- Rivian keeps reducing the manufacturing costs for its EVs.
- In just six months, the startup slashed over $50,000 from its automotive cost of goods sold per vehicle delivered.
- This helped it make a gross profit for the second quarter in a row.
Rivian just posted its second quarter in a row with a positive gross profit of $206 million. That’s great news for any startup, let alone one that’s dealing with the turmoil caused by the on-again, off-again tariff saga.
It’s worth noting that Rivian is still in the red overall, with a net loss of $541 million for the first quarter of this year. But it’s clear that things are moving in the right direction. One of the reasons for the growth is Rivian’s ability to constantly reduce the manufacturing costs for its vehicles.
We’re talking about tens of thousands of dollars for each vehicle sold, so things add up quickly. Rivian said it managed to reduce the automotive cost of goods sold per vehicle delivered in the first quarter by over $22,600, compared to the same period last year.
The cost reduction comes after an even more impressive cut of $31,000 per vehicle in the fourth quarter of last year, compared to the same period in 2023. In other words, the California EV startup managed to cut its vehicle manufacturing costs by over $53,000 in just six months.
Earlier this year, Rivian said the cost savings came primarily from all the technological enhancements applied to the refreshed R1S and R1T, as well as ongoing negotiations with parts suppliers. The 2025 Rivian R1T and R1S feature a new zonal architecture for the electronics that enabled the automaker to cut 1.6 miles of internal wiring.
Photo by: Rivian
Rivian R2 validation units are being assembled on the prototype line at the company’s plant in Normal, Illinois.
It’s worth noting that all these manufacturing cost reductions did not have an impact on the selling price of Rivian’s EVs, but they did help the startup spend less and earn more, which is how a business essentially works. If it wants to survive and thrive, Rivian needs to eliminate net losses and become profitable sooner rather than later.
If everything goes to plan, this could happen as early as next year, when the smaller, more affordable R2 SUV will go on sale in the United States. With an estimated starting price of $45,000, the R2 will be almost half the price of the larger R1S, opening up a new customer base for the startup. Meanwhile, the even smaller and cheaper R3 is expected to go into production in 2028 at the earliest.