Rivian (RIVN) made a ‘secret’ deal with the UAW: Here’s what that means for the EV maker
Rivian (RIVN) has reportedly agreed to a “secret” deal with the UAW as it works toward its next growth phase. The new agreement is contingent on the EV maker reaching profitability. Here’s what you need to know.
What the private UAW deal means for Rivian
Under the confidential deal, Rivian would opt for a neutral stance on unionizing efforts at its Normal, Illinois, manufacturing plant.
According to sources close to the matter (via Bloomberg), the deal is based on Rivian hitting specific targets, including reaching profitability. The private agreement could pave the way for the UAW to unionize workers in Normal.
Rivian has yet to post a quarterly profit on an adjusted basis. The EV maker posted a net loss of $1.1 billion in the third quarter, down from the $1.34 billion loss in Q3 2023. CFO Claire McDonough reiterated that Rivian is still on track to reach a positive gross profit in the fourth quarter.
CEO RJ Scaringe said the company is seeing “meaningful progress” on reducing costs after shutting down its Normal plant in April for upgrades.
| Q3 ’22 | Q4 ’22 | Q1 ’23 | Q2 ’23 | Q3 ’23 | Q4 ’23 | Q1 ’24 | Q2 ’24 | Q3 ’24 | |
| Rivian loss per vehicle | $139,277 | $124,162 | $67,329 | $32,594 | $30,500 | $43,372 | $38,784 | $32,705 | $39,130 |
The secret UAW deal also reportedly helped Rivian secure its recent $6.6 billion conditional loan from the US Department of Energy. The loan will help fund Rivian’s new manufacturing plant in Georgia, where it will build its more affordable R2. However, the loan is also based on the EV maker reaching certain financial metrics and other requirements.
Ramping EV production
Rivian builds its current R1S SUV and R1T electric pickup in Normal with plans to begin R2 production in 2026. Although the smaller, more affordable EV will initially be built in IL, Rivian plans to significantly expand output with the new plant in GA.
The EV maker expects to build between 47,000 and 49,000 vehicles this year. After upgrading the facility earlier this year, Rivian said it can build up to 150,000 EVs a year in Normal.
When R2 launches in 2026, Rivian expects annual production capacity to be around 215,000, 155,000 of which will be the R2. After its GA plant opens, Rivian expects to add another 400,000 to that number.
According to Bloomberg, Rivian has been “a longtime target for the UAW.” If the deal goes through, workers in Normal would have more say over matters such as pay and working conditions.
The UAW targetting Rivian is part of its broader plans to unionize the EV industry. As more details unfold, the deal could mark a significant step in its efforts, potentially setting Rivian apart from rivals like Tesla.
Last month, Rivian and Volkswagen officially launched their new joint venture, “Rivian and VW Group Technology, LLC.” The partnership will use Rivian’s expertise to develop a next-gen EV architecture and “best-in-class software” for both companies’ future EV models.
Scaringe said the collaboration is a “landmark development for the industry.” Volkswagen plans to invest up to $5.8 billion in Rivian and the new JV, which Scaringe calls “a meaningful financial opportunity.”
Rivian’s stock is up around 33% since reporting Q3 earnings on November 7, but share prices are still down 37% in 2024.
The post Rivian (RIVN) made a ‘secret’ deal with the UAW: Here’s what that means for the EV maker appeared first on Cars News Magazine.
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