Good day, and thanks for standing by. Welcome to the Rivian First Quarter 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star one on your telephone. If you require any further assistance, please press star zero. As a reminder, this conference call is being recorded. I'd now like to turn the call over to Mr. Tim Bei, Vice President of Investor Relations. Please go ahead, sir. Good afternoon, and thank you for joining us for Rivian's first quarter 2022 earnings call. Joining us on today's call, we have RJ Scaringe, our Founder, Chairman, and Chief Executive Officer, and Claire McDonough, our Chief Financial Officer. A copy of today's shareholder letter is available on our investor relations website. Before we begin, I would like to remind you that during the course of this conference call, our comments and responses to your questions reflect management's views as of today and will include statements related to our business that are forward-looking statements under federal securities laws, including, without limitation, statements regarding our market opportunity, industry trends, business operations, strategy and goals, our second domestic manufacturing facility, our future products, including R2, and our expectations regarding vehicle deliveries. Actual results may differ materially from those contained in or implied by these forward-looking statements due to risks and uncertainties associated with our business. Except as may be required by law, Rivian does not have any obligation to update or revise such statements if circumstances change. For a discussion of the material risks and other important factors that could impact actual results, please refer to the cautionary statements and risk factors contained in our SEC filings and today's shareholder letter, which can be found on our website at rivian.com/investors. During this call, we will discuss both GAAP and non-GAAP financial measures. A reconciliation of GAAP to non-GAAP financial measures is provided in today's shareholder letter. With that, I'll turn the call over to RJ, who will begin with a few opening remarks. We're happy to be here with everyone today and look forward to discussing the progress we've been making. Just before the call, we published our shareholder letter, which includes an overview of our progress over the recent months. I encourage you to read it for additional details around some of the items we'll cover on today's call. As of May 9, we've produced approximately 5,000 vehicles since the start of production. We are now producing and delivering the R1T, R1S, and EDV 700, with the slightly narrower and shorter EDV 500 going through final production trials now. We've done all this in one of the most challenging operating environments in decades. We have $17 billion of cash and believe we have a clear path to launch R2 in Georgia in 2025 with our current cash on hand. Our goal is to build and scale a large business that addresses both the consumer and commercial markets. Our launch of the R1 and EDV products positions us to grow rapidly as we fully ramp the 150,000 units of installed capacity in our Normal, Illinois, manufacturing facility. We have a lot of work ahead, but the passion and endorsement we have seen from customers and third parties, such as being named MotorTrend's 2022 Truck of the Year, demonstrates the impact our team can drive as we remain laser-focused on ramping production and getting more vehicles on the road. With regard to our production, we are encouraged by the acceleration of our demonstrated production rate. Our plant is now achieving cycle times three times higher than the start of the year. These demonstrated production rates, which we expect to continue to increase, coupled with our current supply chain outlook, give us confidence in our ability to hit our targets for 2022. Equally important, demand continues to accelerate, and as of May 9, we had over 90,000 preorders for our R1 products in the U.S. and Canada. All of our orders have been attracted by organic growth and brand awareness and without any paid marketing or media. It is worth noting that since our March 1 price increase, we've received over 10,000 R1 preorders for the U.S. and Canadian market with an average price of over $93,000. These orders are in addition to the 100,000 commercial van order from Amazon. As we ramp production and deliveries of EDVs, we are excited about the impact that our close partnership with Amazon will have in the commercial vehicle space. As we've begun ramping deliveries, the feedback has been tremendous. One of my favorite parts of the week is when I sync with our customer engagement team and hear the feedback they're receiving around the vehicle, process, and the interactions with our team. We love seeing photos of our vehicles in the wild, enabling customers' adventures. Our core focus as an organization for 2022 is to get more R1s and EDVs on the road. The majority of our time is focused on ensuring our teams are driving towards ramping production and deliveries to customers. Core to this is addressing the supply constraints that we have dealt with thus far, and I'm very confident today in the relationships and associated commitment we have built with our suppliers. As we demonstrate our production ramp, our suppliers are leaning in to help ensure we can achieve our targets. Before handing off to Claire, I want to comment on our R2 program, which is being developed and planned for our Georgia facility. We are leveraging the many learnings from our R1 and RCV platforms, and we are working to ensure the R2 sets a high bar in terms of affordability, unit economics, performance, and efficiency. This global platform is critical for our long-term growth, with a lower price point to further expand our addressable market. R2 will also leverage many of the cross-platform technologies that will be incorporated into R1 and RCV platforms, including our single motor drive unit, which we call Enduro, and our next generation network architecture and associated family of ECUs. I couldn't be more excited about the ramp of the R1 and EDV vehicles, as well as the products, services, and technologies we have in the pipeline. With that, I'll hand it over to Claire. Thanks, RJ. I'll start with a review of our first quarter 2022 results. In Q1, we produced 2,053 vehicles and delivered 1,227 vehicles, which was the primary driver of the $95 million of revenue generated in the quarter. As we've discussed in the past, the volumes being produced on our manufacturing lines are a small fraction of our current 150,000 units of annual capacity. We generated negative gross profit of $502 million in the quarter. As we ramp production, we expect high fixed costs associated with running our large scale, highly vertically integrated facility will continue to impact our total gross profit. Our negative gross margin was impacted by inflation and the production of low quantities of vehicles on large scale production lines as we ramp. This includes the cost associated with expedited shipping expense, labor, and depreciation, as well as some accounting adjustments such as lower of cost or net realizable value, LCNRV. As discussed on prior calls, the LCNRV adjustment writes down the value of certain inventory to the amount we anticipate receiving upon vehicle sale after considering future costs necessary to ready the inventory for sale. As we ramp production, we expect to leverage our labor and other fixed costs to drive improved gross margin per vehicle. While our operations teams work diligently to ramp production of the R1T, R1S, and EDV-700, our customer engagement, service, and delivery teams are also accelerating efforts to enhance customer experience across the country. Additionally, our engineering and design teams continue to progress on our next generation in-vehicle technologies. Our vertically integrated approach is designed to drive long-term structural cost advantages as we expand our production and product roadmap. Our adjusted EBITDA for the first quarter was -$1.1 billion. We continue to strategically invest in our plant in Normal, Illinois, lab facilities, and service operations. We also expect to begin investing additional capital into our Georgia facility later this year. Our capital expenditures for the first quarter were $418 million. We ended the quarter with $17 billion of cash. While we operate a capital-intensive business, we have a high level of flexibility regarding the cadence of our growth investments. As RJ mentioned, our current priority is ramping the 150,000 units of R1 and EDV capacity to meet the tremendous demand we have for these products. We have optimized our product roadmap and associated operating expenses and believe we have a clear path to launch R2 in Georgia in 2025 with our current cash on hand. We are also reaffirming our 2022 full year guidance of 25,000 total vehicles produced. We anticipate a significant acceleration of production throughout the second half of the year as our demonstrated capacity improves and we accelerate the ramp-up of key shops. In addition, we're reaffirming our 2022 adjusted EBITDA guidance of -$4.75 billion and capital expenditure guidance of $2.6 billion. Our outlook does not assume a material change in the overall operating environment. Going forward, we plan to provide production and delivery results shortly after the quarter end. We will no longer be providing intra-quarter production and pre-order figures. In closing, I wanna thank our team, community, customers, and suppliers for another successful quarter. Thanks to our truly differentiated vehicle and technology platform, we're seeing such tremendous feedback and enthusiasm. We have a steep climb ahead of us, but I couldn't be more confident with the plan that we have and the path that we're on. With that, let me turn the call back to the operator to open the line for Q&A. Sure, ma'am. As a reminder, if you have a question at this time, please press star one on your telephone keypad. If your question has been answered or you wish to remove yourself from the queue, press the pound key. We'll pause for just a moment to compile Q&A roster. Your first question comes from the line of John Murphy with Bank of America. Your line's now open. Good evening, everybody. Just a first question around production versus deliveries in the quarter. You know, production is essentially almost 2x the deliveries. I'm just curious, you know, why there was such a gap between the two this quarter. If it's just a question of timing of you know vehicles in transit or what's going on there, 'cause traditionally, you know, because of the lack of a dealer network, we kind of assume they're gonna be a lot closer. Thanks, John. Yeah, as you said in the question, there is a gap between production and deliveries and it was just that, the timing effect of vehicles being built and being in transit and essentially prepped for delivery. As you said, given that we have a direct model where we sell vehicles directly to consumers, aligning up those customers, ensuring the delivery, creating a great customer experience, you know, there's always gonna be some separation between the total production number and the number of deliveries. Okay. It was nothing other than simply just processing, RJ? There's not like there's vehicles being held for any kind of quality or post-production inspection or anything like that? No. In fact, when we talk about production numbers, we're referring to is vehicles that are factory gated. These have gone through- Okay the full quality inspection process. Production numbers do not include any partially complete vehicles. These are fully ready to deliver to customer vehicles. Super helpful. One point that I would just add on to that question is that because of the rate at which we're ramping production, because we're continuously scaling week over week over week, there always will be that lag effect in regard to the vehicles that are ultimately in transit. It's something that will continue, but won't likely to be the same sort of percentage of produced vehicles relative to delivery. Got it. Then just a second question on the run rate of production. I mean, it seems like there's about 1,800 units that were produced from April first to May ninth roughly. I have to do some back-of-the-envelope math and just double it, that gets you to 3,600, but that doesn't even give you the benefit for the full quarter and the acceleration. It seems like you are on pace to hit at least, I mean, at least in our model, 4,000 units plus in the second quarter. Is that kind of reasoning about correct? I mean, just given that, you know, you're getting a good acceleration in production here, it seems like you might be even ahead of that. Should we think about it that way? Is there any tempering of parts specifically that might gate your ability to get there? Yeah, that's about the right way to look at it. I'd wanna point out a couple of things. We've seen the overall production rate continue to increase. In fact, our cycle time has seen a 300% or 3x improvement since the start of the year through the course of Q1, and we continue to see that production rate improvement as we go through quarter two here. You alluded to it, but we are in the midst of an S-curve. You know, the end of the quarter will be producing at a faster rate than the start of the quarter. You know, as we look at this quarter thus far, the plant's been able to outproduce our supply chain, and what gives us a lot of confidence as we look at the time ahead is the clear line of sight we have around the ramp-up of our supply chain and the close relationships we have with those key suppliers. Okay. Just the last question on pricing and the price increases. I mean, obviously, they're a result of input cost increases. Is there margin that goes along with these price increases? More specifically, maybe are you raising your prices exactly to what your cost is, or is it above that, so there's actually some you know, sort of parallel margin that's going along with it on a unit basis? Right. The way I would think about the margin opportunity that we have, and you'll really see this kick in from an inflection point as you think about the 2024 margin opportunity that we have, which brings together the combination of us really ramping and accelerating the production volumes within the plant, combined with the move from our sort of pre-March first pre-order cohort to our post-March first cohort. Embedded in that post-March first cohort, there is a true step change that you'll see in regard to the overall aggregate gross margins that you'll see within the business. The growth from a gross profit margin rate over time, it's not linear. It truly is a step change function as you think about us moving to this post March first cohort. As we talked about a bit in our shareholder letter as well, we're also now moving towards a reservation system versus the historical pre-order system that we've had, which allows us to have the customer configure their vehicle closer to the delivery date, which enables us to understand, right, the dynamics within the inflationary market at that time, but also importantly ensure that that customer has all of the core vehicle capabilities that we're introducing in that configuration as well. We think that the combination of those two factors will really help us from an ongoing margin perspective and allow us to really be nimble and dynamic as we evaluate this inflationary backdrop. That's very helpful. Thank you very much. Thank you. Your next question comes from the line of Adam Jonas with Morgan Stanley. Your line's now open. Hi, Claire. I just wanted to follow up. You mentioned, if I quote, "You have a high level of flexibility in the cadence of your growth investment." On the topic of cost control, your enterprise value is currently just above $0, and it's sending the message, the market's sending the message that if you don't get your supply chain costs under control, that you might have to significantly dilute shareholders. That's what happens when you see a zero, you know, a zero enterprise value. Now, you reiterate the 25,000-unit delivery target and the $7 billion+ kinda cash burn EBITDA and CapEx. my question is, if you had to control cash consumption of the business due to force majeure events outside of your control, and you alluded to flexibility and cadence, but could you elaborate what levers could you pull to slow the burn and give you more runway to execute and restore confidence in Rivian in the capital markets? Thanks. Thanks for that question, Adam. As you mentioned, right, we're clearly in the driver's seat with $17 billion of cash on hand. It's important to also note that we've made foundational investments that'll have allowed us to rapidly scale the business in both the consumer as well as the commercial market. We have 150,000 units of capacity for our R1 and RCV platforms. As we've talked about as well, like, demand remains incredibly strong with over 90,000 R1 preorders and an initial order of 100,000 units from Amazon. As we just talked a little bit about with John's previous question, right? We do see significant, you know, path forward as we're ramping production and able to ultimately have that step change where we're now harvesting, right? The profitability of all of those foundational investments that we've made in the production capacity that's online and the launch vehicles that we've come to market with. This ultimately gives us that flexibility to decide, right? How we're deploying our capital on a go-forward basis. As you mentioned, with regard to what those key levers are, we have the ability to live within our means, as we think about the profitability that the model itself can deliver for Rivian, that will allow us to really pace the ongoing growth of the business, and ultimately allows us to have that flexibility on when and how we would raise additional capital on a go-forward basis. We talked a little bit about Okay. You know, we do believe we have the cash on hand to launch. I understand, Claire. Let me just do one follow-up, and I will shut up. For you and RJ, since your IPO, the world has changed dramatically. Investors just don't wanna fund negative EBITDA growth, EBITDA companies in this environment, and the supply chain issues have gotten, to your point, significantly worse in both quantity and input cost. Has anything changed in your team's strategy to adapt to the changes in the environment since the IPO? Yeah, Adam, this has been something we as a leadership team have spent a tremendous amount of time on, of course, from a scenario planning point of view, but also, just looking at the product roadmap, and how we plan to invest and deploy capital over the coming years. As Claire said, one of the really important things for us to recognize here is, we have $17 billion in cash. We have 150,000 units of capacity, with CapEx that's installed. It positions us well to now harvest, and use that to leverage or create a significant amount of growth while we focus investment and focus our dollars on development and preparation for launch of R2. What we've really done is what we've been working hard on is to channel and focus our capital on a really important program for us in terms of scaling, which is the R2 program. But of course, maintaining laser focus on ramping up the existing capacity that we have such that we can fully, you know, as Claire said, harvest the revenue associated with it. Thanks, RJ. Thank you. Your next question comes from the line of Joseph Spak with RBC Capital. Please go ahead. Thanks. Good afternoon. RJ, you alluded to some better visibility with your suppliers. I was wondering if you could provide a little bit more color and detail on some of those conversations with those suppliers that you mentioned had some bottlenecks last quarter that gives you that level of confidence? Sure. We'd previously talked in our last call around some of the challenges we've had inclusive of semiconductors as well as some other components. You know, where we stand today, a lot of those other challenges have been resolved. We've worked with those suppliers to ramp their production. We have clear line of sight to them being able to keep up with our continued ramp in our facility. As we noted in our opening statements, just the importance of us shifting to or moving to a two-shift operation mid this year. Of course, the suppliers need to be capable of supporting that. With that said, we also have very tight relationships with the semiconductor suppliers. We believe we've seen really the worst of it or sort of the valley, if you will, of these supply constraints. The suppliers are leaned in. We have very high levels of visibility into what the allocations will be on a go-forward basis, and that gives us the confidence in what the ramp will look like as we look out through the remainder of this year. Okay. Just maybe to follow up on Adam's point about you know, scenario planning and changing strategy. Your answer made it seem like you know, you're being prudent about how you spend for next generation platforms. I guess what I'm wondering is, you know, your plan involved doing a lot of things on your own or insourced and then throughout really the entire value chain. Has this experience and the change in capital markets led you to reevaluate whether you might rely on other partners or any sort of about face in terms of what you want to do versus you might let others do for you as you want to, as you go and sort of execute upon your longer term plan? There's a few things to think about here, Joe. First is, our original plan had a number of additional variants, both of the R1 product as well as, even propulsion platforms that were planned for the future pipeline. What we've done is, we've really looked at the incredible level of demand that we have for the R1 products as they are, and recognized that there's some big technology development efforts to further, you know, to further advance those products, but we've aligned those very nicely with the R2 program. Our what we call Enduro, this is the single motor drive unit that's used in the EDV platform in a front drive application and in the R1 platform in a dual motor or all-wheel drive application. Our next generation network architecture and associated family VCUs, and of course, our LFP battery pack, which is gonna be launching in the EDV later this year. All those technologies, we're able to share those not only across the R1 and RCV platforms, but a number of them really line up nicely with the R2 program. What we've been focused on is simplifying the product plan and the product portfolio as much as possible. We haven't, in any way at all, shifted our focus on the need to vertically integrate our software stack, vertically integrate around our electronics, and ECU topology, and of course, vertically integrate around our propulsion stack. We do believe those are really important from both a structural cost point of view, but also from a product attribute and feature point of view. We have simplified the overall product set, and we've done that in a way that, as you've heard us talk about here, it puts us in the driver's seat, so to speak, in terms of controlling our need for additional capital and ensures that we're able to launch R2 with the capital that we have. Thank you. Thank you. Your next question comes from the line of Emmanuel Rosner with Deutsche Bank. Your line's now open. Thank you very much. First, one super quick point of clarification. You mentioned your reservation having received 10,000 reservations since the price changes, but then obviously the latest update that said 90,000 is only up 7,000 or so versus the last update. What are you exactly netting out of this? Is it the cancellation or the deliveries that you've already done? The net is both of those things. When we report net pre-orders, every delivered vehicle that we have comes out of that base of pre-orders, and it is the netting effect of the delivered vehicles that we've had throughout both last quarter as well as the quarter to date period, as well as any embedded churn within the pre-order base. Okay. That's very helpful. Your target to launch R2 in 2025 with current cash on hand is obviously very encouraging. How do you plan on accomplishing this? Are you modifying the CapEx trajectory? Have you identified areas where you'll need to spend less capital? Do you anticipate lower operational cash burn than previously anticipated? I guess, how will you do that? Sure. As we mentioned, one of the core catalysts that enable this path forward to launch R2 in Georgia with our cash on hand is both the profitability that we're gonna begin to deliver with the 150,000 units of installed capacity that we have in Normal. It's also important to note, as we think about Georgia, we're building Georgia in a modular fashion. So the first phase of Georgia will be an R2 line with 200,000 units, and that first 200,000 units will be what comes online in 2025. Instead of building the full 400,000 units at once, that is certainly an embedded CapEx savings within the plan and forecast that we're thinking about. Additionally, as you heard from RJ, a number of the strategic decisions we've made to really focus and prioritize our product development roadmap also come with embedded CapEx savings, as well as we think about the CapEx forecast over the next handful of years. Understood. Very finally, how's the ramp-up of the Amazon van deliveries going? Out of the 25,000 target for the full year, how many of those would be on the commercial vehicle side? Yeah. We're excited to be producing and delivering the EDVs. As I said earlier, we've launched the EDV 700 in terms of what's being delivered to Amazon, and so this is the roughly 700 cubic foot version of the van. We're in the production trial stage of the EDV 500. With regards to the EDV 700, this involved, as we talked about in the previous call, a heavy amount of iteration and refinement with Amazon in terms of how it fits into their digital ecosystem and getting a tremendous amount of driver feedback through a series of trials and a series of feedback loops with drivers. We're excited to have been through that, have made a whole host of improvements over the course of really the last year, such that the deliveries that are now happening are gonna start to ramp up, and you're gonna start to see a lot more of them, hopefully, coming into all of our neighborhoods, delivering packages. With that said, we haven't provided guidance on the exact split between the R1 and the EDV product line. Broadly speaking, we would look to say, you know, well over a majority will be in the R1, with EDVs making up, you know, on the order of a third of the total production. Great. Thank you so much. Thank you. Your next question comes from the line of Alex Potter with Piper Sandler. Please go ahead. Okay, great. I had a follow-up question on vertical integration and software. Your strategy, obviously, it's very clear. It's differentiated. I mean, you're trying to layer in your own in-house software on top of your own in-house electronics, including some of the sort of quote-unquote, "boring," firmware, middleware, and other things that customers maybe never get a chance to see. Obviously there's another school of thought that suggests that it's redundant for auto brands to go so deeply, you know, into some of that behind-the-scenes software and that everybody should standardize around kind of a base level third-party system and then only differentiate at the customer-facing end of the software stack. I guess my question for you, first of all, I wanna make sure I'm articulating all that correctly, but then secondly, why do you think your strategy is right and the other one's wrong? Yes. Thanks, Alex. It's a great question. You know, when you look at a product as complex as a vehicle and in particular a vehicle that's connected with a host of sensors between cameras, radar, ultrasonics, with a whole bunch of actuators, so this is suspension, braking, motors, you know, the traditional model is to buy, as you said, a number of compute platforms, ECUs from different Tier 1 suppliers and to put all those different ECUs together, and then the OEM essentially does some part of or at least prescribes how it should be done at the application layer. From our perspective, to create a really unique customer experience and to create an experience in which we can fully leverage all the sensors, all the hardware in the vehicle and continually improve the vehicle over time, truly improve it, more than just putting a new color on the screen, but actually going deep into the performance of the vehicle, you know, whether that's referring to self-driving, whether that's referring to performance attributes or whether that's digital characteristics or digital capabilities of the vehicle, we feel really strongly that it's important to both develop and control the full stack. That's redesigning and developing the compute platforms across the vehicle, so that's all the electronics. Of course, by doing that, being able to design a very efficient network architecture. Then, of course, within that, building all the layers of software from the low level operating systems all the way up to the applications layer. What's exciting to see is the beginnings of from a customer-facing point of view of why that matters. We've done a number of OTAs, over-the-air updates already with customers, and these are just an early sampling of what's to come. Adding features like a garage door opener to the vehicle, adding enhanced self-driving features, adding additional drive modes, adding additional diagnostics platforms. There's a host of things we can go very deep into the vehicle and across platforms because all those platforms are controlled internally. This is important not just on the consumer side. This is also, we feel, really important on the commercial side, where it really underpins a lot of the core core capabilities we embed in our FleetOS product, where we can predictively analyze the need for maintenance. We can predictively manage the health of the life cycle of a vehicle. There's a number of characteristics that are useful as well on the commercial side. Okay. Great. Thanks very much. Then the second question, I guess on Georgia in the R2, how close are you to finalizing, I guess maybe the exact bill of materials for the R2, the exact design and the layout for Georgia? It sounds like you're working on a modular plan. I guess anything in that regard, it's especially related to things like single-piece castings or any of the sort of new manufacturing techniques that we're hearing about. How close are you to finalizing all of that in Georgia? Thanks. Well, Georgia's for us is a really interesting, exciting opportunity because it's going to leverage the learnings we have from going through ramping all of our production operations in Normal. In Normal, you can really think of it as two plants housed in one site. We have the R1 production line, and then that was sort of our Gen 1 line, if you will. Then we have our RCV platform, Rivian Commercial Van platform. With that, you know, separate body shop, separate general assembly. A number of learnings were already embedded into that second set of lines we built in Normal. As we now look at Georgia, the opportunities to learn from a production line layout point of view as well as the product itself and pull all those together to create really a world-class product in terms of affordability, world-class product in terms of CapEx efficiency. That is the major focus from a development point of view for the product teams and for the plant design teams. What's also important to note is that that product coming to market in 2025 will have the time to even further encapsulate more learnings as we continue to go through ramp, and as you know, vast majority of our organization continues to be focused on ramping up in our Normal facility between the R1T, the R1S, the EDV 700 and the EDV 500. Those learnings are certainly flowing into how we think about R1, R2 and, you know, part simplification, part consolidation, you know, like you mentioned with usage of castings. We certainly used castings in the R1 and RCV programs, but, you know, the opportunity to consolidate even more parts is something we're excited about, and driving those manufacturing and cost efficiencies into that product is gonna be critical. Great. Thanks, guys. Thank you. Your next question comes from the line of George Gianarikas with Baird. Please go ahead. Hey, good afternoon, everyone. Thanks for taking my question. RJ, you recently rang the alarm bell in an interview around EV materials, and several of your competitors are signing direct deals with miners of lithium and other minerals. I wonder if you can articulate your strategy and how deep the relationships go that you're developing in that field. Thanks. Yeah. Thanks, George. Yeah, in a recent interview, I was discussing some of the longer-term strategic challenges we're gonna face as an industry as we go from, you know, less than 10 million units being produced a year, electric vehicles being produced a year, to every vehicle being produced globally becoming electric. As we think about that, we do believe there's gonna be material constraints as we get to the sort of near the end of this decade. I wanna be clear though, that as we look out over the next five years, we do not see any battery cell supply constraints or material risks. The way we've approached our battery cell strategy, as well as our far upstream raw material precursor material strategy, is to make sure that we have a diversified approach. What we've launched with between the R1 products and the RCV-based platform products has been a high nickel cell. It's a cylindrical form factor. Later this year, as I mentioned, we introduce an LFP chemistry, lithium iron phosphate chemistry, which of course is a hedge on nickel pricing, also just inherently a lower cost chemistry, and fits beautifully as a base model configuration and certainly for a commercial vehicle fits really nicely. As we look at diversification, it's not just looking at high nickel or iron-based chemistries, but also making sure that we have the right selection of cell supplier partners, and we're very happy with the relationships that we have and continue to grow those relationships. Now to your question, though, to be very specific around raw material, and I think specifically here, lithium carbonate, in the case of lithium iron phosphate battery cells and lithium hydroxide in the case of high nickel cells, these are really key areas I believe for anyone serious about achieving significant scale, multimillion vehicle per year scale, to have secured supply chains around. We're working very hard to build those relationships and put together the right types of deals to secure these really critical precursor materials. I think everybody on this line can appreciate the risks around the material cost. We've seen the price of lithium hydroxide go up quite considerably over the last several months, and that's affected everyone. Making sure that we have confidence of supply as we look out in the latter part of this decade, and where we see risk of scarcity for those key precursor materials, that's something we're very focused on and, you know, in a future time, we'll be able to make some announcements around that. Thanks. If I may take it to the complete other side of the spectrum and ask you about your autonomous offering and any update there, any new learnings and how that offering is driving future product decisions. Thanks. Sure. So in our launch products, we have a feature we call Driver+. Sort of the core of that feature is a highway feature where essentially the vehicle's capable of driving itself. But today that's geo-fenced really to highways. We've developed that platform in-house. As we look out over time, that capability is going to continue to grow. We'll do that with over-the-air updates, where for the existing vehicles that are already delivered to customers as well as future vehicles, that feature will extend into more roads. Along with that development, which is software-based, we're also upgrading and improving the hardware set. Our... What we've talked about in terms of our next generation network architecture, this also includes with it additional compute, as well as updated cameras, as well as a few other sensors on the vehicle to support continued progress above and beyond the level two feature set that we have today. You know, Claire talked about this in the context of how we'll be taking orders and moving to a reservation-based process. One of the reasons for that is with our demand backlog being so large, the products we'll be building in two years will be different than the products we're building today. When I say different, I should say these products will be improved. They'll have different hardware that's part of some of these improvements we're gonna be making from a compute point of view, from a perception stack point of view, and of course, along with that, the improved network architecture that'll be going into these future state products. Thanks, guys. Thank you. Your next question comes from the line of Charles Coldicott with Redburn. Please go ahead. Hi, guys. Thanks for taking my questions. Firstly, on production, the shareholder letter mentions that one reason why the weekly rate of production slowed to about 250 units, I believe, per week in the last five weeks from 350 in March or at the end of March, was that you lost 25% of your planned production due to additional stoppages. Can you just clarify what was it that forced the longer periods of stoppage than you had anticipated in April? Is that now over? Is May's production rate now back to what it was in March or even above that? Thanks, Charles. I do wanna clarify something there. While the rate that you've calculated here indicates that there's been a slowdown in March, the actual production lines themselves, both in terms of their stability as well as their production rate, has continued to improve. The challenge is, as those lines have continued to improve, we've had supply constraints that haven't allowed us to actually fully utilize them. So as we said, of the single shift operation that we're on today, we lost, you know, a little more than 25% of the time. So the number of vehicles we produced to date this quarter is almost exactly equal to the number of semiconductors we have to support all the components that go in the vehicle. What's encouraging for us looking forward here is those areas we've had shortages around, we've been working very closely with the suppliers. We've demonstrated to those semi suppliers continued progress week over week in terms of rate, and they're very leaned in on making sure that the constraints and line down situations we've dealt with over the last several weeks, we're gonna put those behind us as we look at ramping into the remainder of this quarter and of course through the rest of the year. You know, a day doesn't go by where I'm not talking to, you know, the CEO or senior team of one of those key constrained suppliers. I can say with confidence, and certainly, if they're listening in, we appreciate their support. I can say here with confidence that they're as leaned in as we'd hoped for. I'd say it's a materially different situation than we had at the start of the year, where the suppliers were still trying to figure out whether or not we as a company were capable of producing and ramping. We made it very clear through our performance that the plant is capable of running. As I said, we hope to be running the plant on two shifts starting midyear. With that, of course, building line of sight around component allocation. Okay. Thank you. On the 10,000 orders you've received since the price change in March, at an ASP of $93,000, that seems a very rich mix. I guess it means that the vast majority is quad motor max pack R1Ts or large pack R1Ss, given that price point. Were you surprised by that? Does it match the mix of the rest of the order book, albeit obviously at the older, lower prices? Do you expect to sustain that type of mix for future orders? We see just to clarify, there's definitely the high ASPs indicate a preference for the dual motor as you called out, but also a preference for the quad motor. But also just to clarify, the large pack, our middle-sized pack makes up a vast majority of the configurations. So what we see is customers have a very high willingness to spend, and there's a lot of pricing power that these vehicles have and what we've built as a brand has. That gives us a lot of confidence as we go into you know the next six, 12 months understanding the inflationary environment that we're in, that there is significant pricing capability on these vehicles. Thanks. Thank you. Your next question comes from the line of Mark Delaney with Goldman Sachs. Your line is now open. Yes, good afternoon, and thank you very much for taking the questions. The company's working on several new vehicle technologies. You spoke about LFP batteries, the Enduro motor, also the new network architecture, and you commented on how it's an important part of your long-term profitability objectives. Can you elaborate a bit more on how the development is going for some of these key technologies, and do you expect them to still happen on time? Sure. As I mentioned before, Mark, we've on our LFP pack, this first goes into our commercial vans later this year. Along with that, the Enduro motor first application is in the vans as well later this year. Both of those are well underway in the case of the Enduro drive unit. You know, we're putting that plant and that line in as we speak. There's the lines being built, the plants being, you know, the additions going into our facility, and it is on track. We're pushing very hard. We're very excited to get that into our vehicles late this year. Following the introduction in the commercial van, both the LFP pack as well as our Enduro drive unit, as I said, with the Enduro being used in a dual motor setup, one in the front, one in the back, it also makes its way into the R1 product line. That's helpful. For my second question, I'm hoping to better understand the opportunity in software and services, and it's an important part of your long-term opportunity, and I think a really interesting business opportunity for the industry. Can you speak more on how that's progressing with some of the early R1 owners and what kind of adoption you've seen on some of your offerings, such as your insurance product? Thank you. We have seen strong take rates, especially around our offering from a financing as well as insurance perspective. Those are, as we know, we've had some questions as well around level of vertical integration. Those are two great examples of opportunities where we have partnered with strong third parties, in the case of Chase and on the financing side and then Nationwide on the insurance side, that allows us to build a very robust, you know, data-driven insights into the business. Importantly, through you know, some of those data-driven insights allows us to continue to evolve, right, the relationship that we have with our customer. Beyond, you know, financing and insurance, are really excited to also offer a whole host of software-enabled services and, you know, the FleetOS solution that we have with Amazon, there is a great benchmark as we think about the capabilities that we're bringing to bear to help them manage that end-to-end fleet solution. In the case of FleetOS, we're also able to ultimately leverage a number of the core digital commerce investments that we've made as a company from the commercial side of the house and use those to think about, right, our consumer experience as truly how do you manage a fleet of one. We're really leveraging that digital infrastructure and digital backbone within the business across both the consumer as well as the commercial side of the house. As we've talked about in the past, the 65% long-term gross margin opportunity that our software and services side of the business delivers allows us to ultimately drive and increase margins rapidly over time as we think about the compounding effects that that can deliver from our growing car parc. Your next question comes from the line of Ryan Brinkman with J.P. Morgan. Your line's now open. Hi. Thanks for taking my question. Relative to the 17%-21% vehicle price increases implemented on March 1, I'm curious how much of the higher pricing was meant to offset, you know, higher, obviously higher battery metals costs or higher general inflation beyond your control versus maybe higher other more company-specific costs such as product development expense, et cetera. You know, you discussed flexibility in your spending plans, and I appreciate your plentiful cash position too, but have there been any examples yet of, you know, reined-in budget increases or anything like that? Sure. To address the first question, as we thought about the decision to increase prices, we both looked across the broader inflationary backdrop that we were seeing across our raw material costs and beyond raw material costs, just looking at how inflation was playing, whether that was, you know, the cost of freight that we were seeing across the broader market and industry backdrop, as well as other, you know, increases that we were seeing more broadly from an inflationary perspective. In addition to looking at, you know, each of those factors, we also importantly, benchmarked, right, the value proposition that we were bringing to market and the core capability set, that our vehicles represented, to ensure we were truly bringing a compelling value proposition even at the higher, prices that we were charging. I think the momentum and acceleration of pre-orders that we've seen, post that March first, you know, mark, certainly emphasizes, right, that that equation is, certainly, still intact. It, it's been amazing to see a lot of the network effects that we've seen were, you know, in markets where we've been delivering more vehicles. We've also continued to see an acceleration of pre-orders 'cause truly our customers are our best salespeople out there in the market, giving their own test drives and in some cases actually reaching out to our customer experience center to ask them for, you know, how best to address their own friends' questions as they're, you know, educating and really empowering and educating others about what the Rivian brand is and importantly what that driving experience feels like within the market. Those are our key enablers for us. Importantly, we're also not standing still as we think about the priorities that we have in regard to our own cost attack initiatives as we think about our own cost of goods sold and both the commercial opportunities that we have as an organization, as well as a number of the engineering developments that again will ultimately be reducing the overall BOM costs and as RJ mentioned, create a lot of those foundational systems that will power, right, R2, which is, as you know, our more affordably priced midsize SUV that will be coming out as well and will also benefit from all of these horizontal technology investments that we'll be coming to market with over the next, you know, two years. Very helpful. Thank you. Thank you. Your next question comes from the line of Vijay Rakesh with Mizuho. Please go ahead. Yeah. Hi, RJ and Claire. I saw you maintain the full year guide on production. Looks like to hit that, you probably have to double your production, double or triple your production runway from here. Based on the fact that it looks like you'll be adding a second shift midyear, does that imply that you're assuming all the supply constraints should get resolved by midyear, by June, as you add the second shift there? Our production lines are capable of producing at a significantly higher rate than what our supply chain is able to support today, as you said. The guidance we provided fully encapsulates our expectations and confidence around the supply chain. I said this in the last call, and I wanna make sure I say it again here. We are pushing our suppliers as hard as possible to do more than that. We would really like to unlock the full production capability of our plant such that we can get more cars and more, or I should say more vehicles to our customers given the significant demand backlog and given the excitement we have on both the consumer and the commercial side. Thanks. On the Amazon EDVs, I guess on the consumer side, you're able to adjust pricing based on the cost and the cost inflation there. Do you have the flexibility on the EDVs as well in terms of you know, some flexibility with respect to commercial EV pricing, et cetera? That's it. Thanks. Sure. As you think about the Amazon contract, it's a cost plus agreement, and so that embeds, right, some of those overall inflationary metrics embedded within that contract. It's also important to note that as we think about the introduction of our LFP pack as well as the introduction of our Enduro motors in the commercial van, those both are key enablers for significant cost down opportunities for Amazon. That gives us a lot of confidence in regard to the ongoing margins that we can earn from that contract. It's important to note that while, as Claire said, while it's a cost plus contract, we do also have it structured such that we keep a portion of all the savings that we accomplish with things like our LFP pack, as well as the Enduro drive unit. Great. Thank you. That concludes our question and answer session for today. I will now turn the call back over to Mr. RJ Scaringe for closing remarks. All right. Well, thank you everyone for joining the call. Enjoyed the discussion here and appreciate the questions from everyone that came in. Just in ending, I wanna repeat a few things that came out through the course of the discussion. We couldn't be more confident in the path that lies ahead, and we as a leadership team are very focused on making sure we take the $17 billion in cash that we have, the 150,000 units of installed capacity, and the incredible demand we have from consumers, both on the consumer side as well as with our partner, Amazon, and taking all those core elements and ensuring we're positioning ourselves for significant growth over the coming years, but also focusing our capital deployment on ensuring that we launch R2 in 2025, and can do that with the cash that we have on hand. As Claire said, and as I said, so that we are in the driver's seat in terms of our future growth. With that, we look forward to future discussions here and reporting continued progress, as we work towards those goals. Thank you again, everyone, for joining. This concludes today's conference call. Thank you all for participating. You may now disconnect.