Rivian stock falls on $1.4B loss reported in mixed earnings

Shares of Rivian (RIVN) are falling after reporting mixed second quarter results. Akiko Fujita joins Wealth! to break down the EV maker's earnings and analyze its overall outlook.

Rivian posted a net loss of $1.4 billion in its second quarter despite having higher vehicle sales; the loss amounts to between $32,000 and $32,700 per vehicle. The auto company also recently formed a joint venture with Volkswagen (VWAGY) to integrate Rivian's technology across its portfolio of vehicles.

Rivian CEO RJ Scaringe claimed the partnership also allows Rivian to achieve more favorable pricing for suppliers. Despite challenges, Rivian is seeking cost-cutting measures and claims it is on the path to profitability. The company expects to see positive gross profits in its fourth quarter.

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This post was written by Melanie Riehl

Video Transcript

Well, Ev Maker Rivian has been having a tough day on Wall Street.

The stock right now for shares of Rivn are lower by about 3.5 3.6% after reporting mixed results in its second quarter.

A lot of the focus for Rivian on cost cutting to help drive profits here.

So what does this mean for consumers and investors?

Let's bring in Yahoo Finance's own, Akiko Fujita, he's been tracking.

She has been tracking this all morning long.

Thanks so much Akiko.

What do we know?

Yeah, Brad, we heard a lot of talk about cost efficiency on that earnings call Tuesday and that's largely because of the headline number we saw in the EV makers most recent quarter, the company posted a net loss of $1.4 billion even with higher vehicle sales.

That number was 21% higher than the $1.2 billion loss.

The company posted in the same period last year.

All of this points to the challenges EV upstarts are facing on the one hand trying to scale their operations to bring costs down and make their vehicles more affordable.

On the other hand, they're trying to balance moderating demand for EVs because of the high cost to buy them.

So moving forward here, Rivian that amounts to a loss of $32,000 and $32,700 per vehicle.

That number ticked higher compared to the same period last year.

The company has been retooling its production line to vertically integrate its operations to improve cost efficiency.

It's also recently formed a joint venture with the Volkswagen Group to integrate Vivian's technology across the company's portfolio of cars.

RG Scaring is the CEO saying on the call Tuesday, that partnership would allow Rivian to achieve more favorable pricing for suppliers.

In his words, Rivian is certainly not the only EV maker though burning through cash carmakers are losing roughly $6000 on every EV they sell for $50,000.

That's according to a study published by Boston Consulting Group earlier this year, BC G says companies can make up for half of that cost gap by controlling their own costs.

So we're talking about more efficient use of technology, high density batteries, more efficient electric motors and better battery management software.

They also need to offer vehicles that meet customer demand.

What exactly customers are looking for?

According to BC G, it's an EV that can charge in 20 minutes, has a 350 mile driving range and a price tag of $50,000.

The firm says there's only one car out there that does that right now.

And that's the Hyundai Ionic Six that meets the criteria that customers are looking for.

Rivian says their own cost cutting me won't be reflected until this current quarter, the third quarter, even with all of the challenges of the company says it is on the path to profitability.

The company now says it expects to be gross profit positive in Q four of this year.

Thanks so much.

Continuing to track all things rivian, especially in this hot landscape.

Appreciate it.