Rivian (RIVN) has reportedly agreed to a “secret” cope with the UAW as it really works towards its subsequent development part. The brand new settlement is contingent on the EV maker reaching profitability. Right here’s what you must 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 line with sources near the matter (through Bloomberg), the deal relies on Rivian hitting particular targets, together with reaching profitability. The non-public settlement might pave the way in which for the UAW to unionize staff 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 remains 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 lowering prices after shutting down its Regular plant in April for upgrades.
| Q3 ’22 | This fall ’22 | Q1 ’23 | Q2 ’23 | Q3 ’23 | This fall ’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 current $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 should construct its extra inexpensive R2. Nevertheless, the mortgage can also be primarily based 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 inexpensive EV will initially be in-built IL, Rivian plans to considerably increase 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 might 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 line with Bloomberg, Rivian has been “a longtime goal for the UAW.” If the deal goes by way of, staff in Regular would have extra say over issues equivalent to pay and dealing circumstances.
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, probably setting Rivian other than rivals like Tesla.
Final month, Rivian and Volkswagen formally launched their new three way partnership, “Rivian and VW Group Know-how, LLC.” The partnership will use Rivian’s experience to develop a next-gen EV structure and “best-in-class software program” for each firms’ future EV fashions.
Scaringe mentioned the collaboration is a “landmark growth for the trade.” Volkswagen plans to speculate 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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