“If you were to think of the Venn diagrams with customers, there's probably not a lot of overlap,” he told the audience at Code Conference 2023 late Tuesday. "But I think it's great that a product like that exists in the world. If we truly want to electrify everything that's produced – to give us some scale – there's one and a half billion cars on the planet, and we as a planet produce 90 million a year."
Investors appreciated the bullishness — shares popped 2% in pre-market trading on Wednesday. Rivian's ticker page on Yahoo Finance is seeing outsized interest, too.
The CEO's upbeat comments come as Rivian has been fighting an uphill battle in a capital-intensive, competitive space. Company shares got a boost earlier this year after Rivian deployed its first vans in Europe for key partner Amazon (AMZN). In July, Amazon added its 5,000th Rivian van to its electric delivery truck fleet. But, for some on Wall Street, there’s still concern about margins.
“We don’t expect Rivian to generate positive gross margins for some time, but we think the Amazon supply agreement should help it generate stable cash flow over the next few years,” wrote CFRA analyst Garrett Nelson, who rates the stock a Sell, on Sept. 23.
While there is a path forward on margins for Rivian, the company might need new capital — and soon.
“We believe Rivian can get to gross margin positive in 4Q24 (6.5% about inline with consensus) and they have the cash runway until then,” UBS analyst Joseph Spak wrote on Sept. 12. “However, we forecast $5 billion in new capital in 2025 could be needed to fund the next leg of growth.”
In the meantime, Rivian’s partnership with Amazon will remain key — as will the diversity of the company's customer base.
"We have the consumer side of the business and then, as you noted, the commercial side ... with Amazon," said Scaringe. "Being able to have that large single customer to start allowed us to think about more than just the vehicle, but how that extends into ... Amazon's business."
Rivian shares are up about 28% year to date.