all right we're live just waiting for it to fire up here how's everyone doing this afternoon this will be a fun test good to have you here man should probably figure out what that means that's right i'm doing very nice yeah i follow now so i kind of figure we'll uh we'll listen to this i won't say a whole lot while the actual call is going and then afterwards we can go through some of the stuff together the shareholder letter is already out so if you're curious about that it is live here i should probably put this in the chat i put this in the chat i really appreciate you guys being here spur of the moment i'm not sure i'll do this every time or anything like that but um i'm gonna be listening anyway for the newsletter every week might as well listen to all of you guys looking forward to it i'd love to do some more live stuff with you guys in general if there was a good fit for something specifically but i guess my shtick is kind of the consolidated review videos. Good fit for something specifically, but I guess my shtick is kind of the consolidated review videos. So I see a question about being a shareholder. Full transparency, I do have some shares, but I have not bought in in a long time and I got them a while back and just kind of led the ride. It's not a lot of shares compared to my overall portfolio i bought them when i was excited about the uh the original rivian and did not buy the ipo thank god but uh i am upside down in a little bit but that's fine not a huge portion of my portfolio what do you guys anyone here have rivian shares excuse me if you're dialing into the live stream you either have shares or you really really want to know how soon you can get that r2

Good afternoon, and thank you for joining us for Rivian's fourth quarter and full year 2025 earnings call. Today, I'm joined by RJ Skaring, our CEO and founder, Claire McDonough, our chief financial officer, and Javier Varela, our chief operations officer. Good afternoon. 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 shareholder letter we filed with the SEC. During this call, we will discuss both gap and non-gap financial measures. A reconciliation of historical non-gap to gap financial measures is provided in our shareholder letter. Just before the earnings call, we published and filed 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 will cover on today's call. Following our prepared remarks, we will be taking questions from sell-side analysts. In the interest of keeping the 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 RJ.

Thanks, Jip. Good afternoon, everyone, and thanks for joining us for today's call. 2025 was a year focused on execution at Rivian as we laid the foundations for scaling our business. Our team progressed the development of our technology roadmap in R2 while simultaneously driving continued improvement in our customer experience and our path to profitability. In founding Rivian, I wanted to demonstrate how a clean sheet, technology-focused vehicle could eliminate long accepted compromises and provide consumers choice. Our goal with the launch of our R1 products was to establish the Rivian brand by delivering a combination of efficiency, on-road performance, off-road capability, functional utility, and product refinement that simply didn't exist in the market. The first vehicles established Rivian as a brand that enables people to do the things they love, enable adventure, as well as transcend different segments, form factors, use cases, and geographies. In the fourth quarter of 2025, the R1S was the best-selling premium electric vehicle priced above $70,000 in California, New York, New Jersey, Oregon, Virginia, and Washington, D.C., and it was the best-selling SUV, EV or non-EV, over $70,000 in the state of California. Now I'm excited that we are months away from starting customer deliveries of R2, our first mass-market vehicle. One of the things that's often overlooked around EVs is that there is a surprising lack of high-quality choices. At prices around or below $50,000 for a new vehicle in the United States, there are only a few compelling EV choices as compared to hundreds of internal combustion or hybrid options that have a wide range of form factors and design aesthetics. From the lens of the customer, if you want to buy a mid-size SUV with robust technology, autonomous capabilities, and a reasonable price point, You've really only got one choice, and it's been that way for a long time. This is a reflection of a market that's being underserved. We believe R2 is going to change that. R2 is an extension of the experience we delivered in R1 with design elements and performance to inspire adventure, but in a smaller form factor and importantly, at an attractive lower price point. Launch Edition R2 variants will be well equipped with a dual motor all-wheel drive setup that provides more than 650 horsepower and over 300 miles of range. In mid-January, I was thrilled to drive our first R2 manufacturing validation build off the production line in our factory in Illinois. As you've seen from the extremely positive media reviews of our pre-production vehicles over the last few days, R2 is an exceptional vehicle and I believe will be a game changer for our customers, our company, and the industry. One reviewer said, the R2 is an exceptional vehicle, quite possibly the best all-around electric vehicle I've ever driven. We look forward to getting investors and more media in R2 for demo drives so they can experience the capabilities of the vehicle. We plan to provide additional product, pricing, and lineup details on March 12th. Turning to our AI and Autonomy Day, it was great to see so many of our stakeholders at our offices in Palo Alto this past December. We were excited to showcase our innovation across our vertically integrated hardware, software, and autonomy teams, and unveil RAP1. Developing our own chip was driven by the need for velocity, performance, and cost efficiency and is a key development of our autonomy platform. Near the end of last year, we released Universal Hands-Free, which expanded our advanced assisted driving capabilities for Gen 2 customers to more than 3.5 million miles of roads across North America. Since its release, customer utilization of our autonomy features has doubled. Rivian is also making significant progress in making software and AI core to everything we do. from the way we design, develop, manufacture, and service our cars, to the way our customers interact with their vehicle. This is enabled by the Rivian Unified Intelligence, a common AI foundation that understands our products and operations as one continuous system and personalizes the experience for our customers. It also defines how applications will integrate in our vehicles in the future. We were excited to demo the Rivian Assistant at AI and Autonomy Day and expect to launch this feature early this year. Finally, we continue to see the extensibility of our electrical hardware and software platform with the work happening in our joint venture with Volkswagen Group. I'm very pleased that we have delivered vehicles for winter testing for multiple Volkswagen Group brands 13 months after the formation of the joint venture. in closing 2025 was a foundational year for scaling rivian and i could not be more excited for the year ahead i believe 2026 will be an inflection point for our business as an american automotive technology company that develops and manufactures incredible electric vehicles we believe that the future of the automotive industry will be fully electric autonomous and ai defined i've never been more confident in the opportunity ahead for rivian than i am today I firmly believe Rivian's technology, along with our direct-to-customer ownership experience, position our company to build a category-defining brand with a strong mass-market product portfolio for the U.S. and global markets. With that, I'll pass the call over to Claire to discuss our financial results.

Thanks, RJ, and good afternoon, everyone. As RJ discussed, we believe 2026 will be an important year as we scale our business. Launching R2 will extend our brand to the mass market, and we expect R2 will drive meaningful automotive segment growth and profitability over time. Now, before I dive into the quarter, there are a few key financial metrics that I'd like to highlight for 2025. First, on a full year-over-year basis, we delivered nearly $5,500 of improvement in average sales price due to the introduction of our second-generation R1 quad models, a higher mix of R1 units and increased base prices for the 2026 model year. Second, on a full year over year basis, we achieved an approximately $9,500 improvement in automotive cost of goods sold per unit due to material cost reductions and operational efficiencies. Finally, the improvement in unit economics in our automotive segment, when combined with our strong software and services performance resulted in greater than 1.3 billion dollars of improvement in full year gross profit making 2025 our full first full year of positive gross profit additionally our gross profit performance coupled with our focus on cost management enabled our adjusted EBITDA for 2025 to be at the favorable end of our guidance all of these metrics represent our continued progress in the operational efficiency and profitability of our business with such a strong foundation for 2026 and beyond. We expect the gross profit per unit for R1 and the commercial vans to be further enhanced as we ramp up production and deliveries of R2, coupled with the gross profit contribution of R2 over time. Turning to the results of the fourth quarter, our consolidated revenues were approximately $1.3 billion. Consolidated gross profit was $120 million, and our gross profit margin was 9%. Gross profit included $108 million of depreciation and $26 million of stock-based compensation expense. Adjusted EBITDA losses for the fourth quarter were negative $465 million, dollars, a $137 million improvement from Q3 2025 due to higher gross profit and lower operating expenses. Now, looking at our automotive segment, during the fourth quarter, we produced 10,974 vehicles and delivered 9,745 vehicles from our manufacturing facility in Normal, Illinois. This was the primary driver of the $839 million of automotive revenue. Automotive gross profit for the fourth quarter was negative $59 million, a $71 million improvement from Q3 2025 due to a higher mix of commercial vans, which resulted in the lowest cost of goods sold per unit in our history. Our software and services segment reported another strong quarter with $447 million of revenue and $179 million of gross profit. 273 million or approximately 60% of software and services revenue was attributable to our joint venture with Volkswagen Group. We also experienced strong growth from our marketing and vehicle repair and maintenance. Looking at our balance sheet, we ended the year with approximately $6.1 billion of cash, cash equivalents, and short-term investments. In 2026, we expect to receive an additional $2 billion of capital as part of our joint venture with the Volkswagen Group. $1 billion is an investment subject to the successful completion of winter testing, which RJ discussed earlier, and $1 billion is non-recourse debt, which we expect to receive in October. Finally, for our 2026 guidance, we expect to deliver between 62,000 and 67,000 total vehicles across R1, R2, and our commercial vans. We expect total deliveries of approximately 9,000 to 11,000 per quarter in the first half of 2026. We plan to start production of the R2 launch variant with a single shift and expect to add a second shift towards the end of the year. While we believe our gross profit will increase year over year, we expect the complexity of a new vehicle launch to negatively impact our automotive gross profit in the second and third quarters before becoming a benefit to 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 segments profitability. Delivering a strong exit rate for R2 production and deliveries will be a key focus for our team. For 2026, we expect an adjusted EBITDA loss of between 2.1 and 1.8 billion dollars. Our adjusted EBITDA guidance also includes a step up in R&D spend as we accelerate investments in our autonomy roadmap and look to deliver LiDAR, our first to RAP1 chips, and limited point-to-point functionality for our customers by the end of the year. We believe autonomy will be a key fundamental long-term differentiator for our business. We also plan on the continued growth of our SG&A, driven by the expansion of our service and sales footprint as we scale with R2. Finally, for 2026, we expect capital expenditures of $1.95 to 2.05 billion related to finalizing construction and tooling for R2 and Normal, kicking off vertical construction for our Greenfield plant in Georgia, and the continued build-out of our sales, service, and charging infrastructure. In closing, thank you again to the team for delivering a great 2025. As we look forward to 2026, we remain steadfast in our belief that R2 and our technology roadmap will be truly transformative for our growth and profitability. I'd like to turn the call back over to the operator to open the line for Q&A.

Well, the Q&A section of today's session will be utilizing the raise hand feature. If you would like to ask a question, click on the raise hand button at the bottom of the 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 emmanuel rosner with wolf research please unmute your line and ask your question great thank you so much um my first question is on the cadence that claire you just um highlighted with the nine to eleven thousand units per quarter in the first half and then obviously 62 to 67 on a full year basis is that um 10 000 per quarter or so um is that your

expectation for r1 plus edv for this year in 2026 and then the upside in the second half would be essentially delivering the um the r2s thanks emmanuel as you think about the the cadence um as rj articulated in his prepared remarks i would expect first deliveries to begin for r2 in the second quarter it would like any ramp the number of deliveries will be rather small as you think about the impact of our contribution to the nine to 11,000 units per quarter that we anticipate in the first half of the year. And then as we get into the second half of the year, we expect to see the continuation of the ramp of R2 coupled with ongoing delivery of our commercial van as well as R1. So a full year basis, you can think about the R1 coupled with the commercial van being roughly in line with our 2025 at total variance.

And then another one on the cadence side, but more from a financial point of view, I think in the past you had targeted, I think by the fourth quarter of this year, some level of profitability on R2 to sort of like demonstrate essentially the potential. Is that still the expectation for this year?

Yes. as i mentioned we expect you know 2026 will be a transformational year for our automotive growth profit and we expect that with r2 sounds like they're having audio issues on their end while their audio is broken here's a hot take i actually think that they're uh more likely to kill the dual

standard r1s and r1t once the uh or at least the dual standard r1s once the r2 is in full production and widely available. Yeah, it's a good question about who's going to wait for LiDAR in Gen 3. I think pretty much everyone should wait, but if you get a chance and you're excited about it and you really don't care about autonomy, you don't care about trading values as much because you're going to keep it a long time, go for it. I suspect they may call them 2026 models that have the sort of Gen 2.5. Call it 2027 models when it's Gen 3 and LiDAR and all that good stuff.

Ladies and gentlemen, thank you for your patience. We will now resume the Q&A. Our next question comes from Dan Livy with Barclays. Please unmute your line and ask your question.

Hi, good evening. Thank you for taking the questions. First, I wanted to start with just a question on the R2 volume assumptions, which you just talked about a moment ago. as you're going into uh the the launch do you have a feel for what the aggregate demand is and maybe you could just talk to the uh the question of your confidence on people wanting to take delivery of r2 before the new adas platform or hardware is put into the vehicle how much uh of a deterrent the lack of that new hardware will be on on uh deliveries Hi, Dan.

Thanks for the question. With CardStar 2, I've had the chance to spend a lot of time in it over the last several months and really over the last month or so driving our validation vehicles that are produced in our plan off of our manufacturing validation building. The vehicle is just absolutely incredible. It's the combination of features, the packaging, the vehicle dynamics, the steering feel, we're incredibly bullish on it. As I've talked about a lot in the past, we ultimately think the market is really hungry for some choice in this segment. As I said in my opening remarks, just the lack of choice that exists in and around this $50,000 price point has led to very high market share concentration of one vehicle. And so this is the first time there's going to be a real alternative. This is important for folks that are in internal combustion vehicles today and mid-sized suvs and looking for something that fits their form factor needs their aesthetic needs their packaging needs and so we're uh we're very very focused on uh putting this together and with that said we have a lot of confidence in the overall development of course that's why we lean so much into the program and lean so much into what we're about to launch correct and and just the the the the issue of the adas platform people taking it before the new hardware comes in yeah with with new technology there's always you know especially for us as a business uh given that we've got an enormous focus on developing new technology there's always something new coming and recognizing that there are a lot of customers that are just waiting to get a great mid-sized sd and so given the enormous backlog of demand we have as well the the short period that we have where we'll be launching with essentially an upgraded version of our gen two economy stack before our gen three economies that comes we don't think that that's going to be a significant issue and for those that want to wait for it they certainly can and for others that are going to be um you know excited vehicles in a shorter time frame uh you know be available uh prior to that okay great thank you as as a follow-up i wanted to ask about partnership or licensing deals with other automakers.

And maybe you could just give us a sense of the tone or tenor of discussions on licensing the network architecture to others. And you said at your autonomy day that one of the opportunities on your in-house processor was not only that it could be used for your vehicles, but you could also sell this to others. It's a better, what you said bang per buck so i know it's early days that still isn't out and the initial you know units of that process are going to need to be for you but what types of discussions are you having with automakers on potentially selling that or licensing that to them so as i said in opening remarks we've had uh in the first 13 months of establishing the joint venture with volkswagen and we've started intertesting on multiple VW group products.

And I think the true demonstration and existence proof, if you will, of the scalability of our technology in terms of being able to work across multiple form factors, different price points, different brands, and importantly, be productized into a platform that can go across a large existing OEM, this multifaceted relationship is really important for that. And so that's our focus. But of course, we have relationships with a broad spectrum of manufacturers. And I've said this in the past, but I deeply believe that over the course of the next several years, every manufacturer has to make the decision as to whether or not to get to a self-portified vehicle, whether or not they're going to develop it themselves secure it from a third party source of which will be the only demonstrated example of having scaled this technology outside of our own products or accept that without the technology you will lose market share and so we're quite bullish on the potential for this technology platform and we see it as really an important part of our portfolio going forward great thank you ladies and gentlemen we are having further technical issues please stand by and we will

resume your q a as soon as possible thank you wonder if they're trying to hardwire or something someone's sitting there on wi-fi on a laptop i'm hardwired hardwired on gig fiber here for you guys so it's not me i think it would be a cool way for them to thank some of their early customers and give everyone who buys this gen 2.5 version of r2 just give them autonomy plus But I highly doubt that's happening. At best, it might be in the ones that are actually badged as launch edition. But I think they'll quickly rotate out of launch edition and have a version where they want to sell autonomy plus. Yeah, I always got a hardwire for the big ones. I think there's a fair amount of nerds in my audience. So definitely some IT people that understand. i don't think the osborne thing is too much of an issue here because uh there's just so much demand for r2 this thing's gonna sell so well even as is even with gen 2.5 it's gonna have the better cameras it's gonna have the upgraded corner radars it's gonna have you know the gen 2 autonomy computer is quite capable just gen 3 is gonna be way more capable so it's about the ceiling i mean it depends on how long you plan to keep the vehicle too i guess plan to keep it a long time, that Gen 2 is going to feel like buying hardware 3 from Tesla. If you're only going to keep it two or three years, I'm not sure you're going to see that big of a performance difference between Gen 2 and Gen 3 over the life that you actually have the vehicle. See if they can't get their life together over there, huh? You know, if you look at like the AAA survey, something like 84% of people have zero interest in autonomy right now. I think the big deal is when it can actually do something useful where the automaker takes legal liability that's the big shift we haven't seen that's only going to be possible though in my opinion at best with lidar and gen three i think once that rolls out and once that's ubiquitous demand for autonomous based stuff for cars is going to go up a lot especially for freeway travel and that kind of stuff even if it can do a great job around town i think most people still like to be in control and low speed environments and then uh you know they want to be able to basically get on the freeway and watch netflix or something until they get to their off ramp such that they said that there's going to be limited point to point by the end of the year i wonder what limited means to them i'd have to think for safety one of the first things they're going to want to do is do stop sign and stoplight control because this is wild man imagine being a multi-billion dollar organization not being able to do a webinar for an audio an audio broadcast that's wild you know i think the bigger thing to me that's going to be important on those early r2s that i think even the very first versions will have is actually the upgraded infotainment computer because we're going to have more more ai inference compute available uh you know available in car which means you're be able to do a lot more of those rivian assistant tasks on device without waiting for latency out to the out to the cloud and even though it'll have a 5g radio you know it's like when apple has done more and more of their uh you know basic siri requests on device it's a way better experience but hey at least you guys have me to entertain you for a few minutes while we wait on these these guys to get their audio working again ladies and gentlemen thank you for your patience we will now continue with the q a our next question comes from ben callow with baird please unmute your line and ask your question hey thank you guys very much um congrats on all the

progress so far um maybe first uh can we talk about just the vw relationship and uh you know there was the uptick in revenue from that and just if you give us a sense of you know how that progresses and you know the uh potential to expand the relationship or how we should think about it growing um and then the second uh question is just around um around georgia uh the doe uh loan guarantee how you're looking at that maybe just liquidity in general as as you start working on that thank you thanks ben and uh i spoke a little bit about this in the previous response but

understand we've had a few technical difficulties here so uh at risk of repeating myself i'll just say, cover a few things that I said earlier. The Volkswagen relationship continues to progress. We're now 13 months since the joint venture started. With that, we've started winter testing on several different Volkswagen Group products. And of course, we're working towards the first launch of those vehicles in 2027. And the relationship has been very, very strong. We And certainly last week with with a broad set of the Volkswagen Group leadership team and seeing this be used and deployed across not just vehicles of similar price point to Rivian's vehicles, but across across the price point, across a wide band of price points and across a range of form factors is really important. And it really demonstrates the scalability of the technology. And so ultimately, you know, we're going to continue working towards delivering multiple Volkswagen Group products. But this does, of course, open the door for opportunity with other manufacturers as well.

And then to put some of the financials behind the software and services outlook as a whole, we anticipate seeing that we'll approach about 60% year over year growth in our software and services business. And it will be a significant driver of our gross profit outlook as well with margins that we expect to be in the mid 30% area as a whole. Then as your second question, which was on the capital roadmap. As I mentioned in my prepared remarks, we ended 2025 with $6.1 billion of cash, cash equivalents, and short-term investments. We expect that we'll receive another $2 billion from Volkswagen Group throughout the course of 2026. There's still roughly another half a billion dollar payment associated with the original joint venture transaction as well that will happen we anticipate in 2027. And then as it pertains to our broader capital roadmap, we'll continue to remain opportunistic as well on that front. On the DOE loan question, similar to what we've shared in the past, we certainly share the president's desire to bring jobs back to the United States. We're excited to keep up our work on creating new American manufacturing jobs. We'll be adding approximately 2,000 new jobs at our normal Illinois plant for the ramp up of our two, an additional 7,500 jobs at our future Georgia plant as well. And similar to the comments RJ just made, Rivian's working to help drive innovation and technology leadership in the U.S. automotive industry for consumers, and also associated with our joint venture with Volkswagen Group, enabling this technology for the industry as a whole. Thank you.

Our next question comes from George Gineri. Can this with CG, please unmute your line and ask your question.

Good afternoon, everyone. Thank you for taking my question. As it relates to your guidance for vehicle sales this year, to the extent you see a strong conversion in your backlog for the R2, could you see upside to that, or are there certain production bottlenecks that you'll have to work through towards the end of the year? Thank you.

Thanks, George. The process of ramping a vehicle is something we've spent a lot of time talking about in this forum, but certainly internally, we're really putting a lot of effort on making sure we have a very smooth production launch and then associated ramp. And we often think of the plant as being the bottleneck for the ramp. But in fact, we have to remember there's hundreds of other companies that are providing components into Rivian that ultimately really contribute and are a key part of the ramp. And ramping our supply base is something that we're very focused on and planning around. And you can only ramp as fast is your your slowest part so to speak so with that said we've as you heard earlier we're starting with a single shift we're bringing on a second shift that'll be happening near the end of the year and then in 2027 we'll be adding our third shift and this has been very methodically laid out to make sure that we're ramping consistently and evenly across the supply chain and so it certainly and as you alluded to there's there's going to be a a large uh demand backlog that we're working through and a tremendous amount of excitement for the R2 vehicle. And as more reviews come out about it and more people get exposure to it, we expect that to continue to expand and grow. It's worth noting some of the pre-production reviews that came out last week, the feedback has been universally super positive.

And so we're acutely aware of that, but we are working very carefully to coordinate the ramp and coordinate the growth of output with our supply Thank you, and maybe as a follow-up, as you sort of crystallized your selling prices and your cost structure for the R2, can you just maybe speak to the guidance you gave your analyst day last year about reaching EBITDA positivity in 2027 and your long-term vision around having 25%-ish gross margins and high-teens EBITDA margins?

Thanks, George. As discussed in our prepared remarks, we believe that 2026 is going to be a transition year for the automotive first profit segment, and our north star for the normal plant is going to be getting our production and deliveries up to about 4,000 units per week. While there's a lot of execution required, as RJ just walked through from the team in order to achieve that outcome. If we're successful, we believe it would put the company in a strong position to achieve our adjusted EBITDA goals. And as we look at the broader outlook, we certainly see there being, you know, 20% gross profit target for automotive segment. As we think about the overall contribution of software and services, there's many outcomes or licensing but we've seen some of the financing deals that Rivian could do that could allow gross profit to be much higher than the 25% in our end state as well.

Thank you.

Our next question comes from Joseph's back with UBS. Please unmute your line and ask your question.

Thank you. Good afternoon everyone. Just a couple of questions. um Claire I know you said the second shift starts in the back half um it does does the guidance contemplate like uh exiting the year at a full two shift rate for the R2 just want to sort of understand how we should think about a jumping off point for for 27. sure as you can imagine Joe will be in the process of ramping up the second shift so as you think about the exit rate of 2026.

We won't yet be at full production across two shifts. We'll be getting there as we continue to progress all of our operational efficiencies and get the team ready to ramp up throughout the course of 2027.

Thank you. And then I guess RJ or Claire, just, you know, you mentioned more details on March 3rd. I'm assuming that's also when reservation holders will be invited to configure. But is there any update you could give us on that order book? And then on the pricing side, one of the things we've seen, again, not ribbing specific, just to the industry and the world really is the cost side between metals and memory. So curious to sort of wonder how you're thinking about that impacting either your pricing for the vehicle, or whether that's contemplated in the EBITDA guidance in the year.

Yes, on March 12th, we'll be providing the full picture around the overall portfolio of products that'll exist for R2. And that'll include the launch configuration, which, as I've said, is a dual motor performance variant with a premium trim. The different combinations of trim, power chain performance, and battery size are what we'll be describing in detail on the 12th. And then along with that, allowing customers to start configuring their vehicles and allows us to start getting ready to be making deliveries later in Q2. I think important here, as you think about the overall demand profile for the vehicle, we've put a lot of time into thinking about the different combinations and recognizing uh what different folks are going to want and and having the benefit of having lots of conversations and also the benefit of seeing you know what are the most popular trims and configurations in r1 and so we're we're really excited to go through that but but it's something that we do want to go through as a you know present it as the full meal as opposed to giving little bits and pieces so i've been talking about the launch configuration the rest of the configuration is going to be something we talk about in detail in about a month And then, Joe, our adjusted EBITDA guidance does contemplate some of the increases that we've seen in raw material costs and the current supply chain backdrop as well currently.

Thank you very much.

Our next question comes from Mark Delaney with Goldman Sachs. Please unmute your line and ask your question.

Yes. Good afternoon. Thank you very much for taking the question. I was hoping to speak more about automotive cogs. Maybe you can help us better understand what led to the reduction in cost per vehicle, both sequentially as well as year over year. And then as you look forward, Claire, you just alluded to some of the supply chain challenges around DRAV and other input costs that are embedded into your guidance. But where do you ultimately think the R2 cost can get to? And is the 50% reduction in the BOM cost compared to R1 still the right level to think about?

Sure. For Q4, we were able to deliver $92,000 of COGS per unit. And that was about a $4,000 per unit improvement relative to the third quarter. One of the key drivers was associated with the mix shift. So we had higher penetration of commercial vans in the fourth quarter relative to the third quarter. And then beyond that, the ongoing operational efficiencies that we continue to execute across our normal operations as well that also contributed to the reduction in our cogs per unit as we look at the full year over year improvement the biggest driver that we saw was associated with the reduction in our material cost that was both the transition for us to move fully to gen 2 vehicles we also in addition saw a significant step down in terms of a lot of our raw material cost and importantly a step down in the cost of our lithium prices that was another contributor for us as well as we looked over at the full year over year uh step down in terms of cogs per unit coupled with the ongoing operational efficiencies that we continued to progress throughout the course of the year as we look forward to r2 um one of the the key factors for us with R2 is the opportunity for us to have also over the course of the last year started to see some meaningful benefit from our joint venture, joint sourcing opportunities associated with our global digital electronics that we're sourcing for the R2 vehicle. And that's really been a key enabler for us to continue to progress the material cost trajectory of the R2 product as well. And then as we approach the Georgia plant, we'll have further opportunity to drive additional synergies or efficiencies as we start to source future vehicle volumes as well that will share the fundamentals of the midsize platform as a whole. So those are a couple of the puts and takes. The other call out that I would highlight as well is we do anticipate seeing a reduction in terms of our tariffs per unit and so we we didn't have the full benefit of the section 232 offsets for the entirety of the fourth quarter so we'll see further benefit from a tariff per unit standpoint as we progress forward um and r2 will also benefit from that in the future thanks for all that claire my other question was on edv and i understand probably flattish volumes there for 2026 based on your comments earlier on the call but you did speak to a plan for some additional variants and including one with with more range for amazon so maybe help

us better understand when to expect that new product for the commercial segment and what that might mean for van deliveries and the broader commercial opportunity going forward thank you we do expect uh some growth in our edv demand in 2026 and uh as you as you called out there's an all-wheel drive version of the van and a larger battery pack variant as well and both of those are to help unlock uh you know specific use cases within the amazon network we're working really closely with amazon in defining the requirements of those and excited to get those launched and the relationship with Amazon continues to be very positive and certainly the EDV continues to perform extremely well.

Our next question comes from Chris Pierce with Needham please unmute your line and ask your question.

Oh hey as you talk about adding the second shift then adding the third shift can you kind of just walk through setting up hiring for these workers in the normal area I'm just not sure if we should think about that as a barrier or a burden or just kind of is it already in or do you already have these and you kind of move people from one shift to another? Just kind of any detail around that, please.

Yeah, hello, Chris, thank you for your question. Hiring process is in place, is proceeding according to plan. We have enough candidates. At the beginning, it was even a spontaneous candidates that wanted to work for us. So we are good from that end. There's part of the team that will populate the R2 line that is coming from the existing flows but it's an important part as well that is hired from from outside we have reinforced our training programs we have even before hiring the people pre-hiring activity just to let them know what is working in the lines and and what they they should expect there and so far we are we are very happy with the response of the of the uh allen pool and the and the people pool that we have seen there so oh very satisfied perfect thank you and then just i guess i just kind of want to understand you've had the reviews this

week you're kind of flipping over the card as far as first trim and other trims in a month and then we could see initial deliveries sometime in the second quarter i guess i'm just kind of curious i'm just thinking about maybe apple and the iphone or the ipad and it's just sort of boom here it is you can buy it now i guess i'd just love to hear about why the spacing is there a psychological effect or it just comes down to what you can produce when you can produce it at the plant but just the timing of the cadence as you move towards the launch well thanks chris you know one of the uh amazing things about the r2 program is there's an enormous backlog um but that does create a challenge for us with making sure uh you know essentially how do we select who receives their vehicles first and having a process around that.

And so opening up the configuration process allows us to start taking this demand backlog and organizing around when we make deliveries and who gets their vehicles first. It's not as if you could press a button and instantly have thousands and thousands of vehicles available. So we start producing, we are ramping production, but the demand will outpace our ability to produce. And so that process allows us to organize in a thoughtful way and learning a lot from some of the past launches we've had, how do we prioritize and how do we sequence deliveries to our broad basic customers.

Our next question comes from Itay McKaylee with TD Cohen.

Please unmute your line and ask your question uh great thanks hi everybody wanted to actually ask on the uh the universal hands-free you know curious how uh initial feedback has been since december how we should think about feature improvements and ota updates this year and maybe what you're also assuming for paid subscriptions this year we we're really excited to talk about this this is a huge effort within the business uh and autonomy and ai day was of course focused on all the work that we're doing here but our universal hands-free is really think of it as the first step in a whole series of steps that expand the capability and so universal ends free you know expanded the number of miles where you can drive with hands off the wheel but eyes on the road uh it's around three and a half million miles essentially any any road with marked lanes and later this year we'll be uh uh unlocking the ability or enabling the ability for the vehicle to drive point to point. So you put your address into the vehicle and the vehicle navigates to that address. And then the next steps ultimately are driving towards what we think of as personal level four. But between point to point and personal level four, we'll have hands off, eyes off. So you'll be able to take your eyes off the road and do other things, starting first on the highway and then expanding from the highway. And then And following that, we'll have our first level four applications within a geofence area to start, but ultimately expanding over time. And our view and really strong conviction is that over the course of the remainder of this decade, we're going to see autonomy go from something that today with hands-off capabilities certainly is a nice feature to have. But as we start to move to hands-off and eyes-off and then ultimately to level four where the vehicle can operate itself entirely on its own, including driving empty, it really creates a whole new customer experience and we think it becomes a critical part of the purchase decision. And this is going to drive significant change in how we think about the business model. It's going to drive significant change in how consumers think about what vehicles they want to purchase.

Thank you, Roger. That's very helpful. As a quick follow-up on the financials, Claire, any sense of how you should think about working capital flows this year, particularly as you go through the initial R2 ramp?

Sure. We will see working capital be an outflow of cash for us over the course of 2026.

That in part is driven by the buildup of our inventory balance associated with the launch of R2. got it very helpful thank you our next question comes from andrew pacoco with morgan stanley please unmute your line and ask your question great thanks so much for for taking the question um i actually just want to come back rj to what you just said on autonomy really driving you know the value proposition and and driving experience over the next few years and and i guess i'm just curious like can you share your thoughts around whether or not there will be a retrofit opportunity

for existing you know or new r2 customers that don't have gen 3 with lidar and existing r1 customers um and any thoughts of when you'll introduce lidar onto onto r1 production we're not you know in terms of retrofit this isn't something that's contemplated or planned um certainly there'll continue to be over there updates for our gen 2 vehicles our r1 gen 2 vehicles and our launch r2 vehicles but uh in terms of hardware upgrades those are not planned the the hardware upgrades that we've talked about in the past we talked about our autonomy and ai day these are these are going to be on vehicles in the early part of 2027 and uh certainly very very excited about those but but the capabilities and even the demo that we had at our autonomy EI Day, which was a point-to-point demo. That's being done. That demo was on a Gen 2 of our R1 vehicles. So that will be available on any Gen 2 R1 vehicle, as well as the R2 vehicles we'll be launching with.

Got it. Okay. And can you get to, is the plan to get to eyes off point-to-point with Gen 2, or is that something that's going to require Gen 3?

I think the important thing to keep in mind on our upgraded architecture, which is, as I said, coming in 27, is that has a few really important purposes. One, of course, is it raises the ceiling on what's possible. So it grows the opportunity to add even more capability beyond point to point. But it also serves as an even more enhanced part of our data flywheel, where we have enhanced cameras, higher level of inference in vehicle but importantly we add a lidar as you referenced which is turns essentially every vehicle into part of our ground truth fleet which is really helpful for training our end-to-end model and so the way that the the model continues to improve is we're benefiting from the thousands and thousands of drivers and uh that are on the road and the vehicles that are on the road pulling interesting and unique events back off the vehicles and allowing us to feed that into the overall training loop that we have for the for what we call our large driving model got it okay

and just one quick clarification when you say gen 3 will be available early 2027 will that include r1 or is that just still r2 this is for r2 okay thank you appreciate it our next question comes from edison you with deutsche bank please unmute your line and ask your question hi this is winning on for Edison can you guys hear me yes hi yes thank you so much um my first question is on uh the relationship with vw as the matures um was wondering if the topic of how to best utilize vehicle data come up um and we're asking this new context of vw naturally having a much

larger fleet um and we're then being able to potentially benefit from getting access to that data for training um so just curious your thoughts on on that topic thanks the the the volkswagen fleet and what ultimately we're delivering to volkswagen from a technology platform doesn't include our autonomy platform so it's our it's our it's our embedded software platform our topology of ecu's including our zonal architecture but it doesn't include our self-driving architecture got it um and then maybe just on the the wrap one chip i'm curious to hear your maybe longer term

inspirations for that um is it something you think that will be limited to to rivian or do you do you envision maybe this being used by some of your partners or other oems um and whether it could be potentially applied to uh non-automotive products like human noise thanks great question his robotics yeah i guess i'll answer it really broadly this is um when we think about our self driving and autonomy efforts this is a enormous focus for the business and represents our most significant uh area of capital investment from an r d point of view and so when we look at this

through the lens of the next several years we do believe that as as we continue to demonstrate progress and work towards that growing capability set that I talked about before, ultimately culminating in level four, this is a platform that certainly beyond Rivian has applications. And so we do envision a world in which this becomes something that we can monetize through a few different ways. We can monetize it through increased market share and growing number of vehicle sales. We can, of course, do that through new and unique business models and new ways of thinking about consuming transportation, and we can do that through selling and providing the technology to other manufacturers. Now, specifically to our RAP1 processor, as well as its future variants of that processor, we do see applications for vision-based robotics well beyond the vehicle. Of course, the vehicle is a great near-term vision-based robot, but But even within Mind Robotics, which is a new company that we created, that is also an example of a great customer application, a great use case application for our AppOne processor.

That's our fault. Thank you.

Our next question comes from Tobias Beeth with Rothschild and Co. Redburn. Please unmute your line and ask your question.

Hi, thank you both for your time. May I ask what Rivian's management's latest thoughts are on captive battery cell manufacturing and assembly are considering the recent development in the price of lithium salts? I know that this activity was contemplated at one point at your forthcoming plant in Stanton Springs.

Well, thanks, Toby. We've found great working partnerships with our battery cell suppliers and have taken a very active role in securing and sourcing some of the upstream precursor materials. So you called out lithium. That's a really great example of an area that we, from a sourcing point of view, spend a lot of time on. But being able to work with these key battery partners and leverage the investments they've made in production capacity and in their own cell construction and cell design has been really helpful for us in terms of efficiently deploying capital. Thank you.

Our last question comes from James Piccarellio with BNP Paribas. Please unmute your line and ask your question.

Can you hear me?

Yes, James, we can hear you.

Can you hear me? Oh, great. Thanks. Just curious on your thoughts regarding R1's potential to see additional demand from one of your major competitors announcing the end of its two high-end models next quarter, right? We're talking about 20,000 annualized units essentially for grabs in the U.S. It just seems like the R1 can be a natural home for many of those buyers. Curious your thoughts. Thanks.

Yeah, the Tesla Model X and Model X, which, as you said, will stop production, at least what's been said, is next quarter. Yeah, the Model S was a really important product from an electrification point of view, and it was one of the first more at-scale products to show customers how exciting electrification can be. And so as that leaves the market along with the Model X, it does create an opportunity. I've talked about this a lot in the context of R2, the lack of choice, but this also is true in the case of R1. And R1, as it stands, R1S is, I called out in my opening remarks, it's an enormously successful product in this premium price category. So it's the best-selling premium SUV, electric or non-electric, in the state of California. And then it's the best-selling premium electric SUV in the United States and the best-selling premium electric vehicle, SUV or non-SUV, in a number of states across the U.S. And so with even less choice now in that price category. It does represent an opportunity for us. But I just say very broadly that the overall lack of choice, and this is really true in the price category of R2, we think is an enormous opportunity for us to capture market share and, of course, provide something really exciting to customers.

Yeah, makes a lot of sense. Thank you. My follow-up, just for the strong gross profit contribution slated for this year. Can you help to mention at all what the expected contribution might look like from VW as we think about that 60% year-over-year growth? Thanks.

Sure. As you think about the software and services segment, roughly half of our revenue comes from revenue streams associated with our joint venture with Volkswagen Group, and we expect that to largely remain true as we look ahead to 2026 as well. And it is a more disproportionate share of the overall gross profit dollars that we earn out of the Saffron Services segment as a whole.

This concludes the Q&A section of the call. I would now like to turn the call back to Arde Skirinj for closing remarks.

Well, thanks everybody for joining the call and we apologize for some of the technical difficulties that we had at the start, but hopefully a takeaway from this is just how excited we are about R2. As I said, I've had a chance to spend a lot of time in the car and in a variety of ways, whether it's taking my kids to sports games or loading up the back with gear, and it is just such an incredible embodiment of the Rivian brand and captures so much of the essence of what makes R1 a special vehicle, but at a price point that, as we said, starts at $45 and will allow a much larger number of customers to access the vehicle. And so as we think about the next couple of months, we as a company remain incredibly focused on the launch ramp of this vehicle, along with the continued development of the technology we're building, both on the software side, which we talked a bit about, but certainly also on our autonomy side. And so with that, thanks again for joining the call. And we're looking forward to a lot of folks being able to experience the R2 themselves.

All right. So that's probably the end of the actual call. I'd love to kind of run some things by you guys, my takeaways. Go ahead and close this. I think we're done there. Unfortunately, there's a bit of a delay between what i said and what you guys show up for the chat so i'll try to keep an eye on both here but uh overall i would say that's it you know i want to start by saying this is not financial advice and others have asked do i have some shares i do have a few shares from years ago it represents a very small percentage of my overall portfolio make whatever decision you want on your own behalf i'm just looking at just sort of the health of rivian as well as the the big question of product line focus and timelines because i know a lot of you guys that watch the channel have questions about what's coming when how much is it going to cost and that kind of stuff one of the things that really stuck out to me here in the shareholder letter looking at year over year losses uh obviously the company is still losing money see if i can quickly find it here uh it's quarterly performance um yeah anyway the main takeaway was they lost money this year but they lost less than they lost the year before even though deliveries were down and they are expecting to lose less money next year than they did for this year. And I think that that's a pretty big deal. A lot of that seems to be offset by the software and services revenue with that Volkswagen joint venture. So in the absence of regulatory credits with things, how they've shifted politically speaking, that's a big deal to have that revenue stream. I think the Volkswagen deal, frankly, kind of saved their butts, getting a bunch of cash in the door through just a general cash infusion, through buying stock and that kind of stuff, as well as the continued revenue coming off of that software and services seems like a really big deal. They don't seem that worried about the sort of Gen 2.5 phase of R2. They seem to be rushing to get R2 on the streets as fast as humanly possible, even though they aren't ready with Gen 3 autonomy or LiDAR. They've said in the past there's some certification bottlenecks there, and i wonder is that certification of the lidar or is it some kind of like manufacturing validation process of their custom silicon with wrap one uh you know one of those or potentially both but at least one of those is definitely the uh the core issue so we will see how that shakes out i see a question about lidar not coming to r2 till 2027. you know it it was a little bit confusing on the way he said that because in the past they had said late 26 um i had been hearing like october to december sort of time frame you know even when they're shipping it right out of the gate it may not do anything special i mean for example we had uh you know mobile eye units in our gen 2 vehicles up until just like a month or so ago two months ago and so it's you know maybe it's going to lean on some kind of like more basic version of the sensor set means you know i know that early hardware for tesla for example they're actually running like hardware 3 and emu like in an emulator on hardware 4 because their their models were primarily designed around hardware 3 at the time so with so much compute overhead of gen 3 it's not off the table that something that could be a reality where they're basically running like gen 2 2.5 and emulation mode on gen 3 um i don't know but there's clearly something some kind of bottleneck there i think the reality is is that even once they're shipping the hardware it's probably going to take them a while to be any kind of meaningful performance difference and i said in the chat here earlier i tend to think that having that big ground truth fleet of lidar on all these r2s which they've said a couple times now both from james philbin who heads up their you know vp of autonomy me as well as rj has said several times that once they start shipping lidar on r2 every r2 will have lidar so i think that that's that's compelling and i actually think that's going to help do a nice feedback loop and i think that all of us with gen 2 vehicles you know we have two of them um i don't expect it to ever reach the ceiling of what gen 3 is going to reach especially with the better sensor suite but i do think that it's going to help them rapidly collect a lot more data to where our gen 2 experience is going to get a lot better a lot faster than it would if that gen 3 and lidar fleet did not exist on the mass market vehicle clearly they're going to have to either you know change the design of r1 for r1s and r1t to include gen 3 and lidar down the road but i think that that's a really low priority because sales have already slid on r1 and they're probably likely to slide even more let's take a look at some of your comments here make sure i'm staying on point yeah low mileage pre-owned r1 for 45k to 60k and then pick up an r2 in one to two years that's not a bad play you know these things depreciate so fast uh early on so you know getting a lightly used you can even get a gen 2 a 2025 gen 2 maybe you know even by the end of this year you can get a 2026 gen 2 from like the early part of the 26 model year low miles take you know 20k plus off that sticker at least maybe closer to 30k off that sticker ride that thing for a couple years with effectively the same sort of autonomy feature set um yeah that's that's not a bad not a bad play at all they did ask about uh one of the analysts did ask about if lidar could be retrofit and the answer is no i think that they're going to probably stick to that i know that they've backpedaled on some retrofit stuff in the past for example you know when they pulled the power tonneau off the r1t they said if it doesn't come with the power tonneau you can never get it you can only get it replaced if it breaks and they ended up changing their tune on that basically if you had the wiring harness in there which not all models did but most did they will now sell you a three thousand dollar it's called v2 but it's basically the third version of the power tonneau and they'll install it on your you know all the way down to your gen one truck even if it did not ship with the tonneau i do not think that will be the case here typically for these computers there's a different wiring harness different cooling requirements so i think there's going to be enough different here that they're not going to want to do the effort to do it the only thing that would be in favor of a retrofit at least for the computer part even if they don't do the sensor is the fact that it appears that the autonomy computer is right under the sort of center main screen so in theory it should be pretty accessible for them to get to should they need to but i do not expect that to happen they have reiterated multiple times they do not plan to do that either um i wanted to talk a little bit about the point-to-point autonomy that they keep talking about you know coming by the end of 2026 i found it really interesting that the language that they chose on this call was uh limited point-to-point autonomy and when we actually go look at uh rivian's website i think there's some hints as to what that may mean so if we go here and we go take a look let's take a look at r1s explore come down here what i really want to get at tommy plus i think we scroll down here we look at what's planned for 2026 to me when they say limited point-to-point autonomy i bet they mean on-ramp to off-ramp so we might need to recalibrate our expectation for what point-to-point means in 2026 personal belief um they tend to be you know pretty pretty reserved on what they promise they've missed it a few times on autonomy already but i'd be willing to bet that the language going forward probably starts centering around on-ramp to off-ramp autonomy and hopefully some basic just for for safety sake hopefully some basic stoplight and stop sign and control but i don't think we're going to necessarily see the city point to point that we experienced you know i was fortunate enough to go to the palo alto thing in december and i did get that early developer demo um at this point i kind of don't expect that by the end 26 that's probably an early 27 so that's my thoughts on that let's take a look what else we got here so r2 being available for non-reservation holders i mean i think that really depends on the take rate from the backlog right if we're if we're seeing them run through the backlog and a lot of people are deferring because it has been a couple years now since that initial unveil it's been it'll be two years right next month because i think it was in march so two years uh and change before the first gets delivered to customers so i think it's going to be you know priority like they've said r1 owners first and then regular pre-order holders next and then if that backlog says no then they're going to start opening it up to people who want to come by and they're probably going to still try to sell you performance dual motor uh dual motor large pack you know those the higher margin stuff as early as they can oh wow you uh sold the gen 2 r1s tri-motor max pack 8 000 miles on it for only five grand less you you bought it for 97 that's a pretty good deal for a gen 2 trimotor so that may have played into it um do i think rivi needs to do more education about the fact that lidar is basically just to collect training data and isn't really to be used for autonomy i i actually think it is going to be used for autonomy because it can actually get earlier detection i just also think that it can be true simultaneously that the data collection there will make the rest of the fleet better that does not have lidar but i still think if you have lidar hardware on your car you are likely to get better performance out of that vehicle than a car without lidar yeah you see the lidar causing major deferrals on orders i'm not i'm not totally convinced on that i think people have you know fomo about not having the latest and greatest but I also think that most people will come to the conclusion of if I need a car and I can hit my price point and everything else on it looks good enough a lot of them are going to tell themselves they do not care about autonomy and so it's not going to be as much of a deal breaker as it would be for someone like me or even someone like my mom where I'm looking at it like okay it's probably going to be her last new car so it'd be really helpful if it had some potential future capability at more or less the same price day one yeah if you have an r1 and you're and you're happy with it i i think we're looking at probably you know a six month or less wait to get gen 3 and lidar and i and we see this all the time with automakers where they will ship sometimes a version that has got some known flaws or known deficiencies compared to what's right around the corner and they'll do a short model year run and the next one fixes like everything that people were complaining about so if you could wait you know ideally to early 27 get gen 3 get lidar and those us sourced battery cells i think you'll probably be happier overall if you're not in a rush to get a car but just like with computers you know people come to me asking what computer should i buy what macbook whatever if you need one today buy the best available but if you can wait for right after a new big generation pops uh go that route yeah see that you had a good deal on that trimote that's part of why you came out so nice on that yeah i tend to agree i think a big chunk will take it without lidar no problem i might even be higher than a third honestly if you gave me the choice and yes i do think the r1 market will dip more once the r2 is released if you look at tesla how it worked for model s and model x once model 3 and model why we're released it really takes a lot of the demand off of the bottom side and when you look at the average selling price that rivian has and then i've got my lease calculator and my lease versus buy tool which now has well over 8 000 deals analyzed just in the last like four-ish weeks uh the average selling price there and the most popular skews tells me that the low end of the models is by far the most popular and i can't tell how much of that is because uh people love boxy three-row suvs which is true or because it's the least expensive ribbon they can get into all right let's see what else we got here this is fun doing q a with you guys thanks for being here i appreciate it all right factor into the actual driving experience i think again i repeat i think going to be used for more than just training but i do think even cars without lidar will benefit from the cars that do have lidar but the ones with lidar will will very likely have improved performance because they can have earlier object detection in ways that you just can't do with the without that sensor being in there uh question about us batteries there's a little bit of cost in there possibly performance i think the biggest thing is that it's it's not just that it's the same 4695 as i understand it at least uh coming from a u.s facility compared to the south korea facility my understanding is it also comes with different battery chemistry so one could assume that they're doing it for probably tariff reasons and probably a cell that they want a more custom designed as opposed to giving something more off the shelf people's leases come to an end on tesla be looking to pivot um yeah i mean there's i think there's a lot of people that really enjoy their model y but you know i owned a model y and some of my biggest beefs with it were the fact that it was kind of like a bloated car uh rearward visibility out of the rearview mirror was terrible because that slope shape the actual piece of glass is pretty big but you can't see much out of the back uh small mirrors and no ground clearance and those are three things that the r2 i think specifically does a really good job with what else we got here is any signal when removing we'll start selling the r1t and r1s with the new steering wheel um i do not think that that's going to happen on the 2027 i think it's too soon i think we're going to see a handful of upgrades go watch my video from last night basically i go into all that i don't need to waste everyone's time with that here but long story short i think that the the halo haptic touch controls are likely at minimum a 2028 model year thing for r1 i would love to be wrong on that though could be guys leaving thanks for being here really appreciate all of your time and effort yeah waiting your model y lease to end yeah yeah the r1s and the r2 are great i actually think that the driving dynamics might be a little bit more sorted on the r2 even you know it's a unibody design instead of body on frame which we kind of knew but definitely learned uh for sure after this first drive impression from the small media group that was there and the fact that it's on coil suspensions with adjustable dampers i think that that's actually going to mean that in most drive modes it's going to drive nicer than some of the drive modes in r1s the air suspension is pretty sweet especially in r1t but even second gen r1s that was re-engineered does not ride as well as the r1t in my opinion and i don't think any of the r1s ride well in low suspension setting i think they get really crashy and bouncy and i don't think you're going to get that with the coil suspension i think it's going to be pretty well sorted in all drivetrain styles and settings um there was a note in the uh you're asking about the expansion of charging network and repair centers there was a note in here about an expansion of charging see if i can find it i did see that so they don't actually mention here what the growth is just that they currently have over 930 chargers and they also talk about they're going to continue rolling out the nacs compatible chargers we've seen them at several of the ran sites swap out about half of the cables to nacs and i think eventually you know they've got to all become nacs and so the funny thing is those of us with ccs vehicles will have to use an adapter just like tesla superchargers as far as service um i know that that was a focus they had that that slated focus about a year ago saying that they were going to do more service centers and more mobile it's almost seems like they've slowed down on new service centers but i have definitely seen an expansion improvement on mobile so i'm i r2 is going to stress that quite a bit i think that they're going to find out that they undershot but service centers are very capital expenditure heavy so i understand why they are a little lenient to do that okay if you have a mile 13 hours long you're fine with without full autonomy makes sense to me what would make rivian different than the volvo with their lidar flop uh i think the big thing here is that rivian has has actually designed their own lidar in-house they're not just pulling a luminar product off of the shelf which now obviously there's that luminar debacle and luminar is basically going out of business what i can tell uh and the other the other component here is rivian tends to be fairly intentional about what they include and they uh their planes that actually use it the rare exception to that that i can think of is that they obviously whiffed on the gen one driver monitoring system that they ended up yanking from the car and saying that there would never be driver monitoring other than hands-on wheel for capacitive touch i think in this case the fact that they got the cost down so much it's an in-house design that they can control with firmware and it doesn't nuke your phone or cameras when you're recording it it's going to help a lot yeah i'm really curious you you're saying with the ix you have an ix lease and you're waiting until uh gen 3 r2 i'm i'm curious what that's going to be like for you going from an ix i can totally see that jump i think you're going to really like the the software that that that software 2.0 by the way that they showed off and uh r2 and with seam confirmed that it's a like os 2.0 that thing looks slick yeah thanks it is great this channel's been a fun ride it's been less than a year which is pretty wild to me uh sunroof being dimble in the r2 i yeah i think that the vision type stuff probably is not on r2 at least for what we're going to get in the beginning it is possible that we see maybe some form of like an ascend trim in the future like like a tri-motor might be an ascend with a vision to try to like justify that higher price but i did not see anyone talking about or showing uh you know dimmable roof and when they were in the software ui which was clearly unfinished so i don't want to take this as like the de facto standard i did not see any obvious buttons for dimmable roof and these were otherwise well equipped dual motor performance trims so you've ate it i'm assuming you mean like the driver assistance chip will be capable of full self driving or we need upgrade i think that they will deliver sort of fsd like i'm not going to say that the performance will be exactly the same but similar in terms of outcome i think they're going to deliver point-to-point on the gen 2 hardware because it's quite quite competent and we're seeing other automakers uh roll out similar point-to-point solutions with nvidia oran or and or their successor nvidia thor but the fact that we're seeing examples with oran makes me bullish there's enough compute there if you look you know you can never really compare the tops rating between chips because that's a little bit of a misnomer in my opinion but i do think it's highly capable and uh yeah i think we're gonna get it even on gen 2 so i think that bodes well for gen 2.5 and gen 3. uh it's a battery lfp for all r2s now i believe what i've heard is that the standard pack in the future might be lfp but as far as i know the large pack and all everything that the media fleet was driving was nmc so more traditional battery chemistry how the ribbing stock will respond man this is not financial advice i have no idea what the stock is going to do and even if i did i can almost guarantee you would do the opposite so uh wrong question to ask yeah updated you i look gorgeous best in class configurable i agree um if they roll some more media options on that for users like youtube music i know is a common request i'd also like to see more video streaming services baked in there like apple tv and that of stuff i think people will quickly forget their desire for carplay and yeah the software looks super snappy i think that infotainment chip i said at the beginning of the call i think the infotainment chip is actually as much if not a bigger deal for most people day to day than even the autonomy chip yep mc agreed on the chemistry first versions are not going to have lidar that's coming later later in this year possibly early 27 but at least not until late 26 where you get lidar with the upgraded gen 3 chip point to point in april maybe but point to point of what is that point to point highway with automatic lane changes interchanges on ramp off ramp or is that like my house to your house that is the debate what is your definition you know i honestly you're you're asking about leaving more features for the R1 platform there will be a few things probably like air suspension that we may never see on R2 but generally speaking I don't think Rivian actually cares which one you buy I think that they want to be a software company and I think we look at their revenues from being a you know software and services company selling to Volkswagen if you buy an r2 and they can sell you uh you know a tiny plus subscription they're fine with that as opposed to buying r1 which is more complicated more prone to issues you know because there's more parts and more things that change up 15 after hours look at that that's cool yeah yeah you know one thing i'd love to see on r1 that r2 apparently does is you know r2 is seemingly a even the dual motor configurations it does that clutch disconnect kind of like r1 but apparently does it way way faster and importantly what i would love to see is so r2 is when it's when it's in two-wheel drive mode it's it's rear-wheel drive and i think that r1 would benefit from that quite a bit another question do i own the stock i do have a few shares from years ago it is a small percent of my portfolio though, I don't consider myself an active investor in Rivian. How many R2 deliveries in 2026 do you think? Well, they said that they expect, what, around 65,000 deliveries overall for the year, and that includes VAN and R1. I think R1 sales are continuing to slide here post-tax credit. um so you know what at best 25 to 35 maybe of r2 this year and a lot of that will be backloaded towards the end of the year yeah asking about parking um why it's always one of the last steps for autonomy platforms i agree it's kind of crazy that you can go buy like what like a $18,000 Hyundai that can do some self-parking and your $127,000 quad motor R1S with all the technology and 360 cameras and yada yada cannot do it but going back to this roadmap we're talking about earlier auto parking I'm hopeful this comes sooner rather than later I don't necessarily need it but it is a bit of a pain to park the car especially the truck being longer than the S So if they have that and it's good and it's quick, one of the problems with the early versions of Tesla is it was too dang slow. But it got pretty good there towards the end of us owning even our hardware three car. Voice chat and iMessage integration, that is coming with Rivian Assistant and I think we're going to get it really soon. The question is, are we going to get it maybe in the March update? I don't believe it's in the current 2026.03 build that we've seen the release notes for sometimes they withhold stuff and then decide to ship it or like you know we saw with digital key you know for the watch um that took a while to come so probably the next month or so yeah yeah i think i think the r2 is gonna be super popular uh do the r1s have a lot of wind noise you know the early r1s kind of did i don't notice it too bad you i did this over 5 000 mile road trip last summer and for being as blocky as it is i thought it actually fared shockingly well in terms of road noise well the first r2s be gross margin positive absolutely not at the beginning of a new run uh you know they're they have so much capital expenditure and they're going to be so slow putting together they're going to make a lot of errors i i don't see any way that the first significant section of r2s are anything other than gross margin negative. I don't think they expect their automotive sector outside of the vans to be gross margin positive until after they get to the volume where they have Georgia open and they're producing like 200 to 400,000, you know, 200, 300,000 range of the R2s is what they've said in the past. Yeah. Yeah. Stock being up a bunch, man. I gave up a long time ago trying to predict where it's going to go. I participate with what I can. Again, this is not financial advice but like you know every time i try to make what i thought was a rational decision the market would always do the opposite so shows you what i know do i think the weight for lidar is based on a time frame or delivery amount i think it's time frame i don't think it has to do with like we hey we have to deliver x number of r2s before we can put in lidar and gen 3 i think they have to get those two components certified or running on a manufacturing line and i think that they are anxious to get those into vehicles as soon as humanly possible as well because they don't want to deal with the customers that feel regret for potentially buying the wrong stack they know that some people are going to defer their sales for it and they want that ground truth fleet out as soon as possible so they could advance that flywheel for autonomy yeah very little window in r1s smart wheel management so the conserved mode on gen 1 r1tis can move between front and rear yeah i uh i really don't love the clutch disconnect mechanism it it definitely got better with you know the gen 2 setup compared to gen 1 it was particularly bad in gen 1 and then the quad version on gen 1 with the bosch motors and then you know wasn't an automatic clutch and so conserve was permanent two-wheel drive at least in the current implementation they still do all-wheel drive when they're in low speed or lose traction or you do a hard acceleration but i think that that rear wheel drive is going to be a lot nicer version of that clutch disconnect and i'm really curious about driving it because i didn't notice any of the reviewers lamenting about a clutch disconnect during their drives so hopefully that means that they've improved it uh yes the vans are gross margin positive and higher trims of the r1 are gross margin positive based on past calls uh if i remember correctly all right let's see what else you got here kind of wrapping up here yeah i do hope they they nail the uh i assume you mean qc the quality control or quality assurance qa yeah um you know the benefit the r2 has here is that it's just a lot less complex vehicle so there's just fewer things to screw up on day one i would love to see them at least at least get uh wheel alignment correct at delivery that is one of the weird ones that for some reason rivian just really struggles with and it's one of the top things i tell people when they're picking up their new vehicle is like you know drive it around the block and immediately come back and let them know if the alignment's off yeah i think i think r2's gonna be backloaded at the end of the year but i think it's gonna they're gonna really be trying to ramp and and going going hard by this time next year walmart edvs are those are those probably bright drop vans for walmart right would they add the kasha lidar to the premium you know so they said they want lidar on everything and if you're asking if the trims would be more expensive i mean you have to imagine the lidar unit they've said is like a $200 part but it brings an immense value for training their autonomy that they hope to sell you for either 50 bucks a month or $2,500 one time and those prices may even go up in the future so this might be a situation where they just kind of leave the price as is or because the model year people are usually sort of used to swallowing you know a two to five hundred dollar price increase year to year so maybe they kind of hide it in that yeah i wish the disconnect was manual uh i wish that the key up version of the duels did not have the disconnect enabled or just remembered your last like at your last setting we have this you know upcoming sport mode for r1 to make it full-time all-wheel drive but unfortunately to get the epa numbers and to get that coveted over 400 miles on the sticker for epa it's got to work the way it does which is quite annoying in my opinion but other people don't even notice at all so maybe it's just me well they had full autonomy for their new bikes uh it's it's pedaled by wire so there's autonomy in the drivetrain so there's something yeah i don't think the 45k engine point disappears um yeah they said around 45k so if they have to make it 45 990 and give you lidar i think they'll do that yeah i mean kyle was annoyed he wasn't invited it seemed um i can't speak for him i think the launch of r2 i think you know like i would have loved to been there of course but i think that they did pick mostly the right people i think the vast majority of people there did what rivian wanted to accomplish uh i first of all i think doug's doug demero and the car wow video are incredible so if you're looking to actually get spend some time in there i think they did the most in-depth for what people that are going to spend time uh you know on this live call with me are going to want to watch i think those are definitely worth your time i think the other ones that were out there that were much shorter much more topical are probably what rivian wanted at this stage because the product is not fully finished they still had some rough edges we saw some gaps on doug demuro's the software's clearly not done i think they wanted to drive awareness and overall interest in the category of this like lower priced suv coming from rivian who has been a fairly aspirational brand up until this point so i think that they probably picked the right path um it didn't satisfy my desire as an individual but i can totally see why it probably satisfied the desire for rivian at large so hopefully that helps yeah thanks for being here ted appreciate it glad we're all hanging out together you know shooting for the top trim you said feels wrong to you this is what all manufacturers pretty much do i can't think of any new car launch where they immediately had the cheapest model available on day one so i hear you i know that that's the line they're touting the thing that bugs me the most is that whenever you go to any car website they will say starting at 45k over 300 miles of range zero to 60 you know 2.9 that car doesn't exist and that is true of phones computers cars and that that has bugged me for a while but um i do think that they need to ship a 45k version this year i think they're doing the right thing by by waiting here so what else we got here yeah i think a year or sorry a month for that configurator is going to be awesome yeah i mean rivian's had some bugs they've had to work out on their software stuff but um the trajectory is encouraging and if you look at what's coming out of traditional lems you know bravo good job no lidar cannot be added afterwards i do have some thoughts in the emergency manual door opening accessibility my question is if this is the rethink because they came out with that article or that press note about they were re-engineering the manual latch on the second door if this is the re-engineering what were we talking about on the original design um i don't i don't mind electronic turn releases in general as a concept uh i think you know you look at like gen 2 especially on the front doors the fact that there's a handle right where the original handle was on gen 1 that's a fairly obvious place in emergency someone might think to grab when they're panicked i don't think hiding it away under any kind of removable panel is ever acceptable and even the front of r2 is like bare minimum acceptability uh in my opinion because you know if again if i think of a loved one a family member in there that's that's not as tech forward that isn't nerding out about the video doesn't know how to get in and out of their car in emergency and they're gonna be panicked they need to be able to just basically claw the door and find a way to get out so i think that that's a mess and i i hope we see that change yet again before uh for the final final but probably not yeah so you talk about the epa ionic 6 about you know blending between eco uh you know that's that's how they come with the epa number for the tri and quads i believe that it's a mix between conserve sport and an average speed of 48 miles per hour which is why you see kind of the weird epa whereas if you actually go compare for instance i have a range calculator which is travisketcham.com slash range dash calculator and if you go in there the reason i built it is actually because of this blended mode thing because people most people don't realize like if you have a an r1s with road wheels a dual max and a tri max are only five miles apart for conserve mode on a tri compared to all purpose on a dual which operate the same way but if you look at the rivian's configurator you would think that it's more like a 40 almost a 40 mile range difference and so this is kind of a you know weird game they have to play to get the epa to say over 400 if they were willing to do an all-prone all-wheel drive mode for dual motors i would love that as a user i think that would be the one to buy because i don't think i don't think most people need the power of trier quad to be perfectly honest i'm quite happy with even just a base dual power uh but they want get that over 400 for marketing and so this is where we're at all right see what else we got here to kind of wrap this up do i think it's a bad idea for rib to let this much content go all those ugly decals on it i mean at least they you know you're looking at something different uh i think a lot of people that aren't nerds like us or you know i say that lovingly as part of the tribe honestly probably think that an r2 is an r1s and so at least by putting decals on it it's different and they're probably banking on nerds because it's, you know, Star Wars reference, but, you know, they aren't beautiful shots. If I look at the, some of the photos in here were pretty good, like the one I used for the backdrop of this video. Like this is a pretty good photo, but they're not going to sell you a car that looks like this. And I think it's not the most aesthetically pleasing. I did notice the interior of the door jams though on a lot of those press cars. Look at that blue color. What do you guys think? Some kind of California name? oh tahoe catalina thinking like you know mac os names probably something like that for for a nice blue i'm a sucker for a good blue all right let's see what else we got here drain plug in the front i didn't see one uh for drain plug in the frunk so i don't know but a lot of the videos didn't like necessarily show every little nook and cranny uh yes who i work for i run a software company that i started it's an email platform called campaign refinery um it's typically sort of a smaller uh number of customers that send a whole lot of email but uh spent a lot of years mastering deliverability getting email into the inbox they watched all the recent videos nobody mentioned the charging pad for phones but if you look at it you can clearly see a much better ridge for a camera bump and there's a little bit of behavior when people drop some phones on there that you might see some magnetic activity even if it wasn't specifically called out so I'm doing a little bit of reading between the lines but I feel pretty confident this thing is going to be squared away finally for a decent charging pad for phones yes v2h solution I think 2026 is finally the year I think we're finally going to get something you can hang on your wall from Rivian and we're finally going to get the software unlocked by the end of the year for v2h yeah I haven't actually spent time looking at the new Model Y emergency release. I should refresh myself on that. So thanks for the call out on that. Yeah, used cars will always be the best bang for the buck, especially with EVs. But I love new stuff, especially because I want the new tech. It tends to only be available in the newer models.

Yeah, by front dealership is terrible. I agree.

It's, you know, it's funny. It's actually, if you look at surveys, more people are afraid of public speaking than they are of dying. But more people would rather public speak than go into a regular dealership. So what does that tell you? Got to make some margaritas here to respond to the share price. That's so funny. Thanks for the recipe. I will consider that for later. Yo, yo, Kyle. Good to have you here, my guy. It was fun doing our live earlier in the week. Everyone say hi to Kyle. It was a good earnings call, I thought overall. so you can you can watch the replay kyle r3x colorway yeah i would love to see i think i think they consider the blue on the r3x laguna blue with that orange accent and if you've seen you know my videos you know orange watch band uh orange jackets i love orange accents so and i drive a rivian blue r1t so it's like that r3x was made for me for sure and yes emails deliverability is fun it uh it was it was an insane thing to figure out because we've delivered billions of emails now and let me tell you uh that problem changes at scale got lots of love for kyle thanks for popping in my guy yeah you uh you've been doing it for a while man um i definitely watched your videos and when i when i wanted to buy the gen 2 you best believe i sat down with a cup of coffee and however long that gen 2 video was like an hour and a half or something crazy but uh solidified the deal for us to go forward with our pre-order so thanks for doing that yeah although you know it kind of killed me because i knew that that was in the u village spot and i knew that the vehicles were in there before they actually had that event uh because it was all curtained off it's like man it's right there i know the gent is right there but anyway uh do anyone else have any questions i'll give you guys just kind of a few moments here to wrap up i really appreciate everyone's time this was more successful than i expected considering i just sort of thought about it you know last last minute and uh you know this was fun so i do this again for future quarterly earnings that you guys seem to enjoy it and it seems to be a good place for the community to come together movie length content don't have much time for editing yeah well and then i sit over here and obsess in the editor's bay right so uh there's a place for both i i i appreciate both for what they are thank you i i could not ever keep up with the content volume you do kyle so thank you for your contribution to the community even if i have to watch it at 1.25 or 1.5 x speed sometimes cool all right well i'm gonna wrap it there thanks everyone so much for being here until next time stay curious