Rivien (RIVN) has revealed its updated R1 pickup and SUV, with improved features and new drivetrains aimed at making its electric vehicles cheaper to build.
The R1T pickup and R1S SUV retain their distinctive exterior design. Most changes are made under the hood as well as with software. The most significant changes concern its electric propulsion units; the Rivian-built dual motor remains the base configuration, but now the electric vehicle maker also offers its own motors for a new three-motor configuration as well as the top-of-the-line quad-motor drivetrain.
The electric drive units for the previous quad-motor configuration came from German supplier Bosch; the motors for this and the new three-motor configuration will now be built by Rivian. The company says the quad-motor R1T now offers 1,025 horsepower and a 0-60 mph time of 2.5 seconds. The previous version equipped with Bosch motors had an output of 835 hp and could reach 0 to 60 mph in 3 seconds.
“We continue to evolve our flagship R1 vehicles, delivering quality and performance without compromise. Our revamped R1S and R1T push technical boundaries even further, creating our most capable products to date,” said RJ Scaringe, CEO of Rivian , in a press release.
Rivian also said its large and maximum batteries feature redesigned modules and new “more efficient” packaging, which the company says makes them easier to manufacture and maintain and offers up to 420 miles of autonomy, an increase of 10 miles.
Rivian also offers new battery chemistry with a cheaper standard lithium iron phosphate (LFP) battery, with an EPA-estimated range of 270 miles. Rivian also offers a heat pump, which aims to cool and heat the vehicle more efficiently.
On the software and autonomy side, the company now offers an improved autonomous driving system with 11 cameras, five radar sensors and “AI prediction technology”. Rivian said the system’s computing module is 10 times more powerful than before.
The company is also reducing the number of control units, removing 1.6 miles of cabling.
Rivian said the entry-level dual-motor R1T will start at $69,900 and the R1S will start at $75,900. The three-motor maximum battery configurations will cost $99,900 and $105,900, respectively, with pricing for four motors expected later.
The importance of R1 improvements (and cost savings)
Nearly three years after delivering its first R1T pickup, the time had come for Rivian to conduct a mid-cycle refresh of its sole product, typically done every three to four years in the automotive world.
The changes in performance and feature set will likely be welcomed by Rivian customers; However, most important to the company is the improvement in cost and bill of materials for building these vehicles. Rivian closed its Normal, Illinois, factory for four weeks to improve its processes and build the architecture needed to manufacture the new R1 vehicles.
During his first quarter earnings reportRivian reaffirmed its adjusted EBITDA loss forecast of $2.7 billion for 2024, but now sees its capital expenditures improve to $1.2 billion from $1.75 billion previously.
The company also said at the time that with its upgrade and other improvements, Rivian remained “confident in its path to achieving modest gross profit in the fourth quarter of this year.”
However, speaking at last week’s Bernstein Lecture, CEO RJ Scaringe warned that second-quarter results would be “complicated” as the factory closure would impact second-quarter profits and deliveries. But new contracts with suppliers and production improvements at the factory will reduce Rivian’s bill of materials through 2025.
Currently, Rivian’s loss per vehicle stands at $38,784 through the first quarter, meaning that achieving variable gross profit or positive gross profit would be a welcome improvement for the company.
Given the cash consumption of the companyWall Street is focused on any cost improvements as the company looks to transition to its next product, releasing the smaller R2 vehicle in 2026.
“Even if Rivian succeeds in turning R1 economics positive, it will still need to make significant additional progress to reduce its bill of materials and cost structure by its first R2 deliveries in 1H26,” wrote analyst Emmanuel Rosner at Deutsche Bank, shortly after Rivian’s announcement. Publication of first quarter results in May. Rosner currently has a Hold rating and a $10 price target on the stock.
Rivian CFO Claire McDonough will likely give more updates on cost structure and gross profit guidance at next week’s Deutsche Bank Autos conference in New York on June 11-12, 2024.
Pras Subramanian is a journalist for Yahoo Finance. You can follow it Twitter and on Instagram.
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