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 it is advisable know.
What the non-public UAW deal means for Rivian
Beneath the confidential deal, Rivian would go for a impartial stance on unionizing efforts at its Regular, Illinois, manufacturing plant.
In keeping 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 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 achieve a optimistic gross revenue within the fourth quarter.
CEO RJ Scaringe stated the corporate is seeing “significant progress” on lowering 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 current $6.6 billion conditional mortgage from the US Division of Power. The mortgage will assist fund Rivian’s new manufacturing plant in Georgia, the place it can 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 broaden output with the brand new plant in GA.
The EV maker expects to construct between 47,000 and 49,000 autos this 12 months. After upgrading the ability earlier this 12 months, Rivian stated it will possibly construct as much as 150,000 EVs a 12 months 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 keeping with Bloomberg, Rivian has been “a longtime goal for the UAW.” If the deal goes by, staff in Regular would have extra say over issues corresponding to pay and dealing situations.
The UAW targetting Rivian is a part of its broader plans to unionize the EV business. 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 firms’ future EV fashions.
Scaringe stated the collaboration is a “landmark improvement for the business.” 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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