Electric vehicle manufacturer Rivian has announced its financial results for the first quarter of 2024, surpassing analyst expectations on revenue growth while experiencing wider losses than predicted. Despite facing challenges along with other EV makers, Rivian remains optimistic about turning quarterly profits by the end of the year.

In Q1, Rivian reported a slight increase in revenue, reaching $1.204 billion, compared to the estimated $1.175 billion. Although the company achieved an impressive 82% year-over-year revenue growth, it posted losses of -$1.48 per share, exceeding the estimated loss of $1.15 per share.

Rivian's delivery figures indicated steady performance, with 13,588 units delivered, unchanged from the previous quarter but marking a considerable 71% increase from the same period last year. Additionally, the company claimed a 5.1% market share in the US electric vehicle market, a remarkable feat considering its exclusive focus on high-end vehicles. The R1S model emerged as the best-selling EV priced above $70,000.

Despite improvements in their gross margin on vehicles, with losses reduced to $38,784 per vehicle from $43,372 in the previous quarter, Rivian's gross margins were still worse compared to Q2 and Q3 of 2023. However, the recent plant shutdown, which began on April 5 and concluded on May 1, aims to improve margins by increasing efficiency by 30%.

Rivian's management expressed satisfaction with the progress made in cost optimization and projects a slight positive gross profit in Q4 of this year. The company plans to provide detailed insights into the plant shutdown during its earnings call scheduled for 2 PM PDT/5 PM EDT today.

In addition to its financial results, Rivian provided updates on its future vehicles, R2 and R3, which will allow the company to expand into higher volume markets. The R2, set to debut in the first half of 2026, will have a starting price of around $45,000. Meanwhile, details regarding the timeline and pricing of the R3 are yet to be announced.

Rivian's decision to move R2 production to its existing plant in Normal, IL, instead of a planned facility in Georgia, is aimed at reducing short-term capital expenditures, saving the company approximately $2.25 billion. To achieve this, Rivian recently trimmed 1% of jobs to optimize costs. This move will also increase Normal's production capacity to 215,000 units per year across all products.

Furthermore, Rivian lowered its capex guidance for 2024 to $1.2 billion, down from the previous estimate of $1.75 billion. The company anticipates further cost savings in 2025 and 2026 as a result of the decision to consolidate R2 production.

Rivian's overall projections for 2024 remain unchanged, with a target production of 57,000 units and an anticipated loss of $2.7 billion. However, the company is optimistic about achieving slight gross profits in Q4.

Following the announcement, Rivian's stock (RIVN) initially opened strong due to rumors about a potential partnership with Apple. However, throughout the day, the gains were reversed, resulting in a 0.77% decline. In aftermarket trading, RIVN continued to drop, currently down by 2-3%, as investors await the earnings call, which might also address the Apple rumors.

The release of Rivian's Q1 2024 results demonstrates both the company's growth potential and ongoing challenges faced by EV makers. With strategic measures underway and a focus on improving margins and expanding production, Rivian aims to solidify its position in the ever-evolving electric vehicle market.