Gary Black Critiques Rivian's Earnings and Future Guidance

Rivian Automotive Inc. (NASDAQ:RIVN) saw its shares increase by more than 5% in after-hours trading on Wednesday before experiencing a slight pullback. This movement occurred even though the electric vehicle manufacturer provided conservative guidance for 2025. The rise in stock price was attributed to strong sales of regulatory credits, which helped Rivian exceed expectations for its fourth-quarter earnings.

What Happened: Gary Black, Managing Partner at The Future Fund, took to social media platform X to express his surprise at the positive market reaction. He pointed out that the notable increase in gross profit for the fourth quarter was largely due to one-time sales of regulatory credits, describing the company's guidance for fiscal year 2025 as "clearly weak."

In its quarterly report, Rivian announced record revenue of $1.73 billion, which was higher than the analysts' forecast of $1.4 billion. Additionally, the company reported an adjusted loss of 46 cents per share, which was better than the anticipated 65-cent loss. Its gross profit for the quarter reached $170 million, benefiting significantly from regulatory credit sales totaling $299 million.

In the aftermath of the earnings release, Black remarked: "$RIVN (+5% post market) posted better than expected 4Q revs and gross profit ($170M vs $64M exp) driven by huge one-time sales of reg credits ($299M). FY'25 guidance was light on deliveries 46K-51K vs 54.9K exp, and adj EBITDA was at the low end of expectations (-$1.7B to -$1.9B)."

Rivian's CEO, RJ Scaringe, highlighted the company's efforts in improving cost efficiency, stating, "This quarter we achieved positive gross profit and removed $31,000 in automotive cost of goods sold per vehicle delivered in Q4 2024 relative to Q4 2023. Our focus on cost efficiency across the business is critical for the launch of our mass market product."

Despite Rivian's positive quarterly results, its outlook for 2025 was disappointing for some Wall Street analysts. The company is projecting vehicle deliveries between 46,000 and 51,000, which falls short of the analysts' consensus estimate of 54,900. Additionally, Rivian anticipates adjusted EBITDA losses ranging from $1.7 billion to $1.9 billion and expects only modest gross profits for the coming year.

Why It Matters: This cautious guidance comes against the backdrop of ongoing scrutiny regarding Rivian's $6.6 billion federal loan intended for its manufacturing facility in Georgia. The loan is currently under review by the administration of President Donald Trump. This plant is crucial to Rivian's strategy, as it is set to produce the more affordable R2 and R3 models, with a projected annual production capacity of 400,000 electric vehicles by 2028.

Rivian has made several strategic moves lately, including finalizing a joint venture with Volkswagen AG worth up to $5.8 billion and expanding its commercial electric van sales beyond Amazon.com Inc.

Price Action: Rivian shares closed at $13.61, marking a 2.30% decrease. In after-hours trading, the stock increased by 0.44%. Year-to-date, the stock has risen 2.72%, but it has experienced a decline of 14.35% over the past year, according to market data.

Rivian, Earnings, Volkswagen