sensing on the vehicle. So it will be different than the pure consumer vehicle. but we are planning to have a personal version of level four as well. And we've talked about that quite a bit. We think the market for a vehicle that you own, being able to completely drive itself, do things like drop you at the airport, go to the grocery store, get groceries for you, pick up kids from a sports event. These are really high value creating activities for the level four capability. And we see them on both robo-taxi applications and on personally owned applications. That's very helpful. Thank you.

Thank you. Our next question is from Dan Levy from Barclays. Please unmute your line and ask your question.

Great. Thanks for taking the questions. I wanted to first start with R2 and the path to getting to a positive gross margin, which I think you said would be by the end of the year. Maybe you could just walk through the gating factors Does, even with the raw mats, do you still have the confidence you have the right bomb to achieve this? And what milestones do we need to see to make sure that the production ramp is still on track? What are the sort of most limiting factors that you still have to address on this ramp?

Yeah, we've talked a lot about the cost structure of a vehicle, and a huge component of this is, of course, the bill of materials. And the bill of materials, different than the non-bill of materials call, is contractual. So these are negotiations that happen across hundreds of suppliers, and very different than when we sourced R1. We went into the R2 sourcing with a lot of momentum and much better supplier leverage. Just the level of confidence in reading as a business and the level of excitement around our 2 helped us put together a set of suppliers that are both very enthusiastic, but that's demonstrated through attractive commercial terms. And so. As it stands, the bill of materials for our 2 is about half that. Of our 1. And there's, of course, things we can't predict, like raw material changes and DRAM shortages. But the vast majority of the BOM is very stable, and we have a lot of confidence in being able to achieve the target BOM, which supports the very healthy gross margins we've talked about in the past. Now, with regards to the plant, I'll invite Javier just to comment on some of the progress that's happening in terms of ramping up over the course of the next several months.

Yeah, thank you, RJ. Indeed, as you explained some minutes ago, we had last week the celebration of the first saleable builds and delivers to customers this week. So very proud of the situation we are achieving now. The industrial process is ready. The people is ready as well. We have... been through the right training and build cycles. And I would say plant is prepared, processes are defined, and we are very confident in our capability to deliver. I feel confident as well Regarding what is our team in place, we have brought in a group of seasoned leaders that they have done launches back in the past and big experience on that area. We are, on the other hand, managing the supply chain, making sure every supplier scales with us. We have boots on the ground supporting some key suppliers, and we are doing this with our mindset in supplier relationships, the relationship of transparency and collaboration. Resilient supply chain, agility, and intelligence are key factors for success.

Great, thank you. As a follow-up, RJ, I wanted to double-click on the point you gave in the prior question from Itay about getting to L4. You'll have point-to-point at the end of this year, and you'll only have the vehicles with the LIDAR end of this year, beginning of next year. It does seem like there's probably a lot of testing that has to happen between when you get those cars with the LIDAR out to the point where you have a launch. So just help us understand what the testing curve looks like, what you need to do from when you have the cars with the LIDAR to being able to unlock L4, because it does seem like there's a lot of miles that have to be driven on that new vehicle.

I think a really important point to make here is just the way the self-driving system is architected. So this is the platform that we launched actually on our Gen 2 R1 vehicles is designed around an end-to-end approach where we're building really what we call a large driving model. But think of it as a neural net or a foundation model for driving. And that model is being fed with all of our Gen 2 R1 vehicles and, of course, our launch R2 vehicles. And ultimately, as you said, our R2 vehicles that include a LIDAR. But very different than previous architectures around self-driving where there are rules based and more classically controlled. As you add more perception and as you add more compute, the capability of the model changes. only grows. You don't lose the previous knowledge embedded in the model. And so I often sort of compare it to imagine if you learn to drive with bad vision and then I handed you a pair of glasses, you wouldn't forget your knowledge as a driver. You just suddenly be able to see and perceive things that you may have missed previously. So you become a better driver. And then imagine we could hand you a 10x multiplier to your compute capability, effectively make your brain ten times smarter. Again, you wouldn't forget what you knew before, but suddenly you'd start to notice new patterns and more nuance in ways that you hadn't in the past. And so that's very important to recognize is the very fundamental difference in how the model is built today and what we're creating versus the more AV 1.0 stack where they were, as I described, a very rules-based and very classically controlled model. And so because of that, the data accumulation has happened already on R1, and that will continue with the growth in our car park with R2, all feeds into our overall LDM, into this large driving model. And even as we think about introducing new sensors, things like our LiDAR, this is not as if it's first on the vehicle when it's delivered to customers. We have lots of prototypes today that are running with those. If you're in the Bay Area and happen to be Anywhere around Palo Alto, you'll probably see lots of ribbons with a lot of additional sensors, and that's part of a ground truth fleet that, again, is feeding into this large driving model to accelerate the speed at which that model is learning. Think of it as a brain, the speed at which we're teaching it to drive. And the work that will go into Oakland launching a customer-facing version of point-to-point, which today, you know, as I said, I was in one of our cars driving around full point-to-point earlier this week. It's really exciting. But we want to have, when it launches to customers, have it be extremely robust. But all that work is accretive to what ultimately will be going into our Level 4 platform. Great. Thank you.

Thank you. Our next question is from Andrew Picocco from Hawkins Stanley. Please unmute your line and ask your question.

Great, thanks so much for taking the question. Maybe just to start on the commercial side of your business, it looks like Amazon made up almost 50% of your auto revenue in the quarter, so a little bit above historical run rates. Can you just maybe talk to what you're seeing with that relationship and maybe even outside of Amazon, the level of maybe interest you're seeing in the commercial product since you launched that extended range version of the commercial vehicle?

Yeah, our relationship with Amazon continues to be something that we're very proud of. We've spent a lot of time on this program from its initial kickoff quite some time ago in 2019 through its initial launch and now ramping, deploying. That's everything from not only building the vehicles, but on the Amazon side, getting their operations and their infrastructure ready to ingest a lot of EVs. And what we're now seeing is a reflection of all that work, all the cumulative work that's happened to date that's allowing the volumes for our van program within Amazon to grow significantly. as you pointed out, pretty meaningfully. And we expect that increased demand for our vans to continue. And that's super rewarding to see. It's fun to see all the vans on the road. But that's going to continue to ramp up with Amazon. Now, in terms of other customers and other applications, of course, Amazon's, by a significant degree, the largest operator. And so they're the ideal lead customer, if you will. But there are lots of other opportunities we see. But in the immediate term, our focus remains on Amazon and ramping to support them.

Okay, that makes sense. And then maybe just – I just want to ask one more question on the DOE revised loan piece here. I understand the movement in phase one and upsizing that. I'm curious why you might not want to use the DOE funding for the eventual phase two. Is this something initiated on your end, or did maybe they approach you in terms of revising that? Just kind of curious the thought process around why not you know, tap that low cost funding for the eventual phase two whenever that comes about. Thank you.

Thanks, Andrew. As I mentioned in my prepared remarks, we're really excited to partner with the Department of Energy on Rivian's $4.5 billion loan, which enables thousands of American jobs and helps us establish the U.S.' 's strength in technology and manufacturing leadership. The DOE loan is uniquely a very cost-efficient form of capital as we spend a little bit of time walking through Rivian's broader roadmap. But specifically, the importance of this $4.5 billion is the funding of Rivian's scaling its operation up to 4%. you know, 515,000 units of overall capacity and the opportunity with that installed capacity base to be, you know, free cashflow positive in the future will continue to be opportunistic as it pertains to our capital roadmap beyond, you know, the components that I had outlined in the existing $13.6 billion of liquidity and total expected capital that we've outlined today.

Great. Thanks for taking the questions.

Thank you. Our next question is from George Gianarikas from Canaccord. Please unmute your line and ask your question.

Hi, everyone. Thank you for taking my questions. So I know it's early days, but I was wondering if you could please give us any color on our two order trends and maybe some color on the conversion ratios relative to previous orders. Thank you.

In Georgia, as you said, it is early days for deliveries, but the signals I'd be looking at are just the reception around the product and how, you know, whether it's expert journalists, you know, automotive journalists or lifestyle journalists or customers that are getting to experience the vehicle, the overall experience. excitement around what we've been able to put together in terms of content features, packaging, just the overall value proposition is really resonating. And I'm I'm really pleased with having spent a very large amount of time in the car as my daily driver. I couldn't be more pleased with the result, the work that the teams did to make something that's truly remarkable. We had a few journalists say this might be the best vehicle ever made. That's wonderful for the teams to hear, and it's really encouraging for us as we get ready to ramp the vehicle.

Thank you. And maybe just as a follow-up, I just wanted to confirm that the Gen 3 sensor suite was going to be available later this year on the R2. Thanks.

That's correct. Yep. So the gen gen three autonomy hardware suite, which is both our in-house wrap one platform. And so this is our in-house inference platform, 800 tops per chip. We have two of those chips in the vehicle. So it's extremely powerful. It's a big, a big increase, roughly a four X increase relative to the NVIDIA based platform. And and then the inclusion of LIDAR as it was referenced before, along with some other enhancements across the rest of the perception stack. Thanks.

Thank you. Our next question is from Mark Delaney from Goldman Sachs. Please unmute your line and ask your question.

Yes, good afternoon. Thank you very much for taking the questions. Starting on autonomy, I'm hoping you can provide more details on the monetization of autonomy plus so far and any data points you can share on that and what that might mean for growth in the software and services business more generally, including if you still think you can grow that segment revenue by about 60% this year.

We're, we're encouraged by what we're seeing in the, you know, as you noted at the start of. Having paid autonomy plus and. You know, it's exceeding our own models on this or. It's the take rates higher than what we expected. And that that bodes really well for us as we, we're going to be growing the feature set quite significantly over the course of this year and the introduction of. Point to point. we think is a major value driver for customers. To be clear, this is, as I said, you can put the address for the location you're going to into the car and the car will fully drive you there. And then following that, allowing you to go eyes off in highway conditions and ultimately everywhere. That means you get your time back. And so we're very bullish on the long-term trajectory to monetize our autonomy on the consumer side. And that's for both hands-off, eyes-on, hands-off, eyes-off, and then ultimately level four for personal consumption we see as a really key driver of value in the long-term. Now, in terms of what that does for our software and services growth, that is going to start to be something we'll see, but it's not something that we're going to be breaking on separately.

Thanks for that, RJ. And then my other question was on demand for the R1. I'm curious if Rivian has seen any improvement in order rates for R1, maybe in response to the recent increase in gasoline prices? and what that might all mean for R1 volumes this year. I think the company had assumed R1 would decline. Is that still your expectation? Thanks.

We're encouraged by the continued enthusiasm for R1. It continues to be one of the market share leaders in the premium category. And in a number of states, it's not just one of the best-selling premium electric cars, but one of the best-selling premium SUVs, electric or non-electric. So that's true in a handful of states. We've talked about that in the past. I think it's hard to say ultimately what's going to happen around demand with the impact of gas prices going up. Of course, it's a consideration. And we do see that manifest in what people are trading in. We're seeing more trades of gasoline vehicles or vehicles are less efficient than what we're building. And so we do see that on the rise. But I think a lot of folks are wondering how long fuel prices are going to stay high like this.

Thank you.

Thank you. Our next question is from Andres Shepherd from Cantor Fitzgerald. Please unmute your line and ask your question.

Hey, everyone. Good afternoon, and thank you for taking our questions, and congratulations on the quarter and all the great progress. I think a lot of our questions have been asked, but RJ, I want to go back to a topic I know you're very passionate about, which is autonomy. And so I guess with R2 beginning customer deliveries over the coming weeks and with the Autonomy Plus now having started this month, just curious on kind of your vision and how you are thinking about that autonomy customer adoption. What type of autonomy penetration rate do you expect for your customer-owned vehicles? Do you expect customers will prefer the monthly subscription or the one-time purchase? Just any color here on your overall vision and and customer penetration adoption that you might be expecting. Thank you.

Yeah, well, Andres, we're very... we're extremely bullish on the importance of autonomy for customers over the next, call it five years. And the rate at which we see customers adopting and selecting autonomy plus, and then ultimately as the feature set grows and the capability grows, that adoption rate growing with it. But I think that there's an even bigger question of just from a society point of view, We've been on a journey of, you know, when we think about autonomy, where level two is, you know, where your eyes are still on the road, but you're still responsible for driving the vehicle. That's like a small appetizer for what you can actually achieve when you get to higher levels of autonomy, where you can take your eyes off the road and truly get your time back, get your time back without the car, you know, digging you to say, hey, look back at the road or pay attention or put your hands on the wheel. And so as that starts to occur, and as people start to experience what it's like to truly have your time back, so take a 40-minute commute, and the idea of getting those 40 minutes back in both directions, we think it's going to be a very sticky experience. And it's going to be something that once you experience it, even if it's indirect, let's say in a friend's car, It's going to become a very important purchase criteria. And the reason I call this out is we really believe over the next five years, the rate of progress of what we're going to achieve with autonomy will look very, very different. And I'm talking here at an industry level versus what we've achieved over the last five years. means that the topology of customer expectations and therefore the way that the vehicle purchases are made and the criteria that are being used to make those vehicles is going to look very, very different in 2030, 2031 than it does today, where autonomy will be a very critical criteria, where customers are willing to pay for it because they want their time back. They want to not have to be paying attention. They want to be on their phone, reading a book, taking a nap, truly getting time back while you're in the car. And so as a result, as you've heard a few times throughout this call, this is an enormous focus area for us as a business. We're very much deploying a lot of our R&D dollars towards this category. And we've made long-term investments in the hardware and in the vehicles to support that.

Got it. That's super helpful. I really appreciate all that color. Maybe just as a quick follow-up, one for Claire. So just regarding your delivery guidance for this year, which is unchanged, I know in the past you've given us some cadence for deliveries in Q2. I think you reaffirmed that on the call just now. Can you just remind us what kind of unit mix we should be expecting for the year across R2, R1, and EDVs? I think in the past you might have mentioned R1 and EDVs relatively flat, so the delta should be the R2, but I guess with the R2, the $45,000 price range, right, that's on track for next year. Just curious if you can maybe remind us how we should think about unit mix for the rest of this year. Thank you.

Sure. As you reiterated, as you think about the composition of the 62,000 to 67,000 deliveries, we anticipate R1 combined with the commercial bands to be roughly flat relative to our 2025 delivery results, and then the remainder being comprised of the introduction and ramp of R2. which, as implied by the 9,000 to 11,000 of Q2 deliveries, suggests more of a back half-weighted ramp associated with R2, which is implied within our outlook and guidance.

Wonderful. Thank you so much, and congrats again. We'll pass it on.

Thank you. Our next question is from Edison Yu from Deutsche Bank. Please unmute your line and ask your question.

Hey, thanks for taking our questions. Wanted to come back on RoboTaxi. Are there any sort of KPIs that you're sort of tracking or that you need to hit for some of the milestones with Uber? And I think in the past, you know, the industry has kind of turned to disengagements or miles between intervention. Any flavor on that would be great.

Beyond the path to deploying in 2028, there are a number of milestones and some of those tie to the investment unlocks with Uber. The first of those is later this year, we'll be deploying vehicles in both San Francisco and Miami with a safety driver. So the vehicles will be running, but with the benefit of a safety driver in the vehicle with them. And there's a handful of additional milestones ramping up to ultimately having the vehicles operate fully on their own as part of a service in 2028. But as we get closer and closer to that date, there will be lots of proof points, if you will, of the progress that's being made that will manifest on the road. You'll actually see them not only being tested, but you'll see them as part of some of these deployed fleets.

Understood. And just a kind of separate question on more autonomy, more broadly, I think there was some reports that you guys were looking to potentially license some tech to other OEMs. Just wondering, anything you can say about that? Is that something that we could potentially expect this year? Anything would be great. Thanks.

I think there's two broad categories of technology we think that, as I referenced earlier, that will be very, very important for growing or maintaining market share in the next several years. And so the first of those is shifting away from a domain-based network architecture where you have a very large number of supplier-sourced ECUs Think of them as little islands of code on little small computers where you might have, depending on the car, anywhere from 50 to 150 of those little ECUs, those little computers that are in aggregate providing the software for the vehicle. But that architecture is incredibly hard to do updates on. It's very, very difficult to do cross-platform or cross-domain integrations. It makes the idea of integrating in a deep way AI into the vehicle and vehicle experience difficult. very difficult, borderline impossible to do it well. And so our view is every vehicle on the road will need to shift to a much more centralized compute where you have more of a zonal architecture. So essentially think of it as a large consolidation of all those little computers into a single or a very small number of large computers that runs a common operating system and for which the code base that's running on the vehicle can be very easily updated without coordinating among, you know, among, let's say, 50 to 150 suppliers. And so that architecture I just described is, of course, what's in a Rivian vehicle today. It's also the basis of our relationship that we've forged with Volkswagen Group to deploy that technology. And the first application of that technology being deployed outside of Rivian as part of our partnership with Volkswagen Group is going to be in the ID.1, which is a It's an EV that will be launched in Europe with a price point of just over $20,000. And I can't wait for people to buy this car. I'm sure lots of people will buy it and take it apart and tear it down. And I'm certain they'll be blown away with the elegance of how we've executed this. the network architecture and the compute stack topology. And so that's one technology category or one area that we think has a lot of opportunity to be deployed in other manufacturers. And of course, the proof point that we're successfully deploying this into a very large established manufacturer within Volkswagen Group across multiple brands, across multiple price points, different form factors, different geographies. is the proof point or the existence proof that the technology is scalable and that we're capable of supporting these types of complex deployments. With that said, the other large category of technology that we see opportunities to have licensing deals is in the autonomy realm. And here it's in a similar way. It's not just Hardware and Sanchez software, it's the two of them together. So it's the combination of our compute platform that we've developed, this RAP1 in-house inference platform I talked about, and the associated computing platform we've designed around that. along with our perception platform, so it's the cameras, radar, LIDAR that exist. And then very importantly, the large driving model, this foundation model, this neural net that we've created that defines what driving or how to drive a vehicle. And that's, as hopefully I made it clear before, is a much more flexible architecture to deploy into different vehicle embodiments. And so we're doing that already within Rivian. We'll be deploying that across R1T, R1S, R2, ultimately our commercial vans, robo taxi applications. But we do see this as a very scalable technology that can be deployed in many ways. Thank you.

Thank you. Our next question comes from Alex Perry from Bank of America. Please unmute your line and ask your question.

Hi, thanks for taking my question here. Just one, I guess a little bit further on the robo taxi strategy. So you had the Uber deal announcement. I guess it's a plan to pursue a partnership model for now. Is it does the deal with Uber have sort of any exclusivity? And how else will you sort of look to tap into this important market?

You know, when you think about the robot taxi space as a business, and so putting aside the technology for a moment, and I should say, and putting aside and recognizing that the technology for level 4 in a robot taxi or in a personally owned vehicle is the same, meaning a personally owned level 4 vehicle. Can't drive or should not drive worse than a robo taxi level for a vehicle. They're both very capable of managing the same levels of complexity in the same types of driving situations. So it's the same tech stack. But when you think of it through the lens of a business model, the benefit of working to deploy this first with Uber is you have very large density of choice. And so if you're deploying entirely on your own, you have to build enough vehicles to have in the fleet or in the car park such that if you're a user, when you say I want to have a vehicle available, it's immediately available or it's available in a matter of minutes. And so the scale of Uber's platform and the success they've had in creating a really healthy marketplace really makes them an ideal partner for us as we think about launching this technology in an R2 to deploy into providing robo taxi services. And as you've heard me say a couple of times, and we've talked about this in the past, that technology is going to also underpin a consumer personally owned variant as well. And I think we have to recognize that there's going to be lots of innovation around business model that start to emerge as we have level four. And so if you think of it in a very simple sense, the two bookends in terms of business model are pure ownership or the vehicles dedicated entirely to your household. And the other end of the spectrum is purely mobility as a service where you don't own the vehicle. You're not using the same vehicle every time, but you ask for a vehicle. on a purely variable basis and it shows up. There will be things that emerge in the middle and not to be exhaustive here in the types of things, but you can imagine different forms of sharing vehicles amongst families or within neighborhoods or within apartment buildings. But there's going to be a very exciting time of innovation in terms of how we think about consuming mobility or consuming transportation. And with all that said, just recognizing the trains of miles that are driven today, the vast majority of those are driven in personally owned vehicles. And so RoboTaxi represents a portion of those, but we think there will be lots of new models that start to make up the topology of those trains of miles that are driven.

Perfect. That's incredibly helpful. Best of luck going forward.

Thank you. Our final question comes from James Picchiarillo from BNP Paribas. Please unmute your line and ask your question. James, to unmute your line, please press star six.

Hi, can you hear me? Yes, we can hear you. Sorry about that. Great. So I want to ask about the Uber partnership. Can you share any color on the milestones that are associated with the four tranches of funding, right, regarding the $950 million in additional additive liquidity? And it does appear right that one of the tranches is already expected to hit this year, $250 million.

Yes, as RJ had just mentioned, there are a handful of milestones and the milestone that we more specifically expect to be in position to unlock the initial 250 million this year will be the operation of some Rivian vehicles in the San Francisco and Miami with safety drivers later this year. And then as you think about the subsequent years, you can think about the ongoing trajectory towards full deployment in a couple of cities in 2028 and then 25 cities by 2031 that would fully unlock the remaining $700 million of capital from Uber.

Excellent. That's great, Kelly. Thank you. And then just to maybe level set expectations on automotive gross margins for the second and third quarters, this quarter was yet again another strong showcasing of the company's momentum toward positive auto gross profit, right? And this is the last quarter before the I-2. Is there anything you can share for these next two quarters regarding the temporary order of magnitude impact we can expect auto profitability?

Sure. As we think about the subsequent quarters of Q2 and Q3, we'll see the introduction and turn on of both all of the depreciation expense, the new manufacturing team that is established that will be producing the vehicles. But as they're in the process of ramping up the first shift of operation, we'll see some of the complexity associated with lower volumes on the new R2 line. And so as a result of those attributes, we do anticipate seeing an impact to our automotive growth profit over Q2 and Q3 before we start to see the overall benefits of the ramp, not just on the R2's unit economic profile, but also importantly, the fixed cost leverage that we'll see across the R1 program and edb program overall so in total we still anticipate uh that we'll exit 2026 with a trajectory of a positive automotive gross profit um with that being you know both r2 as well as total ribian automotive gross profit being positive which is important for us as we go into 27 and and really fully ramp up at the r2 capacity and normal

Perfect. Thank you.

Thank you. This concludes the Q&A section of the call. I would now like to turn the call back to RJ Scurringe for closing remarks.

Thanks, everybody, for joining us today. Hopefully you can tell we're really looking forward to getting R2s into customer hands. We're very pleased and excited with the product that we've developed and proud of the team for all the Great work that went into creating such a special vehicle. Along with that, we are very much focused on the development of our autonomy platform. And with that, we'll be starting to see some of the fruit of that significant effort, as I said, first with our point-to-point capabilities later this year, and then adding more functionality, more capabilities over the course of 2027 and 2028. And again, thank you, February, for joining this call. We're excited for all of you to hopefully experience an R2 and see them on the roads here very soon.

This concludes today's call. Thank you for joining us.