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Rivian retools in quest for first profit

STORY: :: Normal, Illinois

Rivian has made some big changes in a drive to cut costs and turn its first profit.

The electric-vehicle maker has removed over 500 parts from the design of its flagship SUVs and pickups…

And over 100 steps in the battery-making process.

CEO RJ Scaringe says the retooling of its manufacturing process adds up to a 35% reduction in cost of materials for vans… with similar savings for other lines.

“And while we took a lot of content out in terms of part count, or part simplification, really that wasn't something that's customer-facing. The customer-facing aspects of the vehicle are a lot better."

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Reuters got an exclusive look inside Rivian’s Illinois factory at a time when cost cutting is critical for Rivian and other EV startups.

High interest rates are turning some potential customers off EVs, which are usually more expensive to buy than gas-powered vehicles.

Market leader Tesla has slashed prices, but some smaller EV makers have filed for bankruptcy.

Rivian is on more solid financial ground but it’s never turned a quarterly net profit since its founding in 2009.

It lost $1.5 billion in the first quarter.

And loses almost $39,000 on every vehicle.

Investors are keen to know more about the size and pace of savings after a three-week shutdown in April.

Rivian says it’s banking on cost savings to turn a gross profit this year.

SCARINGE: "It's really important that these vehicles are profitable.”

In addition to simplified assembly, the second generation of Rivian's R1 vehicles have company-built drive units, upgraded software and new battery packs.

Vice President of Manufacturing Tim Fallon:

“….we've really been able to understand what we need to do to continue to move forward, and really be smarter about what we're doing and not just brute force our way into it.”

Rivian is aiming to make 57,000 vehicles this year, almost the same as last year.

Shares in the company have halved this year, and cash and short-term investments fell by about $1.5 billion in the first quarter.

Rivian has said it has enough capital to launch the less expensive and smaller R2 SUVs in early 2026... with a price tag of $45,000.

One expert told Reuters he believed reducing the cost per vehicle would give Rivian some breathing room... and could calm the fears of some investors.