At the recent Q2 financial report conference, Rivian's management discussed the significant progress the company has made in electric vehicle technology, autonomous driving platform, and production readiness. They emphasized confidence in future products and market share, while also mentioning external environmental changes such as policy adjustments, tariffs, and trade regulations affecting business results and cash flow. Despite facing challenges, Rivian remains committed to efficiently expanding manufacturing capabilities and technology development in the United States to achieve the goal of delivering millions of vehicles annually.

Rivian Automotive is currently in the design validation stage, building its truei vehicle model to verify overall vehicle performance and supplier collaboration effectiveness. At the same time, the company is constructing and installing new manufacturing facilities to support manufacturing validation builds. In terms of technology, Rivian is focusing on the development of AI and autonomous driving platforms, utilizing high-quality sensor data and large-scale data collection to lead the field of autonomous driving in the near future. Additionally, the company has launched a new four-motor model R1 Quad, receiving positive feedback. The company plans to hold an AI and Autonomous Driving Day at the end of the year, sharing its progress on the R2 model and autonomous driving platform, and looking forward to achieving long-term scalability potential.

In the second quarter, the company produced and delivered 5,979 and 10,661 vehicles respectively, with revenue of $927 million, and a loss of $335 million in the automotive business. The software and services department performed well, with revenue of $376 million and a profit of $129 million. Overall revenue was $1.3 billion, with a loss of $206 million. Adjusted EBITDA loss was $667 million. The company received a $1 billion investment from Volkswagen Group and issued $1.25 billion in green bonds. They expect to deliver between 40,000 and 46,000 vehicles in 2025, with capital expenditures of $1.8 billion to $1.9 billion.

The discussion focused on the goal of reducing costs by more than half during the transition from R1 to R2. The main focus is on which costs in R1 will be cut, and how to achieve the necessary cost savings in R2 through procurement and contract strategies to ensure economic benefits.

The dialogue detailed the cost control strategies of the R2 model, including reducing material costs and simplifying assembly processes. By negotiating contracts with suppliers, the goal of halving material costs was achieved. At the same time, optimization of design and manufacturing processes is expected to greatly reduce conversion costs. These measures together supported a significant price reduction of the R2 model while maintaining brand commitments. Although smaller than the R1 model, the R2 has adjustments in performance and features to maximize cost-effectiveness.

The company is facing policy changes and market challenges, such as a lower regulatory credit environment and tariff issues, and is taking multiple cost efficiency measures to achieve the EBITDA breakeven target for 2027. These measures include software and technology collaboration with Volkswagen Group, as well as continued investment and development in vehicle software and autonomous driving technology to seek more software and technology licensing opportunities. In addition, the company is demonstrating progress in advanced autonomous driving capabilities through its powerful data training flywheel and sensor technology, opening up new partnership opportunities for long-term development.

Discussed the usage of the $6.6 billion loan from the Department of Energy, inquiring whether the loan has been drawn down and potential scenarios where the loan may not be drawn down in the future. Also mentioned that there have been fewer updates on capital expenditures in the shareholders' letter, and asked about the current status of loan utilization and future plans.

The conversation revolves around Rivian's plans to use Department of Energy loans to accelerate the construction of the Georgia factory, while also mentioning the spin-off of Rivian's micro-mobility business entity 'Also Inc.' in March of this year. Also Inc. has enormous market potential and has already attracted key talent. Rivian holds nearly half of the shares of Also Inc., and both sides share technology, paving the way for future cooperation in the field of electrification.

The reasons for the increase in the cost of each Rivian vehicle were discussed, mainly attributed to the decrease in production volume leading to insufficient spread of fixed costs, as well as an increase in costs related to tariffs. Despite the higher costs in Q1, the future R2 model is expected to reduce costs by over 50% through sharing resources and improving production efficiency.

The discussion covered Rivian's leadership position in the electric vehicle market, especially in the high-end SUV and commercial truck sectors. The third quarter is expected to be the strongest sales season, despite potential pricing strategy adjustments due to reduced IRA subsidies, Rivian's R1 series ASP is expected to remain strong. In addition, the increase in commercial truck deliveries will impact overall ASP, but will not weaken Rivian's market competitiveness.

Discussed the various challenges encountered in achieving the EBITDA target in 2027, including changes in tariff structures, reduced credit sales of electric vehicles, and other short-term unfavorable factors. Despite facing these challenges, the company still believes that the positive value target for 2027 can be achieved through measures such as optimizing cost structures, joint procurement of electronic components, and deepening cooperation with suppliers. In the long term, competition in the electric vehicle market will stabilize, reducing the incentives for new entrants, which will be beneficial for achieving the target.

The discussion focused on the expected significant growth in the software and services sector, particularly in relation to the background IP revenue growth associated with joint project progress, as well as the design of the R2 model to achieve a healthy, positive gross margin, even without IRA credits, in order to generate profits. In addition, it was mentioned that contributions to the EBITDA target could be made through expanding the automobile park, increasing used car sales, expanding the charging network, financing service infrastructure, insurance, and future autonomous status.

The discussion in the meeting focused on the impact of policy changes on the 2027 EBITDA target, particularly in terms of changes in tariffs and regulatory credits. It was pointed out that due to recent adjustments in the regulatory credit program, it is no longer expected to generate revenue through sales of regulatory credits in the second quarter, which is different from previous expectations. Additionally, the second quarter performance and supply chain complexities have restricted production volumes, affecting overall guidance. Despite increasing policy-related challenges, the company remains committed to achieving its positive EBITDA target through cost efficiency improvements and efficient onboarding of R2.

Discussed the current factory production capacity utilization and future expansion plans, emphasizing the importance of increasing production capacity utilization to initiate the construction of the new factory in Georgia, while also mentioning that the new factory will increase output and expand product lines.

The dialogue revolved around the market positioning, production plans, and autonomous driving technology of the Tesla R2 model. The speaker emphasized the market adaptability of the R2 model in terms of price, functionality, and design, expecting it to cover a wide market. Regarding autonomous driving technology, the speaker supported an early sensor fusion approach based on AI, believing that this can provide a more comprehensive environmental perception, superior to relying on a single sensor. At the same time, the speaker mentioned that technological advancements allow for improvements in sensor quality without the need to reset the model, enhancing the vehicle's decision-making capabilities.

The dialogue discussed the significant growth in software and service revenue, particularly the impact of Rivian's remarketing plan, expansion of service infrastructure, and opening of the charging network. It emphasized the contribution of non-joint venture companies to the total profit of the business segment, and predicted that by 2027, joint ventures will contribute even more due to an increase in income flow related to intellectual property.

In the discussion, the Rivian team emphasized the importance of continuous expansion of the team and internal services to support future business growth, especially in the contribution of 2027. Regarding the economic benefits of the R2 model, they pointed out that due to lower material costs and leveraging the fixed cost base of the existing Normal factory, the R2 model is able to achieve positive profit growth faster. It is expected that by the end of 2026, the R2 model will achieve positive gross profit and further enhance efficiency by increasing the third shift and continuously reducing cost structure. One key strategic reason for choosing to produce the R2 model at the Normal factory is to achieve a fixed cost sharing between the R1 and R2 models, giving a cost advantage in the early stages of production. Additionally, some assets that Archer will utilize, such as sampling operations, have already been put into use and partially depreciated, bringing additional fixed cost advantages to the Normal factory.

The discussion focuses on the changes in the Average Selling Price (ASP) of cars, particularly considering macroeconomic factors such as tariffs, the cancellation of tax exemptions, and the sales situation of product lines such as RI and R2. It is mentioned that the increase in sales of more commercial vehicles in the second half of the year will have an impact on the overall ASP. However, the ASP of the R1 series is expected to increase due to strong demand and optimized product configurations. It also emphasizes the pricing strategies and target markets for different versions of the R2 series.

The discussion focuses on the company's deep investment in and future planning for autonomous driving technology. The company employs an AI-driven end-to-end approach, using high-precision sensors, powerful onboard computing capabilities, and extensive data collection to build robust models with the goal of achieving a wider range of driving scenarios, including hands-free operation on highways and future hands-off operation. In addition, potential commercial applications of this technology are mentioned, such as commercial autonomous driving, showcasing its wide market potential and customer experience improvements.

The dialogue discussed the market strategy of the R2 electric vehicle, emphasizing its uniqueness and attractiveness, aiming to attract non-electric vehicle users. The R1S has been successful in California and Washington state, and the R2 is positioned in the price range of $45,000 to $55,000, offering outstanding performance and features. In addition, progress and attractiveness in the commercial vehicle sector were mentioned, but specific details were not provided.

The speaker emphasized the importance of close cooperation with Amazon, pointing out that Amazon is not only a major shareholder but also an excellent partner. They are jointly committed to improving and fine-tuning vehicles to meet the needs of logistics and commercial deliveries, believing that the developed vehicle platform is the best logistics solution. As more vehicles are delivered, they look forward to other fleets choosing this platform in the electrification process. At the same time, the speaker expressed great confidence in the R1 and R2 vehicle projects, highlighting good progress in cost structure, development status, and supplier cooperation, as well as continuous advancements in autonomous driving technology, indicating the company's optimistic outlook on business prospects.