Rivian R2 SUVs at the manufacturer's assembly plant in Normal, Illinois. Photo by Scott Olson /Photographer: Scott Olson/Getty

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(Bloomberg) — Rivian Automotive Inc. reported better-than-expected earnings as it began deliveries of a new midsize sport-utility vehicle, a positive sign while the company contends with a weakened market for electric vehicles in the US.

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The adjusted loss before interest, taxes, depreciation and amortization was $379 million in the second quarter, down from a $667 million loss a year ago, Rivian said Thursday in a statement. The latest figure was smaller than the $548 million deficit anticipated on average in estimates compiled by Bloomberg. Its revenue also topped estimates.

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The company said Ebitda improved by $50 million at the midpoint of the quarter due to better-than-expected revenue from regulatory credits and increasing delivery volumes. But some of this improvement was offset by rising costs of raw material, memory and logistics. 

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The automaker is working to rein in costs and revamp production while rolling out its newest model, the lower-cost R2 line. Known primarily for its high-end consumer EVs and plug-in delivery vans used by Amazon.com Inc., Rivian is betting the new vehicles can help it capture greater share of the market for electric vehicles.

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The results come after Rivian earlier this month reported second-quarter vehicle sales that surpassed Wall Street’s estimates. At the same time, the company boosted its production outlook to 65,000 and 70,000 EVs this year, guidance that Rivian reaffirmed Thursday. Rivian credited its previous guidance update with a 3,000 vehicle delivery increase in early July.

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Revenue during the quarter was $1.66 billion, slightly above the preliminary figures Rivian released on July 6. Analysts estimated $1.52 billion on average.

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Through Thursday’s close, Rivian have dropped more than 14% year to date. 

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Rivian, one of the few remaining pure-play EV makers in the US, has been seeking stability this year following a tumultuous stretch marked by heavy costs, supply chain challenges and lukewarm EV demand in the US. The company has had multiple rounds of job cuts — including in June — as part of the effort to get a handle on costs.

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More-Affordable Model

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The R2 line, with an eventual target price of around $45,000, is aimed at pulling in more customers amid broad concerns about automotive affordability in the US. Initial variants cost around $58,000, but Rivian plans to bring the price down going forward.

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Chief Financial Officer Claire McDonough said in April that R2 deliveries, which started in June, would be weighted toward the back half of this year. She has also warned that the challenge of scaling the new vehicle would weigh on automotive gross profits in the second and third quarters.

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Production will eventually be supported by a massive new facility in Georgia, which Rivian said would have manufacturing capacity for 300,000 vehicles annually. Rivian this month sold shares to fund equity contributions related to a US Department of Energy loan that is helping fund the new plant.

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The company has also benefited from funding through strategic partners. Volkswagen, now Rivian’s largest shareholder, is expected to invest up to $5.8 billion over several years, and has already invested about $3 billion as part of a joint venture between the companies. Uber Technologies Inc. announced in March that it would invest as much as $1.25 billion through 2031 as the companies partner to deploy robotaxis.

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