Rivian Automotive (NASDAQ:RIVN) used its fourth-quarter and full-year 2025 earnings call to highlight improved unit economics, its first full year of positive gross profit, and a 2026 outlook shaped by the launch and ramp of its upcoming R2 midsize SUV. CEO RJ Scaringe, CFO Claire McDonough, and COO Javier Varela emphasized that 2025 was a “foundational year” focused on execution and preparing to scale, while acknowledging that a new vehicle launch is expected to pressure automotive gross profit in mid-2026 before improving later in the year.
R2 launch plans and product positioning
Scaringe said Rivian is “months away” from starting customer deliveries of R2, describing it as the company’s first mass-market vehicle and arguing that the U.S. EV market lacks “high-quality choices” at or below roughly $50,000. He said the R2 will extend the R1 experience—design, performance, and an “adventure” ethos—into a smaller vehicle at a lower price point.
McDonough told analysts Rivian expects first R2 deliveries to begin in Q2 2026, with small volumes early in the ramp. She said production of the R2 launch variant will start on a single shift, with a second shift added toward the end of 2026, and a third shift planned for 2027. McDonough also said the company does not expect to be at “full production across two shifts” by the end of 2026, describing the second-shift addition as a ramp.
In response to questions about demand and launch cadence, Scaringe said Rivian is “very, very focused” on serving a segment where he sees concentrated market share due to limited alternatives. He also said Rivian has a “large demand backlog” for R2 and expects demand to outpace production during the initial ramp, making the configuration process important for sequencing early deliveries.
Autonomy and software roadmap: RAP1, hands-free features, and future hardware
Rivian also discussed its autonomy and software initiatives, including what it showcased at its December AI and Autonomy Day in Palo Alto. Scaringe said the company unveiled RAP1, its in-house chip, which he described as driven by “velocity, performance, and cost efficiency” for Rivian’s autonomy platform.
Scaringe said Rivian released Universal Hands-Free late in 2025, expanding assisted driving for Gen 2 customers to more than 3.5 million miles of roads across North America. He added that customer utilization of autonomy features has doubled since the feature’s release. On the roadmap, Scaringe said Rivian expects to enable point-to-point driving later in 2026 (enter an address and have the vehicle navigate to it), and he outlined longer-term ambitions including “hands-off, eyes-off” capabilities and, eventually, Level 4 applications.
Addressing questions about retrofit opportunities, Scaringe said hardware retrofits are not planned. He said the hardware upgrades discussed at AI and Autonomy Day are expected to be on vehicles in early 2027 and confirmed that the Gen 3 architecture discussed for that timeframe is for R2. He also said Rivian’s point-to-point demo at AI and Autonomy Day was conducted on a Gen 2 R1 vehicle and that point-to-point functionality will be available for Gen 2 R1 vehicles as well as the launch R2 vehicles.
Volkswagen joint venture and software and services growth
Management repeatedly pointed to the Rivian-Volkswagen Group joint venture as evidence of the scalability of Rivian’s software-defined vehicle platform. Scaringe said Rivian has delivered vehicles for winter testing for multiple Volkswagen Group brands 13 months after forming the joint venture, and that both teams are working toward first launches of Volkswagen Group products in 2027.
McDonough said Rivian’s software and services segment delivered another strong quarter, generating $447 million of revenue and $179 million of gross profit in Q4. She said $273 million, or about 60% of software and services revenue, was attributable to the Volkswagen joint venture. In Q&A, McDonough added that roughly half of software and services revenue comes from Volkswagen-related revenue streams, and she expects that to “largely remain true” in 2026. Scaringe clarified in response to a question about data that what Rivian is delivering to Volkswagen does not include Rivian’s autonomy platform; it is focused on Rivian’s embedded software platform and ECU/zonal architecture.
Scaringe also suggested Rivian sees longer-term opportunity beyond Volkswagen, saying manufacturers will need to decide whether to build software-defined vehicle capabilities in-house, source them externally, or risk losing market share.
Financial results: positive full-year gross profit and Q4 details
McDonough said 2025 included meaningful improvements in pricing and costs. She highlighted:
- Nearly $5,500 of improvement in average sales price year over year, driven by the introduction of second-generation R1 quad models, a higher mix of R1 units, and increased base prices for the 2026 model year.
- Approximately $9,500 improvement in automotive cost of goods sold per unit year over year due to material cost reductions and operational efficiencies.
- More than $1.3 billion improvement in full-year gross profit, making 2025 Rivian’s first full year of positive gross profit, supported by automotive unit economics and “strong software and services performance.”
For Q4 2025, Rivian reported consolidated revenue of approximately $1.3 billion, consolidated gross profit of $120 million, and a gross margin of 9%. Gross profit included $108 million of depreciation and $26 million of stock-based compensation expense. Adjusted EBITDA loss in Q4 was -$465 million, which McDonough said was a $137 million improvement from Q3 due to higher gross profit and lower operating expenses.
In Rivian’s automotive segment, Q4 production was 10,974 vehicles and deliveries were 9,745 vehicles from its Normal, Illinois facility, contributing to $839 million of automotive revenue. Automotive gross profit was -$59 million, which McDonough said improved by $71 million from Q3 due to a higher mix of commercial vans and the “lowest cost of goods sold per unit in our history.” On costs, McDonough said Rivian delivered $92,000 of COGS per unit in Q4, about $4,000 better than Q3, citing mix shift toward commercial vans and ongoing efficiencies.
Liquidity, 2026 guidance, and launch-year expectations
Rivian ended 2025 with approximately $6.1 billion in cash, cash equivalents, and short-term investments. McDonough said the company expects to receive an additional $2 billion of capital in 2026 related to the Volkswagen joint venture: $1 billion subject to successful completion of winter testing and $1 billion of non-recourse debt expected in October.
For 2026, Rivian guided to total deliveries of 62,000 to 67,000 vehicles across R1, R2, and commercial vans, with expected deliveries of roughly 9,000 to 11,000 per quarter in the first half. McDonough said investors should think of R1 plus commercial van volumes as “roughly in line” with 2025 total volumes, with the second half reflecting the R2 ramp.
While Rivian expects gross profit to increase year over year, McDonough said the complexity of launching a new vehicle will likely negatively impact automotive gross profit in Q2 and Q3 2026 before becoming a benefit in Q4 as production and deliveries ramp. She also said Rivian expects both R2 and overall automotive gross profit to be positive as it exits 2026.
Rivian guided to an adjusted EBITDA loss of $2.1 billion to $1.8 billion for 2026. McDonough said the outlook includes higher R&D spending to accelerate autonomy investments, including plans to deliver LiDAR, first RAP1 chips, and limited point-to-point functionality by year-end, plus SG&A growth tied to expanding service and sales footprint. Capital expenditures are expected to be $1.95 billion to $2.05 billion, tied to R2 construction and tooling in Normal, initiating vertical construction for the planned Georgia plant, and expanding sales, service, and charging infrastructure. McDonough also noted working capital is expected to be a cash outflow in 2026 due in part to inventory build for the R2 launch.
In closing remarks, Scaringe said Rivian remains focused on the R2 launch ramp and continued software and autonomy development, adding that R2 pricing “starts at $45,” positioning the vehicle to reach a broader customer base.
About Rivian Automotive (NASDAQ:RIVN)
Rivian Automotive, Inc is an American automotive technology company specializing in the design, development and manufacture of electric vehicles. The company is best known for its all-electric R1 platform, which underpins the R1T pickup truck and R1S sport utility vehicle. In addition to consumer products, Rivian has secured a significant commercial contract to produce electric delivery vans for a leading e-commerce provider, underscoring its capability to serve both retail and fleet customers.
Founded in 2009 by engineer and entrepreneur Robert “RJ” Scaringe, Rivian has grown from a research-focused startup into a publicly traded corporation.
