Earnings call · Rivian Thu Oct 29, Saidwire live coverage archive https://saidwire.com/archive/earnings-rivn-oct29 STORY (final version) Rivian Says R2 Conversion Beats Expectations, Plans Positive Auto Gross Profit by Year-End Executives said the lower-priced R2 SUV is outpacing internal forecasts on orders and test drives, even as memory and commodity costs squeeze margins. Rivian executives said on the company's third-quarter earnings call that they intend to exit the fourth quarter at an automotive gross profit but do not expect it for the full quarter, as the company ramps production of its lower-priced R2 SUV. They also said conversion of R2 test drives into orders on the premium launch trim has exceeded expectations, and that a cut to 2026 capital spending reflects timing shifts on its Georgia plant. R2 RAMP AND MARGINS Asked whether positive auto gross margin would cover the full fourth quarter, a Rivian finance executive said, "I wouldn't expect the full quarter, but it does set us up really well as we continue to ramp r2." The executive said total automotive gross profit, excluding regulatory credits, was positive on a cash basis in the third quarter and that the company expects that momentum to continue. The executive said a $120 million cost headwind reflects not yet running a full two-shift operation and includes costs such as expedited freight that are expected to fade. In the second quarter, the executive said, cost of goods sold per unit delivered fell about $12,000, driven largely by the introduction of the R2. Rivian's chief executive said the company is hunting offsets for higher commodity and memory prices that have emerged since R2 pricing was announced, including packaging and logistics changes, supplier cost reductions and part consolidation. The company is holding to its R2 price range of about $45,000 for the base trim to about $57,000 for the top trim. He said the most important near-term lever is better fixed-cost absorption through higher plant output, and that the ramp can proceed only "as fast as our slowest ramping supplier." DEMAND, R1 PRICING AND CAPITAL SPENDING The CEO said conversion on the R2 launch trim has beaten Rivian's assumptions and that test drives rose significantly sequentially with the R2 available. He said Rivian expects R1 average selling prices to rise after it dropped the standard trim to move the vehicle upmarket as a flagship, and that the R1 is not meant to be a high-volume product. On the capital spending cut to $1.4 billion to $1.5 billion for the year, the finance executive said it is "strictly" a timing matter, with large equipment purchases and contracts for the Georgia facility shifting by a few weeks between quarters. Executives said research and development spending should grow at a low double-digit rate from the third to the fourth quarter and grow more significantly in 2027 than in 2026, driven by autonomy software and hardware. They acknowledged some higher pricing for leased compute. AUTONOMY AND COMMERCIAL VANS The CEO said take rates for Autonomy Plus, a paid driver-assistance subscription, have exceeded expectations, though the company declined to give a figure. A point-to-point navigation feature enters early access in December, with a broader release across Autonomy Plus subscribers expected in 2027. He said the underlying large driving model also supports the planned 2028 robotaxi launch with Uber, and said Rivian completed its acquisition of Third Dimension, which strengthens its simulation work. On commercial vans, the CEO said Amazon has sharply stepped up demand this year and that Rivian is in discussions with other potential customers. He declined to address a report of a van wrapped with another retailer's branding. He said the first product from Rivian's joint venture with Volkswagen, the roughly 20,000-euro ID.1, launches next year in Europe. BULLETINS 5:01:46 PM ET RIVIAN: VP FINANCE DEREK MULVEY TO BE NAMED INTERIM CFO EFFECTIVE TOMORROW 5:03:10 PM ET RIVIAN CEO: R2 ALREADY BEST-SELLING VEHICLE BY VOLUME, OUTSELLING R1 AND EDV IN Q3 5:03:52 PM ET RIVIAN CEO: Q3 R1 AND R2 DEMO DRIVES TOPPED 103,000, SURPASSING Q2 RECORD 5:04:34 PM ET RIVIAN: AUTONOMY AND AI DAY SET FOR DECEMBER 9; SECOND R2 SHIFT HAS STARTED IN NORMAL 5:05:16 PM ET RIVIAN CEO: UBER MILESTONE ON TRACK BY YEAR-END, TO UNLOCK $250 MILLION MORE EQUITY INVESTMENT 5:05:58 PM ET RIVIAN: POINT-TO-POINT AUTONOMY LIMITED ROLLOUT LATER THIS YEAR; GENERAL RELEASE IN 2027 5:07:16 PM ET RIVIAN Q3 CONSOLIDATED REVENUE $2.155 BILLION 5:07:58 PM ET RIVIAN Q3 GROSS PROFIT $176 MILLION, GROSS MARGIN 8%; ADJUSTED EBITDA LOSS $435 MILLION 5:08:40 PM ET RIVIAN Q3 PRODUCTION 19,751 VEHICLES, DELIVERIES 19,248; AUTOMOTIVE REVENUE $1.55 BILLION 5:09:22 PM ET RIVIAN: Q3 AUTOMOTIVE GROSS LOSS $80 MILLION VS GROSS LOSS $130 MILLION YEAR AGO 5:10:04 PM ET RIVIAN: Q3 SOFTWARE AND SERVICES REVENUE $6.5 MILLION 5:11:34 PM ET RIVIAN: ENDED Q3 WITH ~$5.5 BILLION CASH; $1 BILLION VW TERM LOAN FUNDED OCT 7 AT 6% FIXED 5:12:16 PM ET RIVIAN RAISES FY DELIVERY GUIDANCE TO 67,000-70,000 UNITS FROM 65,000-70,000 5:12:58 PM ET RIVIAN: FY ADJ EBITDA LOSS SEEN $1.85B-$1.75B; MIDPOINT $100 MILLION IMPROVEMENT 5:13:40 PM ET RIVIAN: LOWERS 2026 CAPEX GUIDANCE BY $300 MILLION AT MIDPOINT TO $1.4B-$1.5B RANGE 5:16:52 PM ET RIVIAN CFO: INTENDS TO EXIT Q4 AT AUTOMOTIVE GROSS PROFIT; NOT EXPECTING FULL QUARTER POSITIVE 5:17:34 PM ET RIVIAN CFO: $120 MILLION OF INCREMENTAL COST OF REVENUES FROM R2 RAMP VS TWO-SHIFT RATE 5:18:16 PM ET RIVIAN CFO: Q3 AUTOMOTIVE GROSS PROFIT EX-REGULATORY CREDITS POSITIVE ON A CASH BASIS 5:19:46 PM ET RIVIAN CEO: R2 BASE TRIM STARTING AT $45,000, TOP SPEC TRIM ABOUT $57,000 5:23:58 PM ET RIVIAN CEO: AUTONOMY PLUS TAKE RATE HAS EXCEEDED EXPECTATIONS 5:27:52 PM ET RIVIAN CEO: FIRST VW JV OUTPUT, ID. ONE ABOUT 20,000 EURO EV FOR EUROPE, LAUNCHES NEXT YEAR 5:31:28 PM ET RIVIAN CEO: PLANNING FOR LEVEL FOUR AUTONOMY CAPABILITY IN 2028; POINT-TO-POINT FIRST STEP 5:32:52 PM ET RIVIAN CEO: COMPLETED ACQUISITION OF THIRD DIMENSION TO SUPPORT AUTONOMY SIMULATION WORK 5:34:16 PM ET RIVIAN: AUTONOMY EARLY ACCESS PROGRAM BEGINS IN DECEMBER; BROADER 2027 RELEASE EYED 5:36:22 PM ET RIVIAN CEO: UBER PARTNERSHIP ROBOTAXI DEPLOYMENT PLANNED FOR 2028 5:37:52 PM ET RIVIAN CFO: EXPECTS LOW DOUBLE DIGIT Q3-TO-Q4 R&D GROWTH; 2027 R&D TO GROW MORE THAN 2026 5:40:28 PM ET RIVIAN CFO: 2026 CAPEX CUT TO $1.4B-$1.5B, MOSTLY TIMING SHIFT IN GEORGIA FACILITY SPEND 5:41:52 PM ET RIVIAN: AMAZON VOLUME 'BIG STEP UP' THIS YEAR; TALKING TO OTHER COMMERCIAL VAN CUSTOMERS 5:49:22 PM ET RIVIAN CEO: R2 LAUNCH EDITION ORDER CONVERSION TO DATE HAS EXCEEDED EXPECTATIONS 5:51:34 PM ET RIVIAN: R2 LINEUP TO SPAN $45,000 TO $57,000 PRICE POINTS ACROSS TRIM, POWERTRAIN VARIANTS 5:56:22 PM ET RIVIAN: WON'T DISCLOSE AUTONOMY PLUS ATTACH RATE; EXPECTS HIGHER TAKE RATE WITH POINT-TO-POINT 5:59:16 PM ET RIVIAN: EXPECTS R1 AVERAGE SELLING PRICE TO GO UP; REMOVED STANDARD TRIM, MOVING UPMARKET POSTS (quotes verbatim; each shows when the words were said and when we drafted it) Rivian said on its Q3 earnings call Thursday that Derek Mulvey, vice president of finance, "will be named interim CFO effective tomorrow." Claire McDonough was introduced as the current CFO. said 5:01:15 PM ET · drafted 5:01:30 PM ET Rivian CEO RJ Scaringe said on the company's earnings call that the R2 "is already our best selling vehicle by volume," outselling both the R1 and the EDV in the third quarter. said 5:02:40 PM ET · drafted 5:03:34 PM ET Rivian CEO RJ Scaringe said "amazon continues to expand its fleet of electric delivery vans across north America." New variants include a larger battery pack offering 30% more range, he said. said 5:03:33 PM ET · drafted 5:04:28 PM ET "We remain on track and expect to achieve our next milestone by the end of this year." Rivian CEO RJ Scaringe, on the company's partnership with Uber. said 5:05:10 PM ET · drafted 5:05:14 PM ET Rivian CEO RJ Scaringe said the company expects to reach its next Uber partnership milestone by year's end, which "is expected to unlock an additional $52 million of equity investment from Uber." said 5:05:16 PM ET · drafted 5:06:15 PM ET Rivian said adjusted EBITDA losses for the third quarter were "$39 million," CFO Claire McDonough said on the call. Gross profit was $176 million, an 8% margin, she said. said 5:07:46 PM ET · drafted 5:08:41 PM ET "We recognized approximately $120 million in incremental cost of revenue due to the ramp of r2 production," Claire McDonough said on Rivian's third-quarter earnings call Thursday. said 5:09:27 PM ET · drafted 5:10:31 PM ET Rivian interim CFO Derek Mulvey said the company "ended the third quarter with approximately $5.5 billion in cash cash equivalents and short term investments." Rivian also cited a $1B VW loan at 6%. said 5:10:52 PM ET · drafted 5:11:35 PM ET Rivian interim CFO Derek Mulvey said the company now expects 2026 adjusted EBITDA losses of "between one point eight five and $1.75 billion." He said the midpoint is a $100 million improvement. said 5:12:33 PM ET · drafted 5:12:51 PM ET Rivian interim CFO Derek Mulvey said the company anticipates "the pace of our r and d investment in the strategic area to accelerate in the coming years" as it advances autonomy for consumer vehicles and robotaxis. said 5:12:57 PM ET · drafted 5:13:37 PM ET "We're lowering our 2026 capital expenditure guidance," Rivian interim CFO Derek Mulvey said Thursday, citing timing of certain spend. The cut is $300 million at the midpoint, to $1.4 billion to $1.5 billion. said 5:13:15 PM ET · drafted 5:14:45 PM ET Rivian says it is improving its full-year delivery guidance, raising the range to 67,000-70,000 units from 65,000-70,000. "We are improving our full year delivery guidance," it said on its earnings call. said 5:11:45 PM ET · drafted 5:15:48 PM ET Rivian said it intends to exit Q4 at a positive automotive gross profit but does not expect it for the full quarter. "I wouldn't expect the full quarter," an executive said Thursday on the earnings call. said 5:15:51 PM ET · drafted 5:16:56 PM ET Rivian said R2 saw "about a a $12,000 per unit step down in cost of goods sold per unit delivered" in the second quarter. The company said so in response to a UBS analyst on a $120 million ramp cost. said 5:17:40 PM ET · drafted 5:17:54 PM ET "Memory is a really important call out there," a Rivian executive said of commodity prices running higher than expected. Rivian is seeking offsets while holding R2 pricing at $45,000 to about $57,000. said 5:19:22 PM ET · drafted 5:19:59 PM ET "We can only ramp as fast as our slowest ramping supplier," a Rivian executive said on the earnings call, citing a smaller set of new tier one suppliers for the R2. said 5:21:45 PM ET · drafted 5:22:24 PM ET "Autonomy plus take rate on autonomy is on autonomy plus is exceeded our expectations and we're quite encouraged by it," a Rivian executive said of the company's Autonomy Plus driver-assistance software. said 5:23:25 PM ET · drafted 5:23:45 PM ET Rivian exec on point-to-point navigation in Autonomy Plus: "We think becomes even more important over the coming quarters and I would say years." The exec said only Tesla's FSD offers a comparable product. said 5:24:22 PM ET · drafted 5:25:01 PM ET A Rivian executive said Thursday, "this year we have seen a significant step up in the level of demand for amazon." The executive said other commercial operators are starting to look at the EDV. said 5:26:34 PM ET · drafted 5:28:12 PM ET A Rivian executive said the Volkswagen ID. 1 will be "the first real outcome output from the joint venture" and is "gonna be launching next year" on Rivian's Thursday earnings call. said 5:27:45 PM ET · drafted 5:29:20 PM ET Rivian executive says "to date autonomy has not been a major driver for most customers in the United States." He says Rivian is "at the base of a very significant inflection point," on its Oct. 29 earnings call. said 5:29:45 PM ET · drafted 5:30:37 PM ET Rivian said point to point is the first of multiple key steps toward "the level four capability that we're planning for for 2028," on the company's Oct. 29 earnings call. said 5:31:16 PM ET · drafted 5:31:39 PM ET Rivian said early access for point-to-point driving begins in December, with a full release "across all autonomy plus subscribers in the 2027 time frame," an executive said on its earnings call. said 5:34:28 PM ET · drafted 5:34:52 PM ET Rivian expects low double digit R&D growth from Q3 to Q4, an executive said on its earnings call. R&D will grow "more significantly" in 2027 than in 2026, citing autonomy and compute leasing prices. said 5:37:33 PM ET · drafted 5:39:08 PM ET Rivian said the reduction in its 2026 capex, now $1.4 billion to $1.5 billion, is "mostly driven by timing," citing a shift in spend tied to its Georgia facility, on its Oct. 29 earnings call. said 5:40:21 PM ET · drafted 5:40:29 PM ET Rivian executive on Walmart-badged van report: "We continue to have discussions with customers outside of amazon." Said this year "represented a big step up in volume" with Amazon. said 5:41:27 PM ET · drafted 5:41:48 PM ET Rivian on its Third Dimension acquisition: "Third dimension acquisition was something we're really excited about it bolsters our simulation efforts." It said simulation validation is becoming more important. said 5:42:34 PM ET · drafted 5:43:16 PM ET Rivian executive said R2 pricing starts at $45,000 and runs through the mid to high $50,000s, on its Oct. 29 earnings call. R1's price "made it not something that many customers would be considering," he said. said 5:44:21 PM ET · drafted 5:44:29 PM ET Rivian exec on rolling out its large driving model across R2s and model year 2025-or-newer R1s: "Point to point is gonna be available on all those vehicles." He spoke to an analyst on the earnings call. said 5:47:23 PM ET · drafted 5:47:37 PM ET A Rivian executive said the lidar-equipped R2 variant, now in an employee program and validation builds this year, will be available "into 2027." He answered an analyst's question on timing. said 5:47:51 PM ET · drafted 5:48:46 PM ET Rivian executive on R2 launch edition: "The conversion to date has exceeded our expectations." The executive said the launch variant is the most expensive R2 and that test drives rose significantly after R2 became available. said 5:48:57 PM ET · drafted 5:50:13 PM ET Rivian executive on R2 margins: fixed costs are absorbed as volume grows, which "supports a healthy positive gross margin for the r2 business." said 5:52:10 PM ET · drafted 5:52:53 PM ET Rivian executive, asked on the earnings call whether its autonomy attach rate is near Tesla's: "We're not giving the attach rate maybe someday we will but we're not giving it here." said 5:55:33 PM ET · drafted 5:55:44 PM ET Rivian executive on autonomy and the auto industry: "It could drive huge changes in market share shifting between different companies." He said how the technology is priced will be "dynamic." said 5:56:27 PM ET · drafted 5:56:59 PM ET Rivian said it expects average selling price for the R1 "to to go up a bit," adding it removed the standard trim and moved the SUV "upmarket" as a flagship, answering an analyst on Thursday's earnings call. said 5:58:45 PM ET · drafted 6:00:27 PM ET Rivian executive on the R1 at the earnings call: "Its objective is not to be a high volume product." He said it is not competing in the lower-priced segment of two- or three-row vehicles. The call has ended. said 5:59:51 PM ET · drafted 6:02:40 PM ET TRANSCRIPT (copy-edited; times Eastern) [4:52:46 PM ET] How do you do? [5:00:52 PM ET] Good afternoon. [5:00:58 PM ET] and thank you for joining us for Rivian's third quarter 2026 earnings call. Today I'm joined by R.J. Scarret. [5:00:58 PM ET] good afternoon and thank you for joining us for rivian's [5:01:04 PM ET] Skiringe, our founder and CEO, Claire McDonough, our Chief Financial Officer, and Javier Varella, our Chief Operations. [5:01:04 PM ET] third quarter twenty twenty six earnings call today i'm joined by rj skarinj our [5:01:04 PM ET] founder and ceo claire mcdonough our chief financial officer javier [5:01:10 PM ET] Operations Officer, and Derek Mulvey, our Vice President of Finance, who will be named interim CFO effective tomorrow. [5:01:10 PM ET] varela our chief operations officer and derek mulvey our vice president of finance [5:01:16 PM ET] tomorrow. Before we begin, matters discussed on this call, including comments and responses to questions. [5:01:16 PM ET] who will be named interim cfo effective tomorrow [5:01:16 PM ET] before we begin matters discussed on this [5:01:22 PM ET] questions, reflect management's views as of today. We will also be making statements related to our. [5:01:22 PM ET] call including comments and responses to questions reflect management's views as of [5:01:22 PM ET] today [5:01:28 PM ET] our business, operations, and financial performance that may be considered forward-looking statements under Federal Securities. [5:01:28 PM ET] we will also be making statements related to our business [5:01:34 PM ET] securities law. Such statements involve risks and uncertainties that could cause actual results to differ materially. [5:01:34 PM ET] operations and financial performance that may be considered forward looking statements under federal [5:01:34 PM ET] securities law [5:01:34 PM ET] such statements involve risks and uncertainties that could cause actual results [5:01:40 PM ET] materially. These risks and uncertainties are described in our SEC filings and the presentation we filed. [5:01:40 PM ET] to differ materially [5:01:46 PM ET] with the SEC today. During this call, we will discuss both GAAP and non-GAP financial measures. [5:01:46 PM ET] these risks and uncertainties are described in our sec filings and the presentation we [5:01:46 PM ET] filed with the sec today [5:01:52 PM ET] measures. A reconciliation of historical non-GAP to GAAP financial measures is provided in our earnings presentation. [5:01:52 PM ET] during this call will discuss both gaap and non gaap financial [5:01:52 PM ET] measures a reconciliation of historical non gaap to gaap financial measures is [5:01:58 PM ET] and press release. Just before the earnings call, we posted our earnings presentation, which includes an overview. [5:01:58 PM ET] provided in our earnings presentation and press release just before the earnings call [5:02:04 PM ET] overview of our progress over the recent months. I encourage you to read it for additional details around some of the items that. [5:02:04 PM ET] we posted our earnings presentation includes an overview of our progress over the recent months [5:02:10 PM ET] that we will cover on today's call. Following our prepared remarks, we'll be taking questions from cell site analysts. [5:02:10 PM ET] i encourage you to read it for additional details around some of the items that we will cover on [5:02:10 PM ET] today's call [5:02:16 PM ET] analysts. In the interest of keeping the call to one hour, we would ask these analysts to limit any follow-on questions to one. [5:02:16 PM ET] following our prepared remarks we'll be taking questions from sell side analysts [5:02:16 PM ET] in the interest of keeping the call to one hour we would [5:02:22 PM ET] to one. With that, I'll turn the call over to RJ. Thanks, Chip. Good afternoon, everyone, and thank you for. [5:02:22 PM ET] these analysts to limit any follow on questions to one [5:02:22 PM ET] with that i'll turn the call over to rj [5:02:28 PM ET] for joining us for today's call. We had a great third quarter. We achieved record production volumes and normal as we [5:02:28 PM ET] thanks chip good afternoon and thank you for joining us [5:02:28 PM ET] for today's call [5:02:34 PM ET] continued to ramp R2 manufacturing. We also had record deliveries with R2 delivering much of that gain. [5:02:34 PM ET] had a great third quarter we achieved record production volumes in normal as we continue [5:02:34 PM ET] to ramp r2 manufacturing we also had record deliveries [5:02:34 PM ET] with r2 delivering much of that gain [5:02:40 PM ET] In fact, R2 is already our best-selling vehicle by volume, outselling both R1 and EDV in the third quarter. [5:02:40 PM ET] in fact r2 is already our best selling vehicle by volume [5:02:40 PM ET] outselling both r1 and edv in the third quarter [5:02:46 PM ET] I'm proud of how our team has come together to scale our manufacturing, sales, and service operations. We are also advised. [5:02:46 PM ET] i'm proud of how our team has come together to scale our manufacturing sales and service operations [5:02:52 PM ET] advancing our technology roadmap, and I look forward to showcasing that progress at our Autonomy and AI Day on December 9th. [5:02:52 PM ET] we are also advancing our technology road map and i look [5:02:58 PM ET] 9th. Since its launch in June, we've seen all types of potential customers take R2 for a drive. The feedback [5:02:58 PM ET] forward to showcasing that progress at our autonomy and ai day on december ninth [5:02:58 PM ET] since its launch in june we've seen all types of potential customers take r two for a drive [5:03:04 PM ET] feedback on R2 has been outstanding. In the third quarter, we hosted over 103,000 R1 and R2 demo drives. [5:03:04 PM ET] the feedback on r two is now outstanding [5:03:10 PM ET] drives, surpassing the record we set in the second quarter. Reservation conversion rates for the launch edition. [5:03:10 PM ET] in the third quarter we hosted over one hundred and three thousand r1 and r2 demo drives [5:03:10 PM ET] surpassing the record we set in the second quarter [5:03:16 PM ET] edition R2 remained higher in the quarter than our expectations. We are really excited for the launch of additional. [5:03:16 PM ET] reservation conversion rates have for the launch edition r2 remained higher [5:03:16 PM ET] in the quarter than our expectations [5:03:22 PM ET] variants in the coming months. R2 continues to generate rave reviews and awards from media. [5:03:22 PM ET] we are really excited for the launch of additional variants in the coming months [5:03:22 PM ET] r two continues to generate rave reviews and awards from media [5:03:28 PM ET] and recently won Top Gear's SUV of the Year Award for 2027, with more awards to come. [5:03:28 PM ET] and recently won top gear's suv of the year award for twenty twenty seven [5:03:28 PM ET] with more awards to come [5:03:34 PM ET] Amazon continues to expand its fleet of electric delivery vans across North America. Early this month, [5:03:34 PM ET] amazon continues to expand its fleet of electric delivery vans across north america [5:03:40 PM ET] month, we began delivering new variants that are specifically designed to expand route coverage into more rural networks. [5:03:40 PM ET] earlier this month we began delivering new variants that are specifically designed to [5:03:46 PM ET] including an all-wheel drive configuration, as well as a larger battery pack that offers 30% more range. [5:03:46 PM ET] expand route coverage into more rural networks including an all wheel drive configuration [5:03:46 PM ET] as well as a larger battery pack that offers thirty percent [5:03:46 PM ET] more range [5:03:52 PM ET] Turning to our manufacturing operations, our team in Normal continues to ramp our two production. The second [5:03:52 PM ET] turning to our manufacturing operations our team in normal continues to ramp our two [5:03:52 PM ET] production [5:03:58 PM ET] second R2 shift has started, and we expect our manufacturing run rate to increase over the coming quarters. [5:03:58 PM ET] the second r two shift has started and we [5:03:58 PM ET] expect our manufacturing run rate to increase over the coming quarters [5:04:04 PM ET] Georgia, construction of our next manufacturing site is progressing well. Regarding our technology roadmap. [5:04:04 PM ET] in georgia construction of our next manufacturing site is progressing well [5:04:10 PM ET] roadmap, autonomy remains one of the most important areas of investment at Rivian. We continue to see strong momentum in our autonomy. [5:04:10 PM ET] regarding our technology road map autonomy remains one of the most important areas of [5:04:10 PM ET] investment at rivian [5:04:16 PM ET] Autonomy Plus offering available on every R2 and R1 starting with the 2025 model year. [5:04:16 PM ET] we continue to see strong momentum in our autonomy plus offering [5:04:16 PM ET] available on every r2 and r1 starting with the twenty twenty five model year [5:04:22 PM ET] rates trending ahead of our expectations. Today, every vehicle with Autonomy Plus is capable of hands-free driving. [5:04:22 PM ET] with take rates trending ahead of our expectations [5:04:28 PM ET] driving on millions of miles of roads. Our next milestone is our point-to-point feature. This means [5:04:28 PM ET] today every vehicle with autonomy plus is capable of hands free driving on millions of miles of roads [5:04:28 PM ET] our next milestone is our point to point feature [5:04:34 PM ET] customers can enter an address and their vehicle will follow the route from start to finish, handling city streets. [5:04:34 PM ET] this means customers can enter an address and their vehicle will follow the route [5:04:34 PM ET] from start to finish [5:04:40 PM ET] stoplights, highway interchanges, and everything in between with driver supervision. [5:04:40 PM ET] handling city streets stoplights highway interchanges [5:04:40 PM ET] and everything in between with driver supervision [5:04:46 PM ET] limited rollout of point-to-point is expected to begin later this year with our invitation-only autonomy or [5:04:46 PM ET] a limited rollout of point to point is expected to begin later this year [5:04:52 PM ET] Early Access Program with a general release to all Autonomy Plus subscribers in 2027. [5:04:52 PM ET] with our invitation only autonomy early access program [5:04:52 PM ET] with a generally released to all autonomy plus subscribers in twenty twenty seven [5:04:58 PM ET] We believe point-to-point capabilities are going to be an important purchase criteria for customers and is becoming a [5:04:58 PM ET] we believe point to point capabilities are going to be an important purchase criteria for customers [5:05:04 PM ET] becoming a driver of market share. We continue to make progress on our partnership with Uber. We remain on track and [5:05:04 PM ET] and is becoming a a driver of market share [5:05:04 PM ET] we continue to make progress on our partnership with uber [5:05:10 PM ET] expect to achieve our next milestone by the end of this year, which is expected to unlock an additional $250. [5:05:10 PM ET] we remain on track and expect to achieve our next milestone by the end of this year [5:05:16 PM ET] $250 million of equity investment from Uber. Additionally, last week we announced the acquisition [5:05:16 PM ET] which is expected to unlock an additional two fifty million [5:05:16 PM ET] dollars of equity investment from uber [5:05:16 PM ET] additionally last week we announced [5:05:22 PM ET] acquisition of third-dimensional AI to support our autonomy development and our associated closed-loop simulation efforts. [5:05:22 PM ET] the acquisition of third dimension ai to support our autonomy [5:05:28 PM ET] efforts. With the Rivian Assistant, we have developed a smarter, more customizable AI-defined vehicle experience. [5:05:28 PM ET] and our associated closed loop simulation efforts [5:05:28 PM ET] with the rivian assistant we have developed a smarter more customizable ai defined [5:05:34 PM ET] experience for all R1 and R2 owners. In our October OTA, we added Gmail integration. [5:05:34 PM ET] experience [5:05:34 PM ET] for all r one and r two owners [5:05:40 PM ET] Trivian Assistant, and we look forward to sharing more at our upcoming Autonomy and AI day. [5:05:40 PM ET] in our october ota we added gmail integration [5:05:40 PM ET] trivium assistant and we look forward to sharing more at our upcoming autonomy and ai [5:05:40 PM ET] day [5:05:46 PM ET] up our vehicles for Halloween is a highlight to our customers every year. This October, we collaborated with Sony Pictures. [5:05:46 PM ET] dressing up our vehicles for halloween is a highlight to our customers every year [5:05:52 PM ET] Pictures and Bill Murray to bring the Ghostbusters universe to life on Rivian vehicles with Halloween mode. [5:05:52 PM ET] this october we collaborated with sony pictures and bill murray [5:05:52 PM ET] to bring the ghostbusters universe to life [5:05:58 PM ET] mode. This is a perfect demonstration of how the level of deep vertical integration across hardware and software. [5:05:58 PM ET] on rivian vehicles with halloween mode [5:05:58 PM ET] this is a perfect demonstration of how the level of deep vertical integration [5:06:04 PM ET] software allows us to release immersive features to our customers at speed. Finally, I want to take [5:06:04 PM ET] across hardware and software allows us to release immersive [5:06:04 PM ET] features to our customers at speed [5:06:10 PM ET] take a moment to thank Clara for all of her contributions at Rivian over the last six years. On a personal level, Clara has [5:06:10 PM ET] finally i wanna take a moment to thank clarify [5:06:10 PM ET] for all of her contributions at rivian over the last six years [5:06:16 PM ET] has been an incredible partner and friend throughout this journey. I know I speak for the whole team when I say we wish you nothing but the best. [5:06:16 PM ET] on a personal level clara has been an incredible partner and friend throughout this journey [5:06:22 PM ET] best in your next chapter. I'm also excited to work with Derek as he steps into the interim CFO role. [5:06:22 PM ET] i know i speak for the whole team when i say we wish you nothing but the best in your next chapter [5:06:22 PM ET] i'm also excited to work with derek as he steps into the interim cfo role [5:06:28 PM ET] In closing, I want to thank our team for their continued execution in the third quarter. We are laying the foundations for a future that we. [5:06:28 PM ET] in closing i wanna thank our team for their continued execution in the third quarter [5:06:34 PM ET] believe will be fully electric, autonomous and AI-defined. I could not be more excited about the opportunity ahead for Rivian. [5:06:34 PM ET] we're laying the foundations for a future that we believe will be fully electric autonomous and ai [5:06:34 PM ET] defined [5:06:34 PM ET] i could not be more excited about the opportunity ahead for rivian [5:06:40 PM ET] With that, I'll turn the call over to Claire to cover our third quarter results. Thank you. [5:06:40 PM ET] with that i'll turn the call over to claire [5:06:40 PM ET] to cover our third quarter results [5:06:46 PM ET] RJ, and good afternoon, everyone. As many of you saw last month, I decided to step down as Rivian's CFO. [5:06:46 PM ET] thank you rj and good afternoon everyone [5:06:52 PM ET] CFO to head back to the East Coast to be closer to my family and pursue a new opportunity. It has been the highlight. [5:06:52 PM ET] as many of you saw last month i decided to step down as rivian's cfo to head back to the [5:06:52 PM ET] east coast to be closer to my family and pursue a new opportunity [5:06:58 PM ET] highlight of my career to help build Rivian's financial foundation alongside RJ and our teams, and I'm [5:06:58 PM ET] it has been the highlight of my career to help build rivian's financial foundation along [5:07:04 PM ET] stepping away with complete confidence in this company's trajectory, its mission, and the strength of the team. [5:07:04 PM ET] and our teams and i'm stepping away with complete confidence [5:07:10 PM ET] team that will carry it forward. Turning through the results of the third quarter, our consolidated revenue. [5:07:10 PM ET] in this company's trajectory its mission and the strength of the team that will [5:07:10 PM ET] carry it forward [5:07:10 PM ET] turning to the results of the third quarter [5:07:16 PM ET] revenue was $2.155 billion, a 38% increase over the [5:07:16 PM ET] our consolidated revenue was two point one five five billion dollars [5:07:22 PM ET] same quarter last year. Consolidated gross profit was $176 million. [5:07:22 PM ET] a thirty eight percent increase over the same quarter last year [5:07:28 PM ET] and our gross profit margin was 8%. Gross profit included $166 million. [5:07:28 PM ET] consolidated gross profit was one hundred [5:07:28 PM ET] seventy six million dollars and our gross profit margin was eight percent [5:07:34 PM ET] $166 million of depreciation and amortization and $28 million of stock. [5:07:34 PM ET] gross profit included one hundred and sixty [5:07:34 PM ET] six million dollars of depreciation and amortization and [5:07:40 PM ET] stock-based compensation expense. Adjusted EBITDA losses for the third quarter were $430. [5:07:40 PM ET] twenty eight million dollars of stock based compensation expense [5:07:46 PM ET] $435 million, driven by our $176 million of gross profit. [5:07:46 PM ET] adjusted ebitda losses for the third quarter were four [5:07:46 PM ET] thirty five million dollars [5:07:52 PM ET] profit and increased adjusted operating expenses as we scale our sales, marketing, and service operations. [5:07:52 PM ET] driven by our one hundred and seventy six million dollars of gross profit [5:07:52 PM ET] and increased adjusted operating expenses as we scale our sales [5:07:58 PM ET] operations to support our two volumes and invest in our autonomy roadmap. In the third quarter, [5:07:58 PM ET] marketing and service operations to support our two volumes and invest in [5:07:58 PM ET] autonomy road map [5:08:04 PM ET] we produced 19,751 vehicles at our plant in Normal, Illinois. [5:08:04 PM ET] in the third quarter we produced [5:08:10 PM ET] and delivered 19,248 vehicles. Production and delivery results. [5:08:10 PM ET] nineteen thousand seven hundred and fifty one vehicles at our plant in normal illinois [5:08:10 PM ET] and delivered nineteen thousand two hundred and forty eight vehicles [5:08:16 PM ET] for the quarter were in line with our expectations, with R2 becoming our best selling vehicle by volume [5:08:16 PM ET] production and delivery results for the quarter were in line with [5:08:22 PM ET] volume in the third quarter. Our $1.55 billion of automotive revenue. [5:08:22 PM ET] our expectations with r2 becoming our best selling vehicle by volume in [5:08:22 PM ET] the third quarter [5:08:22 PM ET] our one point five five billion dollars of automotive revenue [5:08:28 PM ET] a 36% increase over the same quarter last year, were primarily driven by a 46% increase. [5:08:28 PM ET] a thirty six percent increase over the same quarter last year [5:08:34 PM ET] increase in vehicle deliveries and $81 million of regulatory credits. [5:08:34 PM ET] were primarily driven by a forty six percent increase [5:08:34 PM ET] in vehicle deliveries and eighty one million dollars of regulatory credits [5:08:40 PM ET] partially offset by a decline in average selling prices from a higher mix of R2 and commercial value. [5:08:40 PM ET] partially offset by a decline in average selling prices [5:08:46 PM ET] van deliveries, while R1 average selling prices increased due to mix improvements. [5:08:46 PM ET] from a higher mix of r2 and commercial van deliveries [5:08:46 PM ET] while r1 average selling prices increased [5:08:46 PM ET] due to mix improvements [5:08:52 PM ET] automotive gross profit loss was $80 million compared to gross profit loss of [5:08:52 PM ET] automotive gross profit loss was eighty million dollars compared [5:08:58 PM ET] $130 million in the same quarter last year, a $50 million improvement. [5:08:58 PM ET] to gross profit loss of one hundred and thirty million dollars in the same quarter [5:09:04 PM ET] improvement due primarily to increases in delivery volumes at an improved per-unit margin. [5:09:04 PM ET] last year a fifty million dollars improvement [5:09:04 PM ET] due primarily to increases in delivery volumes at an improved [5:09:10 PM ET] an increase in revenues related to automotive regulatory credits, and an IEPA tariff refund. [5:09:10 PM ET] per unit margin and increase in revenues [5:09:16 PM ET] receivable, partially offset by costs related to the ramp of R2 production. [5:09:16 PM ET] related to automotive regulatory credits and an ie [5:09:16 PM ET] tariff refund receivable [5:09:16 PM ET] partially offset by costs related to the ramp of r two production [5:09:22 PM ET] the quarter, we recognized approximately $120 million in incremental cost of revenue. [5:09:22 PM ET] in the quarter we recognized approximately [5:09:28 PM ET] revenue due to the ramp of R2 production as compared to production at more normalized levels. [5:09:28 PM ET] one hundred and twenty million dollars in incremental cost of revenue [5:09:28 PM ET] due to the ramp of r2 production as compared to production at more [5:09:28 PM ET] normalized levels [5:09:34 PM ET] levels. While current macro and geopolitical factors are creating added complexity, cost, [5:09:34 PM ET] while current macro and geopolitical [5:09:34 PM ET] factors are creating added complexity [5:09:40 PM ET] and uncertainty, our team continues to work hard to manage supply chain risks and increasing. [5:09:40 PM ET] cost and uncertainty our team continues to work hard to manage supply [5:09:46 PM ET] commodity and memory costs. Our software and services segment reported another strong. [5:09:46 PM ET] chain risks and increasing commodity and memory costs [5:09:52 PM ET] quarter. During the third quarter, the segment generated $605 million of revenue. [5:09:52 PM ET] our software and services segment reported another strong quarter [5:09:52 PM ET] during the third quarter the segment generated six [5:09:58 PM ET] revenue, a 45% year-over-year increase, primarily due to increases in vehicle electricity. [5:09:58 PM ET] five million dollars of revenue [5:09:58 PM ET] a forty five percent year over year increase [5:10:04 PM ET] electrical architecture and software development services by the joint venture, vehicle repair. [5:10:04 PM ET] primarily due to increases in vehicle electrical [5:10:04 PM ET] and software development services by the joint venture [5:10:10 PM ET] and maintenance services, and Autonomy Plus, offset by lower remarketing sales. [5:10:10 PM ET] vehicle repair and maintenance services and autonomy plus [5:10:10 PM ET] offset by lower remarketing sales [5:10:16 PM ET] sales. $354 million, or approximately 60%, of software and service. [5:10:16 PM ET] three hundred and fifty four million dollars or approximately [5:10:22 PM ET] services revenue was attributable to our joint venture with Volkswagen Group. Software and services growth. [5:10:22 PM ET] sixty percent of software and services revenue was attributable to our joint venture [5:10:22 PM ET] venture with volkswagen group [5:10:28 PM ET] gross profit was $256 million, a 42% margin, due to [5:10:28 PM ET] software and services gross profit was two fifty six million dollars [5:10:28 PM ET] a forty two percent margin [5:10:34 PM ET] better than expected mix of revenues from more profitable revenue streams. With that, I'll hand [5:10:34 PM ET] due to better than expected mix of revenues from more profitable revenue streams [5:10:40 PM ET] hand the call over to Derek to walk through our business outlook and capital roadmap. Thanks, Claire. [5:10:40 PM ET] with that i'll hand the call over to derek to walk through our business outlook [5:10:40 PM ET] and capital road map [5:10:46 PM ET] Claire. It's been a privilege to work alongside you, and I'm excited to step into the interim CFO role and build on the foundation you've established. [5:10:46 PM ET] thanks claire it's been a privilege to work alongside you and i'm [5:10:52 PM ET] established. Turning to our liquidity and balance sheet, we ended the third quarter with approximately $5.5 billion in cash. [5:10:52 PM ET] excited to step into the interim cfo role and build on the foundation you've established [5:10:52 PM ET] turning to our liquidity and balance sheet we ended the third quarter with approximately five point five billion [5:10:58 PM ET] cash, cash equivalents, and short-term investments. In addition to this balance, on October 7th, we announced the funding. [5:10:58 PM ET] dollars in cash cash equivalents and short term investments [5:11:04 PM ET] funding of our $1 billion 10-year term loan facility with Volkswagen Group at a fixed interest rate of 6%. [5:11:04 PM ET] addition to this balance on october seventh we announced the funding of our one billion dollars [5:11:04 PM ET] ten year term loan facility with volkswagen group at a fixed interest rate of six percent [5:11:10 PM ET] To date, we have received $5.3 of the $5.8 billion in expected capital commitments associated with the joint venture. [5:11:10 PM ET] to date we've received five point three billion of the five point eight billion [5:11:16 PM ET] venture with the remaining $460 million anticipated in late 2027. [5:11:16 PM ET] in expected capital commitments associated with the joint venture [5:11:16 PM ET] with the remaining four sixty million dollars anticipated in late twenty twenty seven [5:11:22 PM ET] Additionally, we expect to achieve our second milestone under the Uber partnership later this year, which would trigger an additional $250 million. [5:11:22 PM ET] additionally we expect to achieve our second milestone under the uber partnership [5:11:28 PM ET] million equity investment. When factoring in our current liquidity, expected capital from Uber, Vols. [5:11:28 PM ET] later this year which will trigger an additional two fifty million dollars equity investment [5:11:28 PM ET] when factoring in our current liquidity expected capital from uber [5:11:34 PM ET] Volkswagen, and our Department of Energy loan, all of which are subject to certain conditions, our total available liquidity and [5:11:34 PM ET] volkswagen and our department of energy loan [5:11:40 PM ET] targeted future capital would be approximately $13 billion. Turning to our outlook, we are improving our [5:11:40 PM ET] all of which are subject to certain conditions our total available [5:11:40 PM ET] liquidity and targeted future capital would be approximately thirteen billion dollars [5:11:46 PM ET] full-year delivery guidance from 65 to 70,000 units to 67 to 70,000 units. [5:11:46 PM ET] turning to our outlook we are improving our full year delivery guidance [5:11:52 PM ET] its first full quarter of sales, R2 outsold R1 and our commercial vans, and in the fourth quarter, we expect R2 to [5:11:52 PM ET] sixty five thousand to seventy thousand units to sixty seven thousand to seventy thousand units [5:11:52 PM ET] in its first full quarter of sales r two outsold r one and our commercial vans and [5:11:58 PM ET] to represent the majority of our total delivery volume. We are making significant strides to drive down our automotive cost. [5:11:58 PM ET] the fourth quarter we expect r2 to represent the majority of our total delivery volume [5:12:04 PM ET] cost per unit, and we're already seeing the benefit of introducing R2 into our normal production facility. While new vehicles. [5:12:04 PM ET] are making significant strides to drive down our automotive cost per unit [5:12:04 PM ET] we're already seeing the benefit of introducing r2 into our normal production facility [5:12:10 PM ET] vehicle launch complexities, in addition to rising costs of core components, have, and we anticipate, will continue to impact our profitability. [5:12:10 PM ET] new vehicle launch complexities in addition to rising costs of core components have and [5:12:16 PM ET] profitability. We expect that R2 will help us achieve a positive automotive gross margin exit rate for the year. [5:12:16 PM ET] anticipate will continue to impact our profitability [5:12:16 PM ET] expect that r2 will help us achieve a positive automotive gross margin exit rate for the year [5:12:22 PM ET] This would establish a strong foundation for continued margin expansion as R2 ramps through 2027. [5:12:22 PM ET] this would establish a strong foundation for continued margin expansion as r2 [5:12:28 PM ET] full year 2026, we now expect our adjusted EBITDA losses to be between 1.85 and 1.75. [5:12:28 PM ET] ramps through twenty twenty seven for full year twenty twenty six [5:12:34 PM ET] $1.75 billion. At the midpoint, this represents a $100 million improvement driven by favorable regulatory credit rates. [5:12:34 PM ET] we now expect our adjusted ebitda losses to be between one point eight five [5:12:34 PM ET] and one point seven five billion dollars [5:12:34 PM ET] at the midpoint this represents one hundred million dollars improvement [5:12:40 PM ET] credit revenue, an IEPA tariff receivable, and our expected increased delivery volume. [5:12:40 PM ET] driven by favorable regulatory credit revenue and our ebitdaaf receivable [5:12:40 PM ET] our expected increased delivery volume [5:12:46 PM ET] RJ outlined, we are making rapid progress in our autonomy roadmap and are excited to launch our point-to-point feature on a limited basis. [5:12:46 PM ET] as rj outlined we are making rapid progress in our autonomy road map [5:12:52 PM ET] basis later this year. We anticipate the pace of our RD investment in the strategic area to accelerate in the coming years. [5:12:52 PM ET] are excited to launch our point to point feature on a limited basis later this year [5:12:58 PM ET] coming years as we advance our large driving model and progress advanced autonomy development across our consumer vehicles. [5:12:58 PM ET] we anticipate the pace of our r and d investment in the strategic area to accelerate in the coming years [5:12:58 PM ET] as we advance our large driving model and progress [5:13:04 PM ET] robo-taxi applications. We believe autonomy is a primary product differentiator, market share driver. [5:13:04 PM ET] advanced autonomy development across our consumer vehicles and robotaxi applications [5:13:04 PM ET] we believe autonomy is a primary product differentiator [5:13:10 PM ET] and long-term value creator. Finally, we're lowering our 2026 capital expenditure guidance. [5:13:10 PM ET] market share driver and long term value creator [5:13:16 PM ET] guidance by $300 million at the midpoint due to a shift in timing of certain capital spend. This brings a revised 2026. [5:13:16 PM ET] finally we're lowering our twenty twenty six capital expenditure guidance [5:13:16 PM ET] three hundred million dollars at the midpoint [5:13:16 PM ET] due to a shift in timing of certain capital spend [5:13:22 PM ET] 2026 CapEx range to $1.4 to $1.5 billion. Looking ahead to 2027, we expect [5:13:22 PM ET] this brings our revised twenty twenty six capex range to one point four [5:13:28 PM ET] a meaningful year-over-year step-up in CapEx as construction activity ramps in our Georgia manufacturing facility. [5:13:28 PM ET] one point five billion dollars looking ahead to twenty twenty seven [5:13:28 PM ET] we expect a meaningful year over year step up in capex as construction activity [5:13:28 PM ET] ramps in our georgia manufacturing facility [5:13:34 PM ET] closing, I'd like to thank our teams across the company for their execution in the third quarter. We remain confident that R2 and R2. [5:13:34 PM ET] in closing i'd like to thank our teams across the company for their execution of the third quarter [5:13:40 PM ET] technology roadmap will be truly transformative for the growth and profitability of our business. With that, I'd like to turn the call back. [5:13:40 PM ET] we remain confident that r2 and our technology road map will be [5:13:46 PM ET] back over to the operator to open the line for QA. Thank you. [5:13:46 PM ET] truly transformative for the growth and profitability of our business with that i'd like to turn the call back [5:13:46 PM ET] over to the operator to open the line for q and a [5:13:52 PM ET] For the Q A section of today's session, we will be utilizing the raise hand feature. [5:13:52 PM ET] thank you for the q and a section of today's session [5:13:58 PM ET] would like to ask a question, click on the raise hand button at the bottom of the screen. Once prompted, [5:13:58 PM ET] we will be utilizing the raise hand feature if you would like [5:13:58 PM ET] ask a question click on the raise hand button at the bottom of the screen [5:14:04 PM ET] prompted, please unmute yourself and begin with your question. We will now pause for a moment to assemble the queue. [5:14:04 PM ET] once prompted please unmute yourself and begin with your question [5:14:10 PM ET] queue. Thank you. Our first question comes from. [5:14:10 PM ET] we will now pause for a moment to assemble the queue [5:14:10 PM ET] thank you [5:14:16 PM ET] our first [5:14:16 PM ET] question comes from george janarikas with canaccord genuity [5:14:16 PM ET] please unmute yourself and ask a question [5:14:22 PM ET] hi everyone [5:14:28 PM ET] you so much for taking my questions i just wanna [5:14:28 PM ET] ask first on autonomy how [5:14:34 PM ET] leverageable is your platform to the commercial vehicles over time [5:14:34 PM ET] thank you [5:14:40 PM ET] hi george the the timing platform is [5:14:40 PM ET] is being built around what we call our large driving model and so large drive model [5:14:46 PM ET] is a is a foundation model it's a large parameter model that we're training [5:14:52 PM ET] and it's very adaptable to different vehicle form factors and applications and so that's [5:14:52 PM ET] inclusive of r one r two [5:14:58 PM ET] and of course our commercial vehicles and so [5:15:04 PM ET] we think about the autonomy road map and different ways that we can [5:15:04 PM ET] use this to benefit the business it of course has implications on our consumer business [5:15:04 PM ET] with the [5:15:10 PM ET] big milestone coming up with our point to point features [5:15:16 PM ET] but it also has applications in robotaxi of course is is part of our [5:15:16 PM ET] partnership with uber with the twenty twenty eight launch for that [5:15:22 PM ET] and then there's a a number of applications in the commercial space [5:15:22 PM ET] as part of our advanced program [5:15:28 PM ET] thank you and maybe just as a a financial [5:15:34 PM ET] follow-up just to make sure we heard that correctly you mentioned that i think that auto gross margins [5:15:40 PM ET] should be positive exiting the year does that mean we should expect a full quarter of positive [5:15:40 PM ET] auto gross margins or just sort of a run rate [5:15:40 PM ET] in december [5:15:40 PM ET] thank you [5:15:46 PM ET] thanks george i the way we phrased in the prepared remarks was that [5:15:52 PM ET] intend to exit the quarter at an automotive gross profit i wouldn't expect the full quarter [5:15:52 PM ET] but it does set us up really well as we continue to ramp r2 [5:15:58 PM ET] we think about the progression we see through twenty twenty seven for the year [5:15:58 PM ET] thank you [5:16:10 PM ET] thank you our next question comes from joseph spak [5:16:10 PM ET] from ubs please unmute yourself and ask your question [5:16:22 PM ET] thank you and congratulations [5:16:22 PM ET] to both claire and and and derek claire [5:16:28 PM ET] it's great working with you over the years and derek again congrats [5:16:28 PM ET] first [5:16:34 PM ET] you know you you mentioned this hundred and twenty million of incremental cost of revenues [5:16:34 PM ET] due to the ramp [5:16:34 PM ET] but [5:16:40 PM ET] that's not really [5:16:40 PM ET] you know cost of good right so i i guess what what i'm what i'm [5:16:40 PM ET] wondering if you could help us [5:16:46 PM ET] understand is you know today's realized pricing and mix [5:16:52 PM ET] like what is the r two contribution margin be [5:16:52 PM ET] you know before those launch efficiencies and the fixed cost absorption because [5:16:58 PM ET] because because and then i think you get could get a better sense of [5:16:58 PM ET] know if we add back some of those inefficiencies [5:17:04 PM ET] what for lack of a better term you know a mature gross margin would be [5:17:10 PM ET] yeah thanks joe so the the hundred twenty million we quoted really is comparing [5:17:10 PM ET] where our cost structure is today as we think about [5:17:16 PM ET] our conversion costs our depreciation [5:17:22 PM ET] in relation to what our two shift operation should be performing at and so that's just really the effect of not [5:17:22 PM ET] having a full rate of production at a two shift operation today [5:17:28 PM ET] in addition that one hundred and twenty includes some of things like expedited freight [5:17:34 PM ET] and some other costs that we expect to wind off as we continue to scale [5:17:34 PM ET] i think when you look at our two today in second quarter we saw about a [5:17:40 PM ET] a twelve thousand dollar per unit step down in cost [5:17:40 PM ET] of goods sold per unit delivered [5:17:49 PM ET] and i think that that is the biggest driver of that is introducing r two [5:17:49 PM ET] one is r two is a lower cost product but two is r two is benefiting from [5:17:52 PM ET] a scale protected perspective within normal [5:17:52 PM ET] as we step back and you look at our total automotive gross profit [5:17:58 PM ET] excluding regulatory regulatory credits [5:17:58 PM ET] on a cash basis that was positive for the quarter and we expect that momentum to continue as we scale and ramp r2 [5:18:04 PM ET] okay [5:18:10 PM ET] and and i guess just the second question maybe [5:18:10 PM ET] building off the first one is [5:18:16 PM ET] since you announced r2 pricing in march earlier this year there's [5:18:16 PM ET] been a lot of inflation whether it's memory [5:18:22 PM ET] pcb you know other electronics steel copper [5:18:22 PM ET] i i i guess aluminum looks [5:18:28 PM ET] pretty flat so so maybe that matters less today with the launch [5:18:28 PM ET] additions but i was wondering if you could give us any [5:18:34 PM ET] anecdotes as to sort of how your [5:18:40 PM ET] looking for or have been able to find engineering or manufacturing [5:18:40 PM ET] efficiencies or other offsets to to be able to maintain [5:18:46 PM ET] those those those targeted gross margins for for the new vehicle [5:18:46 PM ET] well thanks joe you know big [5:18:52 PM ET] part of our engineering team is is working anomaly [5:18:58 PM ET] you know ramping production and and achieving all the volume that [5:18:58 PM ET] that the normal facility is capable of [5:19:04 PM ET] but also looking at what further improvements we can make to the vehicle [5:19:04 PM ET] some of those will be captured in the vehicle is produced in stanton springs in our georgia facility [5:19:10 PM ET] but a number of those are going to be flowing into the vehicle over the coming months and quarters [5:19:16 PM ET] and of course as you said with some of the commodity pricing being a lot [5:19:16 PM ET] higher than [5:19:16 PM ET] what we expected i think memory is a [5:19:22 PM ET] really important call out there [5:19:28 PM ET] we've really been focused to find other mechanisms to offset that [5:19:28 PM ET] and to enable us to still deliver on [5:19:34 PM ET] the the various trends that we've talked about you know with the base [5:19:34 PM ET] trim starting at forty five thousand dollars and the and the top spec trim [5:19:34 PM ET] being at about fifty seven thousand dollars [5:19:40 PM ET] and so the team is making great progress on that and it's really you know in terms of examples [5:19:40 PM ET] it's across the board it's it's how we're [5:19:46 PM ET] you know it's it's details within the plan how we're operating the plant [5:19:46 PM ET] it's looking at improvements in [5:19:52 PM ET] packaging for logistics for moving parts from suppliers to our plant [5:19:58 PM ET] and then it's down to working really closely with our supplier partners [5:20:04 PM ET] on identifying further cost optimizations in the component level [5:20:04 PM ET] really that that don't impact the performance or capabilities of the vehicle that are [5:20:10 PM ET] you know that that's often is part consolidation or [5:20:10 PM ET] part elimination through you know through redesign of the components [5:20:16 PM ET] but you know the team's really doing an outstanding job of of [5:20:16 PM ET] hunting for and looking for those opportunities and we've got a real [5:20:22 PM ET] full court press focused on them [5:20:22 PM ET] thank you [5:20:28 PM ET] our next [5:20:34 PM ET] question comes from mark delaney with goldman sachs [5:20:34 PM ET] please unmute yourself and ask your question [5:20:40 PM ET] good afternoon thank you for taking the [5:20:40 PM ET] question claire thanks for all your help wishing you the best going forward and derek [5:20:46 PM ET] congratulations on the expanded responsibilities [5:20:46 PM ET] i was hoping to [5:20:52 PM ET] better understand what's going on with the r two ramp and nice to see [5:20:52 PM ET] the the good momentum you just reported and a number of positive comments that you you made [5:20:58 PM ET] that you're seeing with that product can you share more on what you think are the key factors that will determine [5:21:04 PM ET] the pace of r2 delivery growth in 4q and twenty twenty seven [5:21:04 PM ET] and how much is it about converting on those record number of demo drives [5:21:10 PM ET] and positive media reviews into new r two orders or is it more about ramping [5:21:10 PM ET] the supply chain and manufacturing [5:21:16 PM ET] of course launching a [5:21:16 PM ET] vehicle is a lot of moving components and i think often [5:21:22 PM ET] the focus and attention gets directed [5:21:22 PM ET] at the plant the the manufacturing operations and of course that's a huge part of this [5:21:28 PM ET] but i do wanna really call out the importance of also ramping the supply base [5:21:34 PM ET] and in the case of r two we have a number of new suppliers we took a [5:21:34 PM ET] an aggressive approach of [5:21:40 PM ET] reducing our supply chain complexity to have a a smaller [5:21:46 PM ET] set of tier one suppliers to enter the business [5:21:46 PM ET] so we can only ramp as fast as our slowest ramping supplier [5:21:46 PM ET] and that's not to say [5:21:52 PM ET] there's a there's like an acute challenge with a single supplier but rather [5:21:58 PM ET] the ramp up requires each of you know [5:21:58 PM ET] each of the suppliers to ramp and they need to be highly coordinated [5:22:04 PM ET] and so that's something we're very focused on you know javier is joining us on the call as well but in [5:22:04 PM ET] some comments here as well but [5:22:10 PM ET] you know our supply chain team or our [5:22:10 PM ET] overall [5:22:10 PM ET] logistics team [5:22:16 PM ET] been working very closely together to make sure that this ramp is smooth [5:22:22 PM ET] yeah i need that ajay i i've been importing many lunches [5:22:22 PM ET] all across all my my career [5:22:22 PM ET] and supply chain is always a [5:22:28 PM ET] complex part of a launch that we already [5:22:28 PM ET] flagged from from day one bringing up hundreds of suppliers and [5:22:34 PM ET] their tier two and their tier three is an an immense task [5:22:40 PM ET] what we are always doing is identifying [5:22:40 PM ET] where are the suppliers that need some some support and we have [5:22:46 PM ET] special teams to to help them to support our [5:22:52 PM ET] our scale that's the focus area [5:22:52 PM ET] scaling our supply chain [5:22:58 PM ET] thank you both for those comments my other question was on autonomy plus [5:23:04 PM ET] and better understanding the impact it may be having on the business [5:23:04 PM ET] maybe you can give a bit more color on how impactful autonomy plus [5:23:10 PM ET] was in that forty five percent year over year growth in the software services and other segment and [5:23:10 PM ET] and when you talk to people who are buying rivian vehicles are they [5:23:16 PM ET] you that autonomy plus is one of the key reasons that they're making that decision [5:23:16 PM ET] thank you [5:23:25 PM ET] yes as we said in opening remarks [5:23:25 PM ET] autonomy plus take rate on autonomy is on autonomy plus is [5:23:28 PM ET] exceeded our expectations and we're quite encouraged by it [5:23:34 PM ET] instance say timing plus the the core feature within it [5:23:34 PM ET] is what we call universal hands free which is a hands free [5:23:40 PM ET] driving capability that can be used on you know millions of miles across the united states [5:23:49 PM ET] what's coming has us even more excited and that's our point to point [5:23:49 PM ET] and that's where [5:23:52 PM ET] addition to being hands free the vehicle can navigate entirely [5:23:52 PM ET] a destination so you plug the address in and [5:23:58 PM ET] you know navigate through four way stops through complex interchanges [5:23:58 PM ET] highway on and off ramps [5:24:04 PM ET] and we think that will start to really create you know [5:24:10 PM ET] new levels of demand and new levels of interest [5:24:10 PM ET] today [5:24:19 PM ET] in the market there's really only one other product that that has that of course [5:24:19 PM ET] with with tesla's fsd [5:24:19 PM ET] and so this you know this for us is an important capability [5:24:22 PM ET] we think becomes even more important over the coming [5:24:22 PM ET] quarters and i would say years [5:24:28 PM ET] as more and more customers get exposed to this and [5:24:28 PM ET] really think of it as a core purchase criteria for the vehicle [5:24:46 PM ET] our next question comes from dan levy with barclays [5:24:52 PM ET] please unmute yourself and ask your question [5:24:58 PM ET] great thank you for for taking the questions [5:25:04 PM ET] wanted to ask first of all claire [5:25:13 PM ET] congratulations and derek congratulations to both of you on [5:25:13 PM ET] on your new roles [5:25:16 PM ET] wanted to ask about edv yet another [5:25:22 PM ET] quarterly record in terms of amazon revenue [5:25:22 PM ET] if you could just again help us unpack you know the upside there but [5:25:28 PM ET] maybe you could also talk about some of the upside we're seeing potentially with other customers [5:25:28 PM ET] you know you've probably seen there's [5:25:34 PM ET] some some images that went around of of an edv [5:25:40 PM ET] wrapped with another [5:25:40 PM ET] company out there walmart you know just maybe you could talk about [5:25:46 PM ET] the potential for uptake with other [5:25:46 PM ET] companies on edv and if amazon is finally you know driving this [5:25:58 PM ET] thanks dan the edb product it's it's exciting to watch it's [5:25:58 PM ET] it's something [5:25:58 PM ET] we've really optimized around enabling [5:26:04 PM ET] and really driving an advantaged cost structure and so we've seen amazon as [5:26:04 PM ET] as they've [5:26:10 PM ET] ramped you know from the early years of this program up through this year where they've [5:26:10 PM ET] now had a large fleet deployed [5:26:16 PM ET] they have lots of data on how the vehicle is performing [5:26:25 PM ET] and it's creating like true and and very real structural cost advantages [5:26:25 PM ET] that you are leading into leading amazon to double down to [5:26:31 PM ET] to continue to buy more vehicles and so [5:26:31 PM ET] as you've heard from us in in previous calls [5:26:34 PM ET] this year we have seen a significant step up in the level of demand for amazon [5:26:40 PM ET] and that's a you know that's a direct reflection [5:26:40 PM ET] of the advantages that our edb platform provides to [5:26:46 PM ET] their commercial operators and so with that said [5:26:52 PM ET] we you know we do see other commercial operators as they start to really look [5:26:52 PM ET] at ways to drive more efficiency into the business [5:26:58 PM ET] starting to look at the edd you know we were excited for those [5:26:58 PM ET] potential [5:26:58 PM ET] you know future customers on this program as well [5:27:04 PM ET] great thank you [5:27:10 PM ET] as a follow-up wanted to ask about the jv with [5:27:10 PM ET] volkswagen on network architecture [5:27:16 PM ET] and the potential to expand that to to others [5:27:22 PM ET] maybe you could just talk about how that jv is is progressing [5:27:28 PM ET] and you know just as the as the technology goes [5:27:28 PM ET] your vehicle and their vehicles what are you potentially going to hear from [5:27:34 PM ET] other automakers that might want to adopt this [5:27:34 PM ET] well the the first [5:27:43 PM ET] real outcome output from the joint venture [5:27:46 PM ET] is gonna be launching next year so this is the the volkswagen id one product this is a [5:27:46 PM ET] a roughly twenty thousand euro [5:27:52 PM ET] ev that that volkswagen's producing for europe [5:27:52 PM ET] so we're really excited about that it's it's a wonderful way [5:27:58 PM ET] to demonstrate the capabilities of our technology [5:27:58 PM ET] outside of the raveed brand and and outside the us market [5:28:07 PM ET] know importantly this is you know being in europe this is this is vehicle that's gonna be competing directly [5:28:10 PM ET] against not only european manufacturers but also chinese manufacturers [5:28:16 PM ET] and we're very confident in the capability of the technology [5:28:16 PM ET] and the efficiency or the cost efficiency of being able to deliver [5:28:22 PM ET] a really you know broad set [5:28:22 PM ET] and impressive set of features [5:28:22 PM ET] in a vehicle at that price point [5:28:31 PM ET] and so i've i've said this before but we think of that vehicle as really a [5:28:34 PM ET] a billboard for the capability it really demonstrates what can be done [5:28:40 PM ET] and so the technology we've developed we we certainly [5:28:40 PM ET] about this as having applications [5:28:46 PM ET] not only beyond rivian but also beyond this existing joint venture and into other applications [5:28:46 PM ET] with other manufacturers but our focus today has been heads down [5:28:52 PM ET] on both the rivian programs as well as the volkswagen group programs the first of which as i said is the [5:28:52 PM ET] the id one [5:28:58 PM ET] great thank you [5:29:04 PM ET] thank you our next question comes from ittai mikhaili with td coven [5:29:04 PM ET] please unmute yourself and ask your question [5:29:16 PM ET] great thanks hi everybody claire derek congrats to you both and and best wishes [5:29:22 PM ET] maybe first question going back to autonomy plus [5:29:22 PM ET] and it's becoming a a driver a major driver of demand for you [5:29:28 PM ET] i'm curious whether you think consumers are are [5:29:28 PM ET] are sort of coming to purchase the vehicles with the point to point [5:29:34 PM ET] feature in the future in mind or or do you think that when you launch point to [5:29:40 PM ET] point could that be another step function improvement in demand and maybe similarly for [5:29:40 PM ET] the the gen three hardware when that's launched as well [5:29:46 PM ET] i think in in a very broad sense [5:29:46 PM ET] to date autonomy has not been [5:29:55 PM ET] a major driver for most customers in the united states [5:29:55 PM ET] that's [5:30:02 PM ET] that's sort of evidenced by most of the vehicles that are being sold today do not have [5:30:02 PM ET] you know very very much autonomous capability [5:30:04 PM ET] i do think that we're at at the base [5:30:04 PM ET] of a very significant inflection point though [5:30:10 PM ET] we're gonna start to see [5:30:10 PM ET] a much broader set of customers start to really look for [5:30:19 PM ET] advanced capabilities and i and and with that i think [5:30:22 PM ET] point to point is is really in many ways the unlock for that where it really becomes [5:30:22 PM ET] in some ways like a magical experience where you get into the vehicle and and [5:30:31 PM ET] the cognitive load tough to operate the vehicle [5:30:31 PM ET] and navigate the vehicle is dramatically reduced because [5:30:34 PM ET] you simply have to put in your your end destination and the vehicle can handle [5:30:34 PM ET] what happens in between [5:30:40 PM ET] and so this has been as we've talked about in previous calls this has been a major focus for us [5:30:40 PM ET] a major and when i say that that's a major focus of [5:30:46 PM ET] of resources both dollars on the r and d side as well as those people [5:30:54 PM ET] we've designed our architecture inclusive of the sensor set [5:30:54 PM ET] our compute topology [5:30:58 PM ET] the way we're developing a system around this neural net based foundation model [5:31:04 PM ET] and and the whole business to really support [5:31:10 PM ET] both progress around autonomy but specifically progress towards some of these key milestones or key steps with [5:31:10 PM ET] point to point being [5:31:10 PM ET] the first of of multiple key steps that ultimately lead to [5:31:16 PM ET] the the level four capability that we're planning for for twenty twenty eight [5:31:22 PM ET] terrific rj and a quick follow-up maybe touch upon just [5:31:28 PM ET] the acquisition of of third dimension does that [5:31:28 PM ET] kinda help you get to level four does it maybe expand the [5:31:34 PM ET] scope of odds just kinda curious a bit on kinda what this does post the acquisition [5:31:42 PM ET] yeah this is a it's an exciting addition to the team [5:31:42 PM ET] we're we're really pleased to have completed this acquisition and [5:31:42 PM ET] you know when you when you look at development of [5:31:48 PM ET] these higher levels of autonomy and and really building them around a model based approach [5:31:52 PM ET] so you know an ai based approach versus [5:31:58 PM ET] the the autonomy one dot o approach of using a more deterministic rules based approach [5:31:58 PM ET] a key part of that is what we call the eval [5:31:58 PM ET] process that you know how we're evaluating the model [5:32:04 PM ET] and you can do that [5:32:10 PM ET] an open loop way by putting it on vehicles and driving those vehicles [5:32:10 PM ET] and that's it's obviously proven we've seen that [5:32:16 PM ET] you know dot net many other companies use that approach and it'll continue to be used [5:32:22 PM ET] but in addition we wanna create closed loop mechanisms whereby we can [5:32:22 PM ET] test the model [5:32:22 PM ET] real life conditions [5:32:28 PM ET] or simulated conditions and then make lots and lots and lots of iterations [5:32:28 PM ET] on those conditions [5:32:34 PM ET] and to do fault injection to do [5:32:34 PM ET] unique circumstance injection to into the simulations and so [5:32:40 PM ET] the the acquisition of third dimension is [5:32:40 PM ET] supporting [5:32:46 PM ET] the simulation work that we've been building on within the company [5:32:52 PM ET] and the ability to have more rapid closed loop [5:32:52 PM ET] simulations that allow us to deploy models more rapidly and then of course make progress [5:32:58 PM ET] in advancing the models more rapidly [5:32:58 PM ET] that's very helpful thank you [5:33:04 PM ET] thank you our next question comes from alex perry with bofa [5:33:13 PM ET] please unmute yourself and ask your question [5:33:16 PM ET] hi thanks for taking our [5:33:16 PM ET] questions here and i definitely wanna echo the congrats to claire and derek as well [5:33:22 PM ET] i guess maybe just following up on point to point [5:33:28 PM ET] with the autonomy early access program beginning in december what do you need to see from that group [5:33:34 PM ET] before moving you know to a broader twenty twenty seven release [5:33:34 PM ET] is this to gather data and sort of [5:33:40 PM ET] validate the incident profile here looks [5:33:40 PM ET] love to just get your thoughts on you know what you need to to see there [5:33:46 PM ET] having an early access program is [5:33:46 PM ET] you know it's a very common approach for [5:33:52 PM ET] newer technologies to get feedback [5:33:52 PM ET] from a broad spectrum of users [5:33:58 PM ET] and that's everything from the functionality features to [5:34:04 PM ET] you know the interface and the the how the feature is deployed or you know how they're [5:34:04 PM ET] actualized how they're you know what the ui looks like [5:34:10 PM ET] and so this early access program allows us to do that it gives us [5:34:16 PM ET] the opportunity to get really rich and diverse feedback from a broad set of customers [5:34:22 PM ET] in different driving environments and different you know different geographies [5:34:22 PM ET] so that's that was how it's designed [5:34:28 PM ET] of course as you said that that sets us up to then have the full [5:34:28 PM ET] broad release across all autonomy plus subscribers [5:34:28 PM ET] in the twenty twenty seven time frame [5:34:36 PM ET] perfect and then i guess i wanted to ask [5:34:36 PM ET] about [5:34:36 PM ET] know how [5:34:42 PM ET] the the edge cases that you're trying to solve for here [5:34:48 PM ET] at first you know we've heard about you know pickup drop off [5:34:52 PM ET] being a little bit of a you know an edge case that's [5:34:58 PM ET] tougher to solve but love to just get your you know when you're first launching [5:34:58 PM ET] point to point what what will the functionality [5:35:04 PM ET] of really entail and then how do you expect it to you know progress over time [5:35:10 PM ET] yeah i mean there's [5:35:10 PM ET] we i guess when you think about education there's a broad spectrum of [5:35:16 PM ET] types of educations [5:35:16 PM ET] yeah the the pickup drop off is particularly important for [5:35:22 PM ET] robotaxi or level four applications so it's you know that's a [5:35:22 PM ET] that's beyond what we're [5:35:22 PM ET] and that's that's i'd say more even more important [5:35:28 PM ET] when we start to look at deployment of [5:35:28 PM ET] our uber partnership in twenty twenty eight [5:35:34 PM ET] and i'm sure many have experienced this the challenges of let's say [5:35:40 PM ET] dropping someone off or picking someone up in a in a highly urban environment [5:35:46 PM ET] where there's no place for the vehicle to pull off and so you're sort of [5:35:46 PM ET] stopping in lane on a road [5:35:52 PM ET] those are those are challenging situations and challenging as we've you know even on deploy [5:35:52 PM ET] deployed vehicles today [5:35:52 PM ET] as it pertains to the consumer vehicles and point to point [5:35:58 PM ET] some of those are solved [5:35:58 PM ET] simply through this being a supervised product so the [5:36:04 PM ET] if it's a very complex [5:36:04 PM ET] pickup or drop off situation you have the benefit of someone in the driver's seat [5:36:10 PM ET] and this is where you know really being thoughtful on the ui [5:36:16 PM ET] that situation is important so what is the vehicle doing it gets to destination and how [5:36:16 PM ET] and how does it indicate [5:36:16 PM ET] to the to you know person in the driver's seat [5:36:22 PM ET] and we're working really hard to make sure all those those [5:36:28 PM ET] the the ui and the thinking about what that interface feels like and it [5:36:28 PM ET] experiencing the product is is really seamless and [5:36:28 PM ET] easy to use and understand [5:36:34 PM ET] perfect that's really helpful best of luck going forward [5:36:40 PM ET] thank you our next question comes from shreyas patel with wolfe research [5:36:46 PM ET] please unmute yourself and ask your question [5:36:52 PM ET] hey thanks thanks so much for taking [5:36:58 PM ET] for taking my questions curious on [5:36:58 PM ET] on r and d i think it was up seven percent year over year excluding stock comp [5:37:04 PM ET] i know that's an important cost item or i know an important [5:37:10 PM ET] element there is the cost for leasing ai compute [5:37:10 PM ET] capacity for training and i'm curious what you're seeing in terms of pricing and [5:37:16 PM ET] available capacity we are seeing industry wide [5:37:22 PM ET] token prices move higher but just curious what you're seeing on the ground [5:37:22 PM ET] yeah thanks for asking [5:37:28 PM ET] are seeing some increased pricing as we think about leasing compute [5:37:34 PM ET] with that said as we think about the looking at q3 this year to q4 [5:37:34 PM ET] we do expect a low double digit growth rate in r and d [5:37:40 PM ET] as we look at next year we do expect [5:37:40 PM ET] our r and d line to grow more significantly in twenty seven than it did in twenty six [5:37:46 PM ET] this is really all driven by our strategic investments in autonomy software [5:37:46 PM ET] autonomy hardware and some vehicle technologies and so [5:37:52 PM ET] we continue to to be efficient in our uses of compute but it continues to [5:37:58 PM ET] we'll expect to continue to expand that as we think about next year and the progress we're making on our large driving model [5:37:58 PM ET] okay thanks [5:38:04 PM ET] and then maybe on input cost i i think you alluded to [5:38:10 PM ET] alluded to that as as as being a a headwind [5:38:10 PM ET] i'm i'm just curious [5:38:16 PM ET] in in terms of some of the if can drill down more [5:38:16 PM ET] specifically on some of the actions you're taking [5:38:22 PM ET] to try and mitigate that [5:38:22 PM ET] whether it's coming from higher steel [5:38:28 PM ET] or freight logistics dram [5:38:28 PM ET] maybe if you just put provide a little more more color [5:38:40 PM ET] yeah there's you know there's so many components that go into a vehicle [5:38:40 PM ET] and so you know the the big big categories are of course bill of materials [5:38:46 PM ET] you know then you have conversion cost you're [5:38:52 PM ET] you know cost to to build the vehicle the plant and you have logistics [5:38:52 PM ET] costs and so across each of those categories [5:38:52 PM ET] we have organized you know [5:38:58 PM ET] teams of people that are working to [5:38:58 PM ET] identify opportunities and [5:39:04 PM ET] the those opportunities we're identifying as i described before [5:39:04 PM ET] range from things that we can deploy in very near term so these are [5:39:10 PM ET] ideas that can be deployed within weeks [5:39:10 PM ET] to then ideas that require years of time meaning like significant [5:39:16 PM ET] redesign or or selection of new suppliers [5:39:16 PM ET] and so this is something [5:39:22 PM ET] in any scenario we'd be fighting and pushing for [5:39:22 PM ET] but i think to the to your to point of your question this is [5:39:28 PM ET] of even more importance given some of the headwinds that have [5:39:34 PM ET] that have you know merged around raw material costs [5:39:34 PM ET] and you know memory costs [5:39:34 PM ET] but we continue to make progress on that [5:39:40 PM ET] i think the the most important very near term thing that we're doing [5:39:46 PM ET] is the ramp is focusing on getting better fixed cost absorption [5:39:46 PM ET] through getting more output [5:39:52 PM ET] from the plant that's been installed and from the team that's [5:39:52 PM ET] working those lines and so that's everything from getting our supplier [5:39:58 PM ET] suppliers ramped as you heard from derek and i earlier derek hovering here earlier [5:39:58 PM ET] and then making sure that we can very efficiently convert all those components from suppliers [5:40:04 PM ET] into our vehicles in the plan [5:40:10 PM ET] okay thanks and and maybe if i could just squeeze the last [5:40:10 PM ET] quick one and and apologies if you had mentioned it previously but the [5:40:10 PM ET] reduction in capex for this year [5:40:16 PM ET] now one point four to one point five billion just what's driving that [5:40:22 PM ET] thanks yeah sure yes the reduction in capex is mostly [5:40:22 PM ET] driven by timing just some timing shift as we look at our our spend related to our georgia [5:40:22 PM ET] facility [5:40:28 PM ET] at the moment it's it's a very lumpy sequencing of spend as we think about large equipment and purchases and large [5:40:28 PM ET] large contracts and so [5:40:34 PM ET] as those move from an invoice or payment perspective or timing perspective by a few weeks it's just [5:40:40 PM ET] between quarters so i'd characterize the move the the lowering of the capex strictly from a timing [5:40:40 PM ET] perspective [5:40:40 PM ET] okay great thanks a lot [5:40:46 PM ET] thank you [5:40:52 PM ET] our next question comes from edison yu with deutsche bank [5:40:52 PM ET] please unmute yourself and ask your question [5:40:58 PM ET] great and congrats claire derek [5:40:58 PM ET] first question [5:41:04 PM ET] we saw some media reporting lily about [5:41:04 PM ET] basically [5:41:04 PM ET] of your vehicles [5:41:10 PM ET] badge with walmart on it curious if you can comment at all if this is [5:41:16 PM ET] you know testing phase or part of some type of you know [5:41:16 PM ET] enterprise [5:41:16 PM ET] enterprise deal [5:41:22 PM ET] yeah as i mentioned earlier as we've [5:41:28 PM ET] we with our commercial band program we continue to have discussions with [5:41:28 PM ET] customers outside of amazon of course our our partnership with amazon is [5:41:34 PM ET] you know continues to progress and advance in extremely positive ways [5:41:40 PM ET] this year represented a big step up in volume with them and it is really a reflection of [5:41:40 PM ET] performance [5:41:46 PM ET] and cost advantages enabled by this this platform [5:41:46 PM ET] so we do you know we do continue to look for [5:41:52 PM ET] and work with other potential partners as as we go forward [5:41:58 PM ET] understood [5:41:58 PM ET] follow-up i wanted to ask about [5:42:04 PM ET] third dimension i think my crude understanding is that [5:42:04 PM ET] it it sort of turns video [5:42:10 PM ET] kind of regular video into like a three d copy of the world of sorts [5:42:10 PM ET] is that kind of [5:42:16 PM ET] a very simplistic understanding of of what it does and then [5:42:16 PM ET] following up on that [5:42:22 PM ET] are there any kind of capabilities out there in addition to this that you think you'd need to [5:42:22 PM ET] complete the autonomy stack [5:42:34 PM ET] sure i yeah i've talked about it a little bit before but the third dimension acquisition was [5:42:34 PM ET] something we're really excited about it bolsters [5:42:40 PM ET] our simulation efforts within the business and and helps us create [5:42:40 PM ET] efficient closed loop mechanisms by which we can validate [5:42:46 PM ET] and and improve on our models [5:42:52 PM ET] and these are efforts that of course were underway within the business already this is a this [5:42:52 PM ET] a great way for us to help accelerate some of that work and [5:42:58 PM ET] as you think about simulation and the importance of simulation [5:42:58 PM ET] this becomes of even you know [5:43:04 PM ET] using simulation for validation becomes an even more important element [5:43:10 PM ET] for rapidly iterating on the model architecture model design [5:43:16 PM ET] thank you our next [5:43:22 PM ET] question comes from tobias baif with robot and co redburn [5:43:22 PM ET] please unmute yourself and ask your question [5:43:28 PM ET] hi [5:43:34 PM ET] i have just one question please [5:43:34 PM ET] over the next two to three years what are your priorities [5:43:40 PM ET] for increasing brand awareness or brand equity [5:43:40 PM ET] and and how will you measure whether those efforts are translating [5:43:46 PM ET] into customer acquisition and revenue growth [5:43:52 PM ET] well that's a great question toby we [5:43:52 PM ET] we're really excited with the the launch of r2 to have a product now that has [5:43:58 PM ET] a much broader [5:43:58 PM ET] and wider aperture [5:44:04 PM ET] for customers whereas you know of course r one was our handshake with the world it was a it's a [5:44:04 PM ET] great product to introduce the european brand [5:44:04 PM ET] you know to consumers but [5:44:10 PM ET] virtue of its price point by virtue of being our flagship product [5:44:16 PM ET] you know its price made it not something that many customers would be considering [5:44:22 PM ET] and so with the r two the your price starting at forty five and going up [5:44:22 PM ET] through mid to high fifties [5:44:22 PM ET] puts it right smack [5:44:28 PM ET] sort of overlapping with the average price of a new car in the united states [5:44:34 PM ET] in the most popular segment the midsize crossover and suv segment [5:44:40 PM ET] and so that on its own is gonna lead to more vehicles on the road which which [5:44:40 PM ET] of course will create more awareness [5:44:46 PM ET] but bolstering not just the vehicle and its you know increased presence on the roads [5:44:46 PM ET] is we're we're doing a bunch of really creative ways of getting the brand out there [5:44:52 PM ET] maybe the most recent one as a good [5:44:52 PM ET] demonstration this is what we did for halloween this year [5:44:58 PM ET] course we've we've been doing halloween mode [5:44:58 PM ET] since we launched the company and each year we think of really creative ways to do [5:45:04 PM ET] do fun things that bring a lot of excitement to customers but [5:45:10 PM ET] this year we we partnered with sony and created a halloween mode where [5:45:10 PM ET] we had ghostbusters integrated to the vehicle [5:45:16 PM ET] of course working close with bill murray to to [5:45:16 PM ET] do this was a lot of fun but these are ways we can [5:45:22 PM ET] really cut across culture cut across a wide [5:45:28 PM ET] spread of demographics and create awareness for the brand as as as you noted [5:45:28 PM ET] perfect thank you so much for your time [5:45:34 PM ET] thank you [5:45:34 PM ET] our next question comes from rajat gupta with jpmorgan [5:45:40 PM ET] unmute yourself and ask your question [5:45:52 PM ET] rajat gupta [5:45:58 PM ET] please unmute yourself and ask your question [5:46:16 PM ET] our next question comes from chris pearce [5:46:22 PM ET] with needham please unmute yourself and ask your question [5:46:28 PM ET] hey just a quick one [5:46:28 PM ET] to [5:46:34 PM ET] can you just kinda talk to the lidar variant of the r two i i believe originally it was [5:46:40 PM ET] supposed to be coming out to consumers this year i i think that [5:46:40 PM ET] term delay might be a bit harsh but now it's employee only for testing [5:46:46 PM ET] for purchase i just kinda wanna understand if there was some sort of component delay or just sorta are [5:46:52 PM ET] the bay the initial launch variant was better than expected i'm just kinda curious what drove that decision [5:46:52 PM ET] well thanks chris on on our autonomy platform [5:46:58 PM ET] i mentioned before the large driving model [5:46:58 PM ET] and so large driving model is something that's gonna be deployed across [5:47:04 PM ET] all of our r two vehicles in [5:47:04 PM ET] of course launch edition and then model twenty twenty five [5:47:11 PM ET] our one year [5:47:11 PM ET] r ones with new model twenty twenty five [5:47:11 PM ET] or newer [5:47:23 PM ET] and so importantly that means point to point is gonna be available on all those vehicles and [5:47:23 PM ET] the capabilities that that entails we think are quite quite quite exciting [5:47:29 PM ET] the [5:47:29 PM ET] yeah the the next hardware generation which includes our rap1 processor which is for each [5:47:35 PM ET] processor to be eight hundred tops we have two of those for sixteen hundred tops in the vehicle [5:47:41 PM ET] we marry that with an enhanced perception platform that includes camera radar and as you pointed out [5:47:41 PM ET] a lidar sensor [5:47:47 PM ET] that as you said is going through employee like an employee program [5:47:52 PM ET] late this year and a validation builds validation process this year [5:47:52 PM ET] and then into twenty twenty seven that vehicle will be available [5:47:58 PM ET] but we're we're we're really excited about what ldm the large drive model represents and what that [5:47:58 PM ET] can bring to [5:48:04 PM ET] everything from as i said model year twenty twenty five r one [5:48:04 PM ET] existing r two and then future r two [5:48:10 PM ET] okay perfect and then you've talked about [5:48:16 PM ET] order book to purchase conversion i think just kinda using conversion broadly can you [5:48:16 PM ET] can you talk about test drive to order book conversion given how [5:48:22 PM ET] drives are up so much sequentially with the launch of the r two like what's you know is it that [5:48:28 PM ET] i guess just sort of what are you seeing there and is it is it a long wait kind of [5:48:28 PM ET] maybe long is not the right word but are are people kinda converting from test drives [5:48:34 PM ET] to the order book at what kind of rate versus the r one or just any color you can share there [5:48:40 PM ET] yeah the the maybe the most interesting is we launched with the launch variant [5:48:40 PM ET] and so that's [5:48:46 PM ET] you know premium performance trim [5:48:46 PM ET] and we had certain assumptions around what the conversion for that would be [5:48:52 PM ET] recognizing it's the the most expensive r two [5:48:58 PM ET] and the conversion to date has exceeded our expectations [5:48:58 PM ET] which is really encouraging [5:49:04 PM ET] that doesn't take away from how excited we are for the other trims to also come in [5:49:10 PM ET] but but it's it's you know outstanding to see so many folks excited just [5:49:10 PM ET] to get into an r two and also be [5:49:10 PM ET] be in the launch configuration [5:49:10 PM ET] with regards to [5:49:16 PM ET] drives i'm glad you called it out this is an important [5:49:22 PM ET] metric for us and we did see a significant step up in in test drives [5:49:22 PM ET] really as a result of having r2 available [5:49:28 PM ET] the level of excitement from folks to get in and experience the vehicle [5:49:40 PM ET] our next question comes from tom narayan with rbc [5:49:40 PM ET] please unmute yourself and ask your question [5:49:46 PM ET] ah yes thanks for taking the question yeah good luck claire congrats derek [5:49:52 PM ET] first question is on the r two i know you've been selling the kind of higher end [5:49:52 PM ET] trims [5:49:58 PM ET] but then next year you're gonna have the kinda lower end trims with [5:50:04 PM ET] in a lower battery range just curious what you think about [5:50:10 PM ET] consumer consumer demand for for the for that for those [5:50:10 PM ET] specs with with the lower battery range especially in light of i guess what model wise about [5:50:10 PM ET] ranges relative to price [5:50:16 PM ET] and then also the impact on margins [5:50:22 PM ET] for for that lower end lower trim r two and then i have a follow-up [5:50:22 PM ET] yes as i said we're we're excited about [5:50:28 PM ET] all the different trends there's there's sort of two big [5:50:34 PM ET] variables to think about in [5:50:34 PM ET] the different configurations so we have a premium trim [5:50:40 PM ET] and then a standard trim that's the [5:50:40 PM ET] that's the like the interior appointments of the rear drop glass [5:50:46 PM ET] that that links to that a few other features within the vehicle [5:50:52 PM ET] and then there's a propulsion variation so we have all wheel drive [5:50:52 PM ET] performance we have all wheel drive base and [5:50:52 PM ET] and then we have a rear wheel drive variant [5:50:58 PM ET] and then within the rear wheel drive variant we have a larger pack and a smaller pack [5:50:58 PM ET] and so [5:51:04 PM ET] really the reason we create all those variants [5:51:04 PM ET] is or i should is because we wanna make sure we [5:51:10 PM ET] you know cover the demand curve so cover [5:51:10 PM ET] give customers enough choices across performance range price [5:51:16 PM ET] point content [5:51:16 PM ET] such that we can [5:51:22 PM ET] we can capture customers from that forty five thousand dollar price point all the way up to the [5:51:22 PM ET] the fifty seven thousand dollar price point [5:51:28 PM ET] and the the [5:51:28 PM ET] the from a unit economics point of view i think that's recognized that when we launch [5:51:28 PM ET] as derek described earlier [5:51:34 PM ET] the lack of volume and the ramp up [5:51:34 PM ET] just because the nature of ramping on a single shift ramping suppliers [5:51:40 PM ET] means that our ability to absorb fixed costs that's depreciation that's the labor cost within the [5:51:40 PM ET] plant [5:51:46 PM ET] is more limited and as we grow volume [5:51:52 PM ET] the actual cost structure of the vehicle comes down quite considerably because those those [5:51:52 PM ET] fixed elements of cost [5:51:52 PM ET] absorbed by a lot more volume [5:51:58 PM ET] and so we've been able to [5:51:58 PM ET] you know very intentionally sequence [5:51:58 PM ET] the the nature of [5:52:04 PM ET] launching with a high priced variant and then [5:52:04 PM ET] bringing in these other trends as our volume grows [5:52:10 PM ET] such that in the end it supports a healthy [5:52:10 PM ET] positive gross margin for the r2 business and of course that given its wine that really drives [5:52:16 PM ET] the the financial performance of of ruby overall [5:52:16 PM ET] got it that's [5:52:22 PM ET] and then my follow-up is on autonomy [5:52:28 PM ET] i think you said the take rates for hands free are better than what you've expected [5:52:28 PM ET] mean can you give us a sense of what [5:52:34 PM ET] what those take rates could be i mean we have a tesla fsds around seventy five percent [5:52:40 PM ET] i mean is it in that order of magnitude [5:52:40 PM ET] and then you know do you see point to point [5:52:46 PM ET] with higher pricing than your current [5:52:52 PM ET] autonomy product you know tesla fsds are on ninety nine dollars a month which suggests that [5:52:52 PM ET] consumers are willing to pay more [5:52:58 PM ET] for autonomy know at least at that quality [5:52:58 PM ET] well [5:52:58 PM ET] i i said this earlier and i do think it's an important call out [5:53:04 PM ET] we really think of point to point as being [5:53:10 PM ET] almost an inflection point in terms of the high [5:53:10 PM ET] experience you can have with autonomy [5:53:16 PM ET] you know hands free as it as it is today is you can use it on any road [5:53:16 PM ET] effectively any road that has lines any marked road so it's millions of miles of roads today [5:53:22 PM ET] but it's not navigating you [5:53:28 PM ET] you know off exits onto you know onto you know [5:53:28 PM ET] urban environments through stoplights since you know [5:53:34 PM ET] know through four way stops and those sorts of things [5:53:34 PM ET] the point to point does do that and with point to point it it [5:53:34 PM ET] it's [5:53:34 PM ET] it creates this [5:53:40 PM ET] much easier experience where it takes the cognitive load of having [5:53:46 PM ET] figure out what you're gonna do navigating thinking pain you know [5:53:46 PM ET] paying attention to which road you're supposed to turn all those things sort of fade away [5:53:52 PM ET] and it is a really nice experience i mean it's i'm driving it every day it's it's wonderful in my community and [5:53:52 PM ET] out of the office [5:53:58 PM ET] and so our view is that that is going to become a big driver of demand [5:53:58 PM ET] and [5:54:04 PM ET] i think it's unclear how quickly the whole and call it the whole us market and the whole [5:54:10 PM ET] whole automotive market starts to shift to really wanting this and this being a major [5:54:10 PM ET] purchase criteria but certainly [5:54:16 PM ET] we're at the front end of an inflection point whereas more and more people are [5:54:16 PM ET] exposed to what this can do [5:54:16 PM ET] we think it's gonna become very important [5:54:22 PM ET] and it's it's precisely because of that [5:54:28 PM ET] that you know for the last few years we've been investing heavily in [5:54:28 PM ET] in building this capability going back to kicking off an in house silicon program [5:54:34 PM ET] you know which ultimately is is you know bodied in our rap one [5:54:40 PM ET] to vertically integrating the the whole platform so that's [5:54:40 PM ET] you know all the perception platform feeding in [5:54:46 PM ET] and running this what we call this ldm or large driving model [5:54:46 PM ET] so we're you know we're [5:54:52 PM ET] extremely excited about this we do think it's a really big [5:54:58 PM ET] driver in the long term for market share for us we think it's gonna be important that customers have [5:54:58 PM ET] some choices [5:54:58 PM ET] as i said with [5:55:04 PM ET] with fst being out there and soon our point to point being out there we think that's that's great [5:55:04 PM ET] and we're you know we're [5:55:10 PM ET] we're we're looking forward to getting it in the hands of our autonomy plus customers and and we think certainly [5:55:10 PM ET] that will drive [5:55:16 PM ET] an increase a further increase i should say [5:55:16 PM ET] in the take rate on autonomy plus [5:55:22 PM ET] okay just to clarify is i mean [5:55:22 PM ET] guess you guys are not giving us the the attach rate [5:55:28 PM ET] for for your autonomy product is it close to [5:55:28 PM ET] the tesla level or [5:55:34 PM ET] you know we're not we're not giving the attach rate maybe someday we will but we're not giving it here [5:55:40 PM ET] and the pricing could it be could you guys raise it for [5:55:40 PM ET] point to point you think [5:55:40 PM ET] what do you think this is this is a [5:55:46 PM ET] interesting question i [5:55:46 PM ET] in the fullness of time of course we think this is [5:55:52 PM ET] you know for over the coming years we do see opportunities for this to continue to grow [5:55:52 PM ET] but i think the dynamics around this [5:55:58 PM ET] are gonna depend on ultimately how the market [5:55:58 PM ET] know how the buck is [5:55:58 PM ET] behaving overall [5:56:04 PM ET] know this this is something today that's purchased as a separate subscription [5:56:10 PM ET] you know you you could imagine models where this gets embedded into the price of the vehicle [5:56:16 PM ET] so there's a lot of different ways this is gonna be priced i i do [5:56:16 PM ET] i i called it out as inflection point i would just say [5:56:22 PM ET] autonomy represents a a big big [5:56:22 PM ET] shift in in the overall topology of of [5:56:28 PM ET] the auto industry i think it's gonna be a big driver of market share and it could drive [5:56:28 PM ET] huge changes in market share [5:56:28 PM ET] shifting between different companies [5:56:34 PM ET] i think the the models by which we charge for [5:56:34 PM ET] monthly subscription upfront embedded in vehicle price there's [5:56:40 PM ET] there's a whole host of really exciting and interesting opportunities [5:56:46 PM ET] but but like any marketplace it's gonna be market driven [5:56:46 PM ET] and so we'll you know we're watching it very closely [5:56:52 PM ET] but i i'd say if i were to say one the guide on one thing i'd say it's gonna be dynamic [5:56:52 PM ET] it's not it's not gonna be the same for for ten years it's gonna it's gonna change as the market evolves [5:56:58 PM ET] yeah [5:57:04 PM ET] thank you [5:57:04 PM ET] our last question comes from andrew percoco with morgan stanley [5:57:10 PM ET] please unmute yourself and ask your question [5:57:16 PM ET] thanks so much [5:57:16 PM ET] evening everyone i'll just reiterate all my [5:57:22 PM ET] peer's comments claire been great working with you and i know you've a good [5:57:28 PM ET] opportunity in front of you so best of luck and and derek hope [5:57:28 PM ET] looking forward to working more with you going forward [5:57:34 PM ET] you know maybe just one follow-up question for for me and around [5:57:40 PM ET] the r one seems like [5:57:40 PM ET] you know just based on what you guys have disclosed the r two volumes were [5:57:46 PM ET] guess close to nearly double r one and it's clear it's outselling the r one [5:57:46 PM ET] which i i would assume is was the you know [5:57:52 PM ET] intention with with the vehicle but i i'm curious [5:57:58 PM ET] how you're thinking about positioning the r one [5:57:58 PM ET] over time and i know you've gotten asked about this before and obviously there's clear [5:58:04 PM ET] value in having that vehicle in the portfolio but from a pricing [5:58:10 PM ET] do you think that there's an opportunity [5:58:10 PM ET] over time to maybe lower the price point as you start to leverage [5:58:16 PM ET] some of the scale and supply chain benefits from the r two to make [5:58:22 PM ET] the r one maybe a little bit more in line with some of the other three row [5:58:28 PM ET] suvs we see in the market from a pricing standpoint just [5:58:28 PM ET] curious you know medium long term view on how you're thinking about positioning the product from a pricing standpoint [5:58:34 PM ET] to maybe leverage some scale and and get some incremental volume on the r one over time [5:58:34 PM ET] thank you [5:58:40 PM ET] thanks andrew derek referenced in his opening remarks [5:58:40 PM ET] but just to [5:58:46 PM ET] state and to make sure it's clear we we we actually expect the r one [5:58:46 PM ET] pricing [5:58:52 PM ET] to to go up a bit and so not the price i'm [5:58:52 PM ET] say the average selling price to go up and it's really [5:58:58 PM ET] strategic we we removed what we call our standard trim for r one [5:59:04 PM ET] and have intentionally moved the product a bit upmarket [5:59:04 PM ET] and [5:59:10 PM ET] really doing that because of where our two sits in terms of pricing [5:59:10 PM ET] and [5:59:16 PM ET] as we think about the how it sits within the portfolio this is a flagship product so it's [5:59:16 PM ET] you know the the highest spectrum it's got over a thousand horsepower it's [5:59:22 PM ET] extremely capable on road extremely capable off road [5:59:22 PM ET] the tri motor is also you know incredibly capable you know it's [5:59:28 PM ET] more than eight hundred more than eight hundred horsepower extremely capable [5:59:34 PM ET] and so by virtue of the quad the tri and the performance dual that we have on that [5:59:40 PM ET] we very thoughtfully have moved it up market to really fill that [5:59:40 PM ET] place as a flagship product [5:59:46 PM ET] and so that was intentional and and we're now seeing the results of that and and derek referenced [5:59:46 PM ET] it in terms of [5:59:46 PM ET] you know when you look at revenue per unit of the quarter [5:59:52 PM ET] now with that its objective is not to be a high volume product [5:59:58 PM ET] it's it's not trying to compete in the [5:59:58 PM ET] in like the low priced or lower priced segment of of [6:00:04 PM ET] two or three road vehicles it's it's it's working to be much more of a premium vehicle [6:00:10 PM ET] as i describe it the capabilities and the features are set up as such [6:00:10 PM ET] understood okay thanks so much i'll leave it there [6:00:16 PM ET] okay well great everybody for joining us [6:00:22 PM ET] on this call and and appreciate the time we're and hopefully as you could see we're really excited about what's in [6:00:28 PM ET] of us we're excited about the the continued ramp up of r two [6:00:28 PM ET] you know in looking at the [6:00:34 PM ET] additional volume we'll be building in in q4 and then [6:00:34 PM ET] into into next year [6:00:40 PM ET] i think along with that really excited for for what's to come with the [6:00:46 PM ET] autonomy we spent a lot of time today talking about it i'm i'm encouraged by the level of interest that [6:00:46 PM ET] that that there is around our point to point capability [6:00:52 PM ET] and looking forward to showing a lot more about that [6:00:52 PM ET] talking about that as well as other aspects of our technology portfolio [6:00:58 PM ET] at our upcoming autonomy and ai day [6:00:58 PM ET] with that thank you all for joining us and [6:00:58 PM ET] look forward to our next call -- Saidwire · verified quotes, live transcript and a running story from live events · support@saidwire.com