Rivian (RIVN) has reportedly agreed to a “secret” take care of the UAW as it really works towards its subsequent progress part. The brand new settlement is contingent on the EV maker reaching profitability. Right here’s what it’s worthwhile to know.
What the non-public UAW deal means for Rivian
Underneath the confidential deal, Rivian would go for a impartial stance on unionizing efforts at its Regular, Illinois, manufacturing plant.
In accordance with sources near the matter (by way of Bloomberg), the deal relies on Rivian hitting particular targets, together with reaching profitability. The non-public settlement might pave the best way for the UAW to unionize employees in Regular.
Rivian has but to put up a quarterly revenue on an adjusted foundation. The EV maker posted a internet lack of $1.1 billion within the third quarter, down from the $1.34 billion loss in Q3 2023. CFO Claire McDonough reiterated that Rivian continues to be on monitor to succeed in a optimistic gross revenue within the fourth quarter.
CEO RJ Scaringe mentioned the corporate is seeing “significant progress” on decreasing prices after shutting down its Regular plant in April for upgrades.
| Q3 ’22 | This autumn ’22 | Q1 ’23 | Q2 ’23 | Q3 ’23 | This autumn ’23 | Q1 ’24 | Q2 ’24 | Q3 ’24 | |
| Rivian loss per automobile | $139,277 | $124,162 | $67,329 | $32,594 | $30,500 | $43,372 | $38,784 | $32,705 | $39,130 |
The key UAW deal additionally reportedly helped Rivian safe its latest $6.6 billion conditional mortgage from the US Division of Vitality. The mortgage will assist fund Rivian’s new manufacturing plant in Georgia, the place it is going to construct its extra reasonably priced R2. Nevertheless, the mortgage can be based mostly on the EV maker reaching sure monetary metrics and different necessities.
Ramping EV manufacturing
Rivian builds its present R1S SUV and R1T electrical pickup in Regular with plans to start R2 manufacturing in 2026. Though the smaller, extra reasonably priced EV will initially be inbuilt IL, Rivian plans to considerably develop output with the brand new plant in GA.
The EV maker expects to construct between 47,000 and 49,000 autos this yr. After upgrading the ability earlier this yr, Rivian mentioned it could possibly construct as much as 150,000 EVs a yr in Regular.
When R2 launches in 2026, Rivian expects annual manufacturing capability to be round 215,000, 155,000 of which would be the R2. After its GA plant opens, Rivian expects so as to add one other 400,000 to that quantity.
In accordance with Bloomberg, Rivian has been “a longtime goal for the UAW.” If the deal goes via, employees in Regular would have extra say over issues similar to pay and dealing situations.
The UAW targetting Rivian is a part of its broader plans to unionize the EV trade. As extra particulars unfold, the deal might mark a big step in its efforts, doubtlessly setting Rivian other than rivals like Tesla.
Final month, Rivian and Volkswagen formally launched their new three way partnership, “Rivian and VW Group Expertise, LLC.” The partnership will use Rivian’s experience to develop a next-gen EV structure and “best-in-class software program” for each corporations’ future EV fashions.
Scaringe mentioned the collaboration is a “landmark improvement for the trade.” Volkswagen plans to take a position as much as $5.8 billion in Rivian and the brand new JV, which Scaringe calls “a significant monetary alternative.”
Rivian’s inventory is up round 33% since reporting Q3 earnings on November 7, however share costs are nonetheless down 37% in 2024.
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