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Rivian: Q2 earnings takeaways

Yahoo Finance's Pras Subramanian breaks down Rivian earnings, production, Q2 loss, and the outlook for the stock.

Video transcript

BRIAN CHEUNG: Rivian reporting earnings yesterday. And we listened in to the call to bring you the good, the bad, and the questionable. Joining us now for all three of those things, Yahoo Finance's Pras Subramanian. And you know, we talked about this after the bell yesterday. A very closely watched report. They're experiencing supply-chain issues. The backlog is still very much there. And a big loss getting a lot of attention in that report as well.

PRAS SUBRAMANIAN: Yeah, I mean, I kind of see it as the good, the bad, and somewhat unknown, right? We're talking about good stuff, right? Maintain that production forecast, 25,000 vehicles, rising revenue that they reported, adding a second shift next quarter, 98,000 pre-orders.

The bad, that $1.7 billion loss for the quarter. They're seeing-- they see that their full year adjusted EBITDA loss expanding to $5.45 billion for the year. I mean, these are huge, staggering numbers. Negative net margins still like over 100%. So this stuff is really kind of problematic.

And then the unknown, right? So talk about the factory has a install capacity they want to keep expanding. They're saying that they can't tell us when they can get to that level of 150 to 200,000 vehicles a year. They can't tell us what their weekly production is because it's so-- it varies so much week to week because of parts orders.

So a lot of uncertainty there with the growth of the company. But some good stuff, too, right? Because the demand for the product is still there. They just can't make it fast enough.

BRIAN CHEUNG: Yeah, well, I mean, I guess that begs the question though, right? 25,000 vehicles is for the year--

PRAS SUBRAMANIAN: Yeah--

BRIAN CHEUNG: --that their--

PRAS SUBRAMANIAN: --the year.

BRIAN CHEUNG: --target is, right? They had 4,400, as we're showing on the full screen now, produced in the second quarter. How optimistic is that 25,000, though? Because a lot of that is going to depend on whether or not they could get the chips and everything else, which continues to be a supply-chain issue not just for Rivian but for all automakers.

PRAS SUBRAMANIAN: They're gonna make some like 19,000 vehicles in the next six months. And RJ Scaringe, CEO, is asked a couple of times in the call, is this realistic? And he said, yes, it is. We can do this, even though I can't tell you how much we're gonna make week to week. I can tell you that we're gonna hit that target.

So he's optimistic. It sounds like they're able to-- it's an issue of getting the parts. And I think they've sort of solved that issue. They're getting more and more of their suppliers to bring their stuff in-- on line faster. So I think they're confident that they can do it.

BRIAN CHEUNG: And then quickly, about the F-150 Lightning, right? We've seen price increases for that. Rivian trying to make a play on the reverse end by trying to get people to perhaps get on to the reservation list, guaranteeing them that credit before it perhaps gets thrown away as part of the Inflation Reduction Act that we were talking about. How do you think that impacts Rivian's backlog?

PRAS SUBRAMANIAN: So you know, we talked about how that 98,000 pre-order was as of June 30, right? I have to imagine they got a lot more after last week when-- before this the IRA is going to be signed, because they were also not only talking about, you know, this happening, but also here's a way to actually get around that. Sign this purchase agreement, pay $100 nonrefundable as a consideration. And we'll see what we can do to get you that tax credit in full later on.

BRIAN CHEUNG: All right, Yahoo Finance's Pras Subramanian, thanks so much.