EV makers Rivian, Lucid face challenges amid Q3 results
Brand new Lucid electric cars are parked outside the Lucid Studio showroom in San Francisco on May 24, 2024.
Justin Sullivan | Getty Images
DETROIT — Challenges mount for all-electric vehicle manufacturers Rivian Automotive And Lucid Group companies are trying to sell investors a brighter, more profitable future.
But things could get worse before they get better, as both automakers are set to report third-quarter results this week, starting with Rivian after the bell on Tuesday and Lucid on Wednesday.
Both “pure EV” companies are expected to report significant revenue growth due to record third-quarter U.S. EV sales, narrowing their adjusted earnings losses. But investors also expect producers to provide updates on future growth opportunities and the impact of more challenging market conditions.
“Both of these are really in dire straits,” RBC Capital Markets analyst Tom Narayan told CNBC during an interview, saying he was cautious about near-term upside for investors. “To me, it’s all about underlying profitability.”
While both automakers have already lowered their vehicle production forecasts due to tougher market conditions, Rivian also negatively revised its adjusted earnings and gross profit expectations for 2025.
Electric vehicle manufacturers face industry-wide issues, such as rising costs due to tariffs and slowing projected electric vehicle sales, as well as company-specific issues involving new product challenges and regulatory changes that negatively impact sales and profits, including the end of consumer federal incentives.
Rivian, Lucid and Tesla shares in 2025
The Trump administration this fall got rid of federal incentives of up to $7,500 for electric vehicle purchases. In addition, the practice of fining automakers for not complying with fuel efficiency rules has been discontinued. This hurts EV makers who are considering selling credits to legacy automakers that could offset some penalties.
Rivian cut its expected earnings from credit sales this summer from $300 million to $160 million. In conjunction with the change, Rivian also lowered its gross profit target for the year from a modest profit to roughly breakeven. It also made layoffs this year to cut costs.
“While we believe deeply in the long-term value drivers of our business, the policy environment continues to be complex and rapidly evolving,” Rivian CEO RJ Scaringe said at the company’s last quarterly results call in August. “Changes in EV tax credits, regulatory credits, trade regulations and tariffs are expected to have an impact on the results and cash flows of our business.”
Rivian maintained that it had enough money to launch the new “R2” product in the first half of next year, but the ongoing changes did not help the company in any way.
Rivian said tariffs hit the automaker this year at “several thousand dollars per unit.” Lucid also said tariff costs hurt its profit margins this year, including $54 million in the second quarter.
“We expect the loan loss to have a negative impact on the market in the coming quarters. Our previous analysis of demand elasticity indicates that the IRA loss will [Inflation Reduction Act] Goldman Sachs analyst Mark Delaney said in an Oct. 3 investor note on Rivian and Tesla that credits could equate to a double-digit percent headwind on industry volumes, all else being equal.
Tesla’sThe company, which also sells automotive regulatory loans, reported that revenue from those loans fell 44% in the third quarter, from $739 million to $417 million.
Go ahead, third quarter results
The third quarter is expected to be the peak of EV sales for the foreseeable future as customers rush. Buy new models before federal loans expire in September.
As a result, companies are expected to spend more time pitching future products and technology opportunities to investors during third-quarter calls this week, rather than their short-term core business of producing and selling electric vehicles.
Rivian R1R electric truck at the Everything Electric show on Friday, September 5, 2025 in Vancouver, British Columbia, Canada.
Paige Taylor White | Bloomberg | Getty Images
“It remains to be seen how long the EV recession in the US will last, but we suspect Q3 EV penetration will be the highest for a long time,” Barclays analyst Dan Levy said in an Oct. 13 investor note.
Rivian last month reported vehicle deliveries of 13,201 vehicles in the third quarter; This means a 32% increase compared to the previous year. Lucid reported deliveries of 4,078 units, up 47% from 2,781 units delivered in the third quarter of 2024.
Despite the increase in sales, both companies are expected to report significant losses, though narrower than a year ago and smaller than in the second quarter.
Rivian is expected to report an adjusted earnings per share loss of 72 cents on revenue of $1.5 billion, according to average analyst estimates compiled by LSEG. This compares with a year-ago adjusted earnings per share loss of 99 cents on revenue of $874 million.
Rivian said in announcing second-quarter results that it expects adjusted core loss to be between $2 billion and $2.25 billion this year. This figure was below the previous estimate of $1.7 billion to $1.9 billion. Analysts also raised concerns about Rivian’s previous goal of being profitable on an earnings before interest, taxes, depreciation and amortization basis by 2027.
Lucid is expected to report an adjusted earnings per share loss of $2.27 for the third quarter, down from $2.80 a year ago (based on recalculated results following the reverse stock split), and a roughly 90% increase in revenue to $379.1 million, according to LSEG.
Narayan and other analysts have largely focused on improvements in companies’ gross profits as evidence of progress. Such results are an important indicator of a business’s profitability before operating expenses, interest and taxes.
“[Investors] “They’ll want to see what the Q3 gross profit number is, but they also have a high bar to clear where there’s already consensus,” Narayan said.
Rivian is expected to report a gross loss of $39 million in the third quarter, according to average estimates compiled by FactSet. Meanwhile, Lucid is expected to report a gross loss of $255 million, according to estimates.
Rivian shares have lost less than 5% this year, while Lucid’s shares have lost nearly 45%, including a 10-for-1 reverse stock split in September.
Product and technology promises
Both Rivian and Lucid have attempted to sell technologies as well as the success of their future vehicles to investors to save the companies from ongoing losses.
Rivian’s future depends largely on its new “R2” vehicles, which are expected to begin production for customers in the first half of next year. The mid-size vehicle, valued at about $45,000 per Rivian, is expected to halve construction material costs, reduce manufacturing complexity and significantly increase demand and sales.
Rivian CEO RJ Scaringe reacts at an event to unveil a smaller R2 SUV in Laguna Beach, California, on March 7, 2024.
Mike Blake | Reuters
“I’m more optimistic about this vehicle than any product we’ve developed. I believe the market fit of the product is incredible. The packaging, technology and overall value proposition have set the R2 up for meaningful share,” Scaringe said in August.
However, the R2 will be launched in a tough market with a lot of vehicle competition; many of these are expected to have longer EV ranges at a similar, if not lower, price.
Barclay’s Levy conducted an analysis of R2’s potential total addressable market earlier this year and questioned the company’s bullish sentiment on the product due to “risks” related to expected weak electric vehicle demand in the U.S., additional costs and a more competitive market.
Narayan and other analysts have also questioned the company’s sales targets for the vehicle: “This is a very competitive market and the EV slowdown is in full force. What will the volumes they will achieve on the R2 against all this competition? … [General Motors] “We can barely reach hundreds of thousands,” Narayan said in the interview.
Rivian has also touted the potential to generate revenue through new technologies, such as its $5.8 billion deal with Volkswagen for software and electrical architecture.
Rivian said the next-generation technology is expected to help it become a leader in advanced driver assistance systems, or ADAS, although the automaker is pursuing many other systems.
Teaser image courtesy of Lucid of the mid-size vehicle behind the current Gravity SUV.
Lucid
The story is similar in Lucid. Apart from the launch of the Gravity SUV, which Lucid described as formidable, the company has placed great emphasis on the launch of its future mid-size vehicle platform to expand its market reach.
“We’re not just building electric vehicles. We’re pushing the boundaries of electric vehicles,” Lucid’s interim CEO Marc Winterhoff said during the company’s second quarter call in August. “From the record-breaking performance and efficiency of Lucid Air to the game-changing Lucid Gravity and our upcoming midrange platform, our technology continues to redefine what is possible.”
More recently, Lucid has touted future ADAS technologies and the potential for personal autonomous vehicle capabilities as part of its future, despite a lackluster track record of capability in its current luxury models.
Lucid signed a $300 million deal Uber In July, this included the ride-hailing platform acquiring and deploying more than 20,000 Lucid Gravity SUVs that will be equipped with Nuro’s autonomous vehicle technology over the next six years.
Other topics investors will watch will include updates to the timeline for Rivian’s R2 production or Lucid’s Gravity SUV production, as well as cash flows and profitability outlooks for both companies.
“We are not where we want to be with Lucid Gravity production relative to our goal at this point in the year,” Winterhoff said in August. “We believe that we will significantly increase production” [in] in the second half of the year.”
