Rivian Automotive, Inc. / DE Q1 FY2026 Earnings Call

Good afternoon, and thank you for joining us for Rivian's First Quarter 2026 Earnings Call. Today, I'm joined by RJ Scaringe, our CEO and Founder; Claire McDonough, our Chief Financial Officer; and Javier Varela, our Chief Operations Officer. Before we begin, matters discussed on this call, including comments and responses to questions, reflect management's views as of today. We will also be making statements related to our business, operations and financial performance that may be considered forward-looking statements under federal securities law. Such statements involve risks and uncertainties that could cause actual results to differ materially. These risks and uncertainties are described in our SEC filings and the earnings presentation we filed with the SEC today. During this call, we will discuss both GAAP and non-GAAP financial measures. A reconciliation of historical non-GAAP to GAAP financial measures is provided in our earnings presentation and press release. Just before the earnings call, we posted our earnings presentation, which includes an overview of our progress over the recent months and replaces our shareholder letter. I encourage you to read it for additional details around some of the items we will cover on today's call. Following our prepared remarks, we will be taking questions from sell-side analysts. In the interest of keeping our call to 1 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, Chip. Good afternoon, everyone, and thanks for joining us for today's call. Last week, I was thrilled to celebrate the start of saleable R2 production with our team at our plant in Normal, Illinois. It's an exciting milestone in Rivian's history and the culmination of all the hard work and energy from so many people across the company. As I've said before, I believe the R2 will be a game changer for our customers and will be a key driver of our company's long-term growth and profitability. In an American automotive marketplace starved for high-quality EV choice, I believe R2 is an attractively priced option sized for everyday ventures from school pickups to weekend trips that is targeting the very popular 5-passenger SUV and crossover segment. With R2, we are taking our design, performance and technology and bringing it to a significantly broader audience without losing what makes Rivian unmistakably Rivian. We've started R2 deliveries to our employees, and I have to say I absolutely love having R2 as my daily driver. I could not be more excited to get this vehicle into the hands of lots of customers starting this spring. In developing R2, our team relentlessly focused on achieving structural cost reductions while maintaining the desirability of the product. For R2, our bill of materials is expected to be approximately half of our R1 platform. For non-BOM cost of goods sold, we expect to see a reduction of more than 50%, resulting from a focus on design for manufacturing and leverage fixed cost efficiencies through higher production volumes. This is how we expect to profitably deliver R2 at an accessible price point at scale without compromising performance and utility customers love for Rivian. Key design changes for R2 include part eliminations and reductions through the introduction of large die castings, a structural battery pack, a new highly efficient drive unit, the evolution of our next-generation electrical architecture, which removes miles of copper wire and the consolidation of our high-voltage electronics into a single enclosure. We are also seeing significant sourcing leverage relative to R1 across a variety of components. Now as we begin to scale our operations in Normal with R2, we're very excited to partner with the U.S. Department of Energy to grow our manufacturing footprint in Georgia. R2 provides the opportunity to expand the Rivian brand to millions of drivers. As a result, we made the strategic decision to increase the production capacity for the first phase of our Georgia plant by 50%, bringing it to 300,000 units of annual production capacity for our midsized vehicle platform. This change is expected to boost cost efficiency while still providing significant room for future expansion in later phases and support thousands of jobs in Georgia as we grow American manufacturing and work to ensure the U.S. retains its leadership and innovation in technology and transportation. We remain on track for the production of our midsized vehicle platform to begin in Georgia in late 2028. Turning to our technology road map. In March, we were excited to announce a new strategic partnership with Uber to accelerate our shared autonomous vehicle goals. In the not-too-distant future, I believe advanced autonomy capabilities will be a key differentiator for customers and the driver of market share. At the core of our third-generation autonomy hardware is the Rivian Autonomy Processor or RAP1. The development of our RAP1 chip is on track, and we are progressing well on validation and reliability testing. Our integrated approach allows our hardware team to rapidly iterate with our software team, and our autonomy feature development is progressing well, and we continue to expect to begin rolling out point-to-point capabilities by the end of the year. Finally, in the coming weeks, we are excited to launch the Rivian Assistant on R1 and R2 vehicles. The Rivian Assistant is our new AI-powered voice assistant that is built to be a digital copilot with integration into the vehicle ecosystem and other external apps. In closing, this quarter, our team has executed across many fronts, laying a strong foundation for the years ahead. As an American automotive technology company, we're building for a future that we believe will be fully electric, autonomous, and AI defined. With our category-defining brand, the launch of R2, which is our first mass market vehicle, vertically integrated and extensible technology and the direct-to-consumer sales model, I couldn't be more excited about the opportunity ahead for our customers and for our business. With that, I'll pass the call over to Claire to discuss our financial results.

Thanks, RJ, and good afternoon, everyone. As RJ shared, the start of saleable R2 production and initial employee deliveries are a landmark moment for Rivian. By building R2 in Normal, we are strategically leveraging our existing manufacturing footprint in Illinois to drive greater fixed cost absorption across our entire vehicle portfolio. As discussed previously, R2 production is starting with a single shift operation, and we expect to scale to 2 shifts by the end of 2026 as we ramp towards our North Star target of profitably delivering 4,000 vehicles per week in Normal. Delivering a strong 2026 exit rate for R2 production and deliveries is a key focus for our team as we believe it will directly translate into positive automotive gross profit for the business. Turning to the results for the first quarter. As depicted on Slide 11 of the earnings presentation, our consolidated revenue in the first quarter was approximately $1.4 billion, an 11% increase over the same quarter last year. Consolidated gross profit was $119 million, and our gross margin was 9%. Gross profit included $122 million of depreciation and $27 million of stock-based compensation expense. Adjusted EBITDA losses for the first quarter were $472 million, driven by our $119 million of gross profit and increased adjusted operating expenses as we prepare to scale R2 and invest in our autonomy road map. In the first quarter, we produced 10,236 vehicles and delivered 10,365 vehicles, which was the primary driver of our $908 million of automotive revenue. Automotive gross profit loss was $62 million compared to $92 million of gross profit for the same quarter last year, primarily driven by the $100 million decrease in sales of automotive regulatory credits and lower production volumes, which resulted in a $45 million increase in depreciation and stock-based compensation expense combined. While current macro and geopolitical factors are creating added complexity, cost and uncertainty, our team continues to work hard to manage supply chain risk and offset elevated costs. Our Software and Services segment reported another strong quarter as depicted on Slide 13. During the first quarter, the segment generated $473 million of revenue, a 49% year-over-year increase and $181 million of gross profit. $282 million or approximately 60% of Software and Services revenue was attributable to our joint venture with Volkswagen Group. We also experienced strong growth from remarketing and parts and service. During the quarter, we also recognized $506 million gain in other income in our financials related to the Series A capital raise and related deconsolidation of Mind Robotics from our financial statements. We currently own approximately 38% of Mind Robotics on a shares outstanding basis. Looking at our balance sheet, we ended the quarter with approximately $4.8 billion of cash, cash equivalents and short-term investments. With regard to our funding road map, in 2026, we expect to receive a total of $2.55 billion of capital from our strategic partners. Today, we received $1 billion from Volkswagen Group in exchange for equity following successful completion of the winter testing milestone by RV Tech. The testing program spans several months utilizing reference vehicles from the Volkswagen, Audi and Scout brands. Later this quarter, we expect to receive $300 million from Uber in exchange for equity related to the signing of our partnership agreement, subject to certain conditions. And later this year, we expect to receive $1 billion in nonrecourse debt from Volkswagen Group and an additional $250 million from Uber in exchange for equity, subject to the completion of certain milestones and conditions related to robotaxi development. As outlined on Slide 14, this brings total available liquidity and expected capital in 2026 of nearly $8 billion. Additionally, we're very excited to partner with the U.S. Department of Energy to grow our U.S. manufacturing footprint. The up to $4.5 billion DOE loan, which consists of approximately $4 billion of principal and approximately $500 million of capitalized interest provides low-cost financing for our 300,000 unit capacity greenfield expansion in Georgia, bringing Rivian to meaningful scale. We expect the 515,000 total units of capacity between our Illinois and Georgia plants will provide Rivian a path to free cash flow positive once fully ramped. We expect to draw on the loan by early 2027, subject to certain conditions. Two weeks ago, our Normal factory sustained damage from a tornado. I'm proud of the way our teams have rallied together to get production back up and running while we repair the damages. Despite the weather impact, our 2026 guidance remains unchanged. We continue to expect full year deliveries of between 62,000 and 67,000 total vehicles across R1, R2 and our commercial vans. We also continue to expect to deliver approximately 9,000 to 11,000 vehicles in Q2 as we expect the ramp of R2 deliveries will be back half weighted. While we continue to believe our gross profit will increase year-over-year, we expect the complexity of a new vehicle launch will negatively impact our automotive gross profit in the second and third quarters before becoming a benefit for our overall operations in the fourth quarter as we ramp production and deliveries. As a reminder, we believe this is a transition year for the Automotive segment's path towards long-term profitability as we scale R2. For 2026, we continue to expect an adjusted EBITDA loss of between $2.1 billion to $1.8 billion. While economic and geopolitical conditions, including supply chain and international conflicts pose risks, we remain steadfast in our plans to invest behind key growth drivers. We continue to progress our autonomy road map and the expansion of our sales and service footprint as we scale with R2. We believe these strategic investments will deliver long-term value to our shareholders. Finally, for 2026, we are maintaining our capital expenditure guidance of $1.95 billion to $2.05 billion. Our CapEx spend primarily relates to finalizing construction and tooling for R2 in Normal, the continued build-out of our sales, service and charging infrastructure and kicking off construction of our greenfield plant in Georgia. In closing, I'd like to congratulate our teams again for the successful start of saleable R2 production and the strong execution in the first quarter. We continue to believe that R2 and our technology road map will be truly transformative for the growth and profitability of our business. I'd like to turn the call back over to the operator to open the line for Q&A.

Our first question comes from Shreyas Patil from Wolfe Research.

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

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

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

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

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

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

Our next question is from Joe Spak from UBS.

Claire, just to pick up on the DOE loan part and to clarify, this first phase increases capacity from 200,000 to 300,000 units. Admittedly, from skimming the document, it seems the total project scope may now be capped at 300,000 units, whereas before Phase 1 was 200,000 units and Phase 2 was 400,000 units. I want to make sure I understand that, and whether you still see an opportunity over time to grow further in Georgia.

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

Okay. But and that might be funded more organically in the future, not necessarily with loan or it's TBD, I guess. But the loan is really only up for the 300,000 units, correct?

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

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

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

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

I would characterize it as considered within our current outlook.

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

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

Our next question is from Itay Michaeli from TD Cowen.

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

Well, thanks, Itay. The decision to increase the capacity of the first phase in Georgia reflects the level of confidence in our products and our business. We've just started production on R2 out of our existing Normal, Illinois facility, and we've had early media events and early customer events and the level of enthusiasm for the product has been outstanding. Everything from the packaging of the vehicle to the way that it drives to the integration of technology, the overall response has been overwhelmingly positive. That bodes extremely well for the ramp-up happening over the course of this year and into next year, and it sets up a strong foundation for further capacity on this platform, both for R2 as well as R3 and variants of those vehicles out of the Georgia facility.

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

We talked about this during our Autonomy Day late last year. There will be a series of steps in progressing towards Level 4. The first later this year on our consumer vehicles is launching our point-to-point capability, the ability for the vehicle to drive entirely on its own to an address. I had a great ride with James and the team this week. It's exciting to see how much the technology has progressed even since our Autonomy Day. That first step of making point-to-point available to customers is an important step for our consumer vehicles. As we continue into 2027, we'll allow in specific areas hands-off, eyes-off, which is a Level 3 capability. Then in 2028 we'll have our first deployments of a Level 4 capability in a robotaxi. In the robotaxi variant, there will be some additional sensing on the vehicle, so it will be different than the pure consumer vehicle. But we are planning to have a personal version of Level 4 as well. We think the market for a vehicle that you own being able to completely drive itself—doing things like dropping you at the airport, going to the grocery store, picking up kids from a sports event—these are high-value activities for Level 4 capability, and we see them on both robotaxi applications and personally owned applications.

Our next question is from Dan Levy from Barclays.

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

We've talked a lot about the cost structure of a vehicle and a huge component of this is the bill of materials. The BOM is different than the non-BOM COGS. The BOM involves negotiations across hundreds of suppliers, very different than when we sourced R1. We went into R2 sourcing with momentum and much better supplier leverage. The level of confidence in Rivian as a business and the excitement around R2 helped us put together a set of suppliers that are both enthusiastic and have attractive commercial terms. As it stands, the bill of materials for R2 is about half that of R1. There are things we can't predict like raw material changes and component shortages, but the vast majority of the BOM is very stable, and we have a lot of confidence in being able to achieve the target BOM which supports the healthy gross margins we've discussed. I'll invite Javier to comment on the progress in ramping up over the next several months.

Yes. Thank you, RJ. Last week we celebrated the first saleable builds and deliveries to customers this week. We are very proud of the situation we are achieving now. The industrial process is ready and the people are ready as well. We have completed the right training and build cycles. The plant is prepared, processes are defined, and we are confident in our capability to deliver. We have brought in a group of seasoned leaders with big launch experience. On the supply chain side, we are managing it closely and making sure suppliers scale with us. We have boots on the ground supporting key suppliers and are working with a mindset of transparency and collaboration. Resilient supply chain, agility and intelligence are key factors for success.

Great. As a follow-up, RJ, I wanted to double-click on the point you gave earlier about getting to L4. You'll have point-to-point at the end of this year, and you'll only have the vehicles with LiDAR end of this year, beginning of next year. It seems like there's a lot of testing between when you get those cars with LiDAR and when you have a launch. Help us understand what the testing curve looks like, what you need to do from when you have the cars with LiDAR to unlocking L4 because it seems like many miles need to be driven on that new vehicle.

A key point is how the self-driving system is architected. The platform we launched on our Gen 2 R1 vehicles is designed around an end-to-end approach where we build a large driving model, think of it as a neural net or a foundation model for driving. That model is fed with data from all our Gen 2 R1 vehicles and our launch R2 vehicles, and ultimately R2 vehicles that include LiDAR. Unlike previous architectures that were rules-based, as you add more perception and more compute, the capability of the model grows without losing prior knowledge. It's like learning to drive with vision and being given glasses—you become a better driver because you perceive more. Adding compute is like making your brain much smarter. This is a fundamental difference compared to AV 1.0 stacks. The data accumulation on R1 and from R2 feeds into our large driving model. We already have prototypes with additional sensors running in the field, particularly in the Bay Area, and that ground-truth fleet feeds into the model to accelerate learning. The work for launching a customer-facing version of point-to-point, which I experienced earlier this week, must be extremely robust, and all that work is accretive to what will go into our Level 4 platform.

Our next question is from Andrew Percoco from Morgan Stanley.

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

Our relationship with Amazon continues to be something we're very proud of. We've spent a lot of time on this program from its initial kickoff in 2019 through its launch and ramp. That's everything from building the vehicles to Amazon getting their operations and infrastructure ready to ingest a lot of EVs. We're now seeing a reflection of that cumulative work, allowing the volumes for our van program within Amazon to grow meaningfully. We expect increased demand for vans to continue. It's rewarding to see all the vans on the road. In the immediate term, our focus remains on Amazon and ramping to support them.

Okay. That makes sense. And then maybe just one more question on the DOE revised loan piece here. I understand the movement in Phase 1 and upsizing that. I'm curious why you might not want to use the DOE funding for eventual Phase 2. Is this something initiated on your end? Or did they approach you in terms of revising that? Just curious the thought process around why not tap that low-cost funding for eventual Phase 2 whenever that comes about.

As I mentioned in my prepared remarks, we're excited to partner with the Department of Energy on Rivian's $4.5 billion loan, which enables thousands of American jobs and helps establish U.S. leadership in technology and manufacturing. The DOE loan is a very cost-efficient form of capital. Specifically, the importance of this $4.5 billion is funding Rivian's scaling to 515,000 units of installed capacity between Illinois and Georgia and providing a path to free cash flow positive in the future. We'll continue to be opportunistic about our capital road map beyond the components we've outlined within the existing $13.6 billion of liquidity and total expected capital announced today.

Our next question is from George Gianarikas from Canaccord.

I know it's early days, but could you please give any color on R2 order trends and maybe some color on the conversion ratios relative to previous orders?

George, it is early days for deliveries, but the signals I'd watch are the reception around the product from journalists and customers experiencing the vehicle. The overall excitement around our content features, packaging and value proposition is really resonating. I'm very pleased—it's my daily driver—and the teams did great work. A few journalists have said this might be the best vehicle ever made, which is encouraging as we get ready to ramp.

Maybe as a follow-up, I wanted to confirm that the Gen 3 sensor suite was going to be available later this year on the R2?

That's correct. The Gen 3 autonomy hardware suite includes our in-house RAP1 platform, our in-house inference platform with about 800 TOPS per chip. We have two of those chips in the vehicle, which is a big increase—roughly a 4x increase relative to the NVIDIA-based platform—and the inclusion of LiDAR along with other perception enhancements.

Our next question is from Mark Delaney from Goldman Sachs.

Starting on Autonomy, could you provide more details on the monetization of Autonomy+ so far and any data points you can share? And what that might mean for growth in the Software and Services business more generally, including if you still think you can grow that segment revenue by about 60% this year?

We're encouraged by paid Autonomy+ adoption; it's exceeding our internal models and the take rate is higher than expected. That's promising as we grow the feature set this year. Introduction of point-to-point is a major value driver—being able to enter an address and have the car fully drive you there. Allowing eyes-off in highway conditions and ultimately everywhere means getting your time back. We're very bullish on the long-term monetization of autonomy on the consumer side across hands-off and ultimately Level 4 for personal consumption. In terms of Software and Services growth, that will contribute, but we are not breaking out a separate line item for that contribution now.

My other question was on demand for the R1. Have you seen any improvement in order rates for R1 in response to the recent increase in gasoline prices and what might that mean for R1 volumes this year? I think the company had assumed R1 would decline. Is that still your expectation?

We're encouraged by continued enthusiasm for R1. It continues to be a market leader in the premium category. In some states it's one of the best-selling premium SUVs, electric or nonelectric. It's hard to predict the impact of fuel prices over time, but we are seeing more trades of gasoline vehicles into Rivians, which is positive. However, how long fuel prices remain high is uncertain.

Our next question is from Andres Sheppard from Cantor Fitzgerald.

Congratulations on the quarter and all the great progress. RJ, with R2 beginning customer deliveries and Autonomy+ starting this month, curious on your vision and how you are thinking about Autonomy customer adoption. What type of Autonomy penetration rate do you expect for your customer-owned vehicles? Do you expect customers will prefer the monthly subscription or the one-time purchase? Any color on your overall vision and customer penetration adoption expectations?

We're extremely bullish on the importance of Autonomy for customers over the next five years and the rate at which customers will adopt Autonomy+. Adoption will grow as the feature set and capability grow. From a societal perspective, Level 2 is only an appetizer compared to higher levels that truly give customers their time back. Regaining commuting time, for example, will be sticky once experienced. Over the next five years, progress in autonomy will reshape customer expectations and vehicle purchase criteria. Autonomy will be a critical criterion and customers will be willing to pay for it because they want their time back. We're investing heavily in this area, allocating significant R&D to support long-term adoption and building hardware into vehicles to support it.

Got it. That's helpful. Quick follow-up for Claire. Regarding your delivery guidance for this year, which is unchanged, can you remind us what kind of unit mix to expect for the year across R2, R1 and EDVs? I think in the past you mentioned R1 and EDV relatively flat, with the remainder being R2. For R2, the $45,000 price range is on track for next year. How should we think about unit mix for the rest of this year?

As you reiterated, for the 62,000 to 67,000 deliveries we anticipate R1 combined with the commercial vans to be roughly flat relative to our 2025 delivery results, and the remainder will be the introduction and ramp of R2. The 9,000 to 11,000 Q2 deliveries suggest a back-half weighted ramp for R2, which is implied in our outlook and guidance.

Our next question is from Edison Yu from Deutsche Bank.

I wanted to come back on robotaxi. Are there any KPIs you're tracking or need to hit for some of the milestones with Uber? In the past the industry has turned to disengagements or miles between intervention. Any flavor on that would be great.

On the path to deploying in 2028, there are a number of milestones tied to investment unlocks with Uber. The first is later this year we'll be deploying vehicles in both San Francisco and Miami with a safety driver. The vehicles will be running with a safety driver in the vehicle. There are additional milestones ramping up to having vehicles operate fully on their own as part of a service in 2028. As we get closer to that date, there will be many proof points of progress that will manifest on the road, and you'll see vehicles being tested and part of deployed fleets.

Understood. And just a separate question on autonomy more broadly. There were reports you were looking to potentially license some tech to other OEMs. Anything you can say about that? Is that something we could potentially expect this year?

There are two broad categories of technology where we see opportunities to deploy to other manufacturers. The first is shifting away from domain-based network architectures with many supplier-sourced ECUs toward a centralized or zonal architecture with consolidated compute and a common operating system. That architecture is in the Rivian vehicle today and is the basis of our relationship with Volkswagen Group. The first application of this technology being deployed outside Rivian is in the ID1 launching in Europe at a price point just over $20,000. The second category is autonomy: the combination of our compute platform—the RAP1 inference platform—our perception suite of cameras, radar and LiDAR, and our large driving model. That combination is what we deploy across vehicle types and is flexible to different embodiments. We see significant opportunities to deploy these technologies in many ways and are already doing so with Volkswagen Group.

Our next question comes from Alex Perry from Bank of America.

A bit further on the robotaxi strategy. With the Uber deal announcement, is the plan to pursue a partnership model for now? Does the deal with Uber have any exclusivity? How else will you look to tap into this market?

When you think about the robotaxi space as a business, putting aside technology, the benefit of working with Uber is their very large density of demand and a successful marketplace. Deploying on your own requires building enough vehicles so a user has immediate availability. Uber's platform and marketplace make them an ideal partner for launching this technology as robotaxi service. The technology is the same for Level 4 in robotaxi and personally owned vehicles, but business models will vary. There will be different innovations across ownership and mobility-as-a-service models, and many new models will emerge as Level 4 becomes available. Today, most miles are driven in personally owned vehicles, and robotaxi will represent a portion of those miles, but we expect a variety of models to evolve.

Our final question comes from James Picariello from BNP Paribas.

I want to ask about the Uber partnership. Can you share any color on the milestones associated with the four tranches of funding regarding the $950 million in additional liquidity? It appears one of the tranches is expected to hit this year, $250 million?

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

Excellent. That's great color. Just to level-set expectations on automotive gross margins for the second and third quarters—this quarter showed momentum toward positive auto gross profit and this is the last quarter before R2. Is there anything you can share for the next two quarters regarding the temporary order-of-magnitude impact we can expect to auto profitability?

As we think about Q2 and Q3, we'll see the introduction and turn on of depreciation expense and the new manufacturing team that will be producing the vehicles. As they ramp the first shift of operation, we'll see some complexity associated with lower volumes on the new R2 line. As a result, we anticipate an impact to automotive gross profit over Q2 and Q3 before we see the overall benefits of the ramp, not just on R2's unit economics but also the fixed cost leverage across the R1 program and EDV program. In total, we still anticipate exiting 2026 with positive automotive gross profit for both R2 and total Rivian Automotive gross profit, which is important as we go into 2027 and fully ramp R2 capacity in Normal.

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

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

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