Great, and I think we're live. Thank you everyone for joining as we continue the Barclays Global Automotive and Mobility Tech Conference. I'm Dan Levy. I lead US Autos Research Coverage at Barclays, and very pleased to have with us Rivian. Rivian is one of the large EV pure plays that many of you know, a very unique product offering, focusing on the truck and SUV segment, and very pleased to have with us Claire McDonough, the company's CFO. So we're going to go through a series of questions, fireside chat style. For any of you that have questions, feel free to email me at dan.levy, d-a-n.l-e-v-y@barclays.com, and I will - I'm glad to ask you questions anonymously. But otherwise, let's kick it off. Claire, thank you very much for joining. Glad to have you. Thanks for having me. Great. So why don't we just start with a broad overview, and really, let's do a bit of a contrast, Claire, of where you are today versus where you were a year ago. And I mean this in terms of on the financial side, because the product is still very much there and the traction is there, but I think the big shift that we've seen is on the financials. A significant reduction in gross margin losses. The operations seem much smoother. You really seem to be out of this fighting fire mode. So, you know, there's still a lot more work to do on getting to breakeven, but maybe you can give us a sense of what has materialized or transpired over the past year to bring this much greater level of stability. Thanks, thanks for that. It is pretty remarkable to see the progress that we've continued to make across the board. And that's really been driven by a couple of key factors. We've in aggregate reduced the gross profit losses by over $100,000 per vehicle delivered, as you look back at Q3 of last year versus Q3 of this year as a whole, and that's really been driven by, you know, two key factors for us. The first is the continued progress that we've been making in ramping up production levels. And so as you look at the volume-related differences, we're over, you know, about 2.5x the overall volume that we had last year in Q3. Actually in Q3 of this year, we produced more vehicles than we produced in the first three quarters of last year, to put that into context as well. So really meaningful progress and momentum as we think about the continued ramp-up of our supply chain and the overall operating efficiency that we've been able to deliver within our production facility in Normal. And that allows us to leverage all of the fixed costs across that manufacturing plant over a much larger base of delivered vehicles. The second key factor for us is really the continued work that we've been doing on reducing material costs within the vehicles. And as you look back at the early part of this year, in Q1, we took some downtime to introduce our LFP battery pack and our first fully in-house Enduro drive unit into our commercial van portfolio. And we took a little bit of downtime in the course of Q1, and we're able to ramp up our, you know, brand-new supply chain of Enduro motors. And collectively, between the LFP battery pack and Enduro drive unit, we're able to reduce our material costs by 35% for the commercial van. So that demonstrates the significant level of material cost reduction through the integration of new technologies that we're capable of. As we look to, right, what's coming next, and what's the sort of next legs of growth as we look to driving from, you know, current levels to our path to positive unit economics at the end of 2024 next year, and that's really going to be driven by a number of the new technologies that we'll introduce into the R1 platform in the middle part of next year. So that's a key catalyst for us as we continue to introduce that same Enduro drive unit into our R1 vehicles and our dual motor configuration. We've just recently introduced our Max Pack as well. So a lot of these key initiatives are taking hold. And then beyond the engineering design changes, we also are continuing to execute against our commercial cost down roadmap as well with the broader supply base. So about a year ago, right about this time, we invited all of our supply partners to our manufacturing facility in Normal and talked with that supply base about the need for everyone to drive a higher level of accountability to ensure Rivian could have a seamless production ramp in the course of 2023. Because unfortunately, in automotive, it just takes, you know, one supplier to gate your overall production volumes as a whole. And we've seen a material change in the health of the supply base and the access of supply over the course of this year that's been an enabler for our ramp. And we've also started to see the early semblance of some of the work we've been doing with our supplier partners on reducing our commercial agreements with them to take costs out of the vehicles as well, which have been key contributors to the continued financial progress and momentum that we've seen across the board in 2023. Great. So really hitting on multiple levers to drive this improvement in the gross margin. Maybe we could just, you know, touch on this a little bit and maybe a little more near term. You talked about, you know, having line of sight to being contribution margin positive on R1 exiting the fourth quarter. You're already at contribution margin positive on EDV. From a slightly more near-term standpoint, what is this path to contribution margin positive on R1? Is there something more specific within these broader set of drivers that you're talking about? You're obviously getting there on volume, the volume is ramping, but is it that, you know, there are some other thresholds that you're hitting on the material cost side, you know, as we're exiting the fourth quarter? So the key drivers to being contribution margin positive on the R1 are enabled by the continued increases in Enduro production, for example. So while we've introduced the Enduro drive unit and our Max Pack in the course of Q3 into our R1 portfolio, the overall penetration of those variants is relatively low. And so we now have the opportunity to ramp up that penetration rate as we look to Q4, which will be a key contributor to the reductions that we'll see in material costs because of, you know, the Enduro introductions that we'll have. And then in the case of the Max Pack, we clearly have more of an ASP driving story or trajectory for the business, as well as we benefit from a higher selling price point of the Max Pack variant vehicles in the course of Q4, which will be another key enabler for us for the business. We're also seeing more of a. It's on the commercial cost down roadmap, it's more of a phased rollout of the savings that we'll see over time as well. And so for us, you know, that will continue to play into the fold as we look at our, you know, forecast for material cost over the coming quarters. And Q4 is certainly a beneficial quarter for us as we take hold of a more meaningful percentage of those commercial savings into the business. And then beyond, you know, those key drivers, we've continued to see benefits on freight costs as the broader, you know, freight market has softened a bit as well. That's also another tailwind or enabler for us as we think about the sort of march to contribution margin positive on R1. Right. Let's unpack this more and, you know... So right now you're going to be hitting contribution margin positive on R1. You're already there on the vans. You've guided 2024, you're going to be gross margin positive. So let's unpack those points, because I think you know, you've laid out the roadmap, there's volume piece, and then there's a couple pieces on the cost side between material cost and working with your suppliers. So let's just start with the volume side, and maybe you can give us an appreciation. I think a key event looking forward is the re-rate that you're going to have- ... the middle of next year. So help us appreciate how critical this re-rate is in getting to the required volume run rate that you need to get your proper fixed cost absorption. Right now, I think you're running at 16,000 units a quarter. I imagine that, you know, some of that is just a function of, you know, process limitations. How critical is this re-rate in unlocking more volumes? Sure. So part of the advantage of the re-rate is increasing, you know, the jobs per hour or effectively, right, how many vehicles per shift can we produce on our production lines themselves. So there's both the advantage of added potential, you know, volume that can come off of R1 as we go from 65,000 units to 85,000 units, but the added efficiency that we'll see per shift is also a material driver within the business as well. And for us, with the materiality of the new technologies that will go into effect combined with the commercial cost down efforts that we have as well, it also reduces really the floor to break even from a gross margin vantage point as well within the portfolio. And so the added benefit of volume is really a margin enabler or expander, versus a requirement as we think about what level we need to be running the plant at to achieve a gross profit positive in the future. So that's a little bit of a way we think about it and just how meaningful the new technology introductions are within the portfolio itself as well. Great. Aside from the capacity shift, what else, you know, and going from skewing more heavily from EDV to R1, what else are you trying to achieve here? And I know you said that part of this is the jobs per hour and unlocking some of that here, but what are some of the other benefits you're getting from this downtime? Sure. It's really the opportunity to introduce the new technologies, which is the most significant contributor to the time that we'll be taking in the second quarter of this year. To put it in context, I'll give you a couple of examples of what's being introduced into the R1 portfolio. So importantly, we're introducing our next generation network architecture in which we're going from domain-based controllers, so think of that as many computers managing many systems within the vehicle, to a zonal-based system. So just a couple of different larger scale computers that are managing each of the systems within the vehicle itself. So significant lift on our electronics and our software teams to bring that zonal network architecture to life just two years after our, you know, start of production as we think about that introduction of new technologies. And it's a key saver as we think about the build efficiency. So we've reduced the number of ECUs or Electronic Control Units by 60% in the vehicle. We've reduced the length of that wire harness by 25% as well. So think about that as, you know, 60% less electronic connections that need to be made and tested in the vehicle, in the assembly line itself. So huge savings as well as we think about the manufacturing efficiency of producing the product. Also significant, you know, mass savings that comes with that introduction as well, and just broader efficiency as that becomes truly the sort of foundation network architecture for, you know, future programs as well, as we look ahead to, you know, R2 or additional vehicles that will be coming online in the future for Rivian. Beyond that, we're also introducing our Standard battery pack in R1, and that allows us to open up a larger addressable market of consumers for R1 vehicles, given that it's a starting selling price of about in the low $70,000 area. So that's another important new technology we'll be introducing into R1 that's not available today. And then we're introducing a new battery pack as well for the R1 vehicles. That very heavily simplifies the battery pack and module structure that we'll be building and takes, you know, thousands of dollars of cost out, additional, you know, mass out, much easier to manufacture and build as well within the vehicles. So that's another example of some of the new technologies that will be coming into place next year that is a key enabler for the operational efficiency and cost efficiency that will get unlocked with these introductions. Great, thank you. That's helpful insight. I think you laid out some comments on the call, on the type of cadence that we should expect, but maybe give us a sense of the timing next year. This is mostly happening in the second and third quarter. How much downtime are you going to have to take? You know, at what point do you get to 85,000 unit run rate? What are the gating factors? So I think you've given some comments, but maybe just refresh us on how we should expect the cadence of next year to play out. Sure. So the cadence of next year is we'll have, you know, Q1, which is sort of ongoing production progress within the plant prior to the shutdown that we'll take in Q2 of next year. And then we'll have a several-week shutdown, and it will be a shutdown both for R1, but it's also a shutdown for EDV, given a lot of the shared shops that both of those vehicle platforms utilize within our Normal plant. Then coming out of the shutdown, EDV will be able to, you know, ramp back fairly quickly, shouldn't have too much disruption there. On the R1 side, though, we're taking a very methodical approach to how we're reintroducing each of the respective variants for R1. I spoke a little bit about the fact that it, it's not just, you know, one battery pack or one drive unit, right? We're introducing, you know, three battery packs, two different drive units, a brand-new network architecture. And so there's a phasing approach and ramp associated with each of those respective variants, that's why it will impact, you know, not only Q2 volumes, but also Q3 volumes, as each of those new variants are feathered into our production process as a whole. And importantly, the key gating factor is how we're also ramping up a number of new supply chains to support these new technology introductions within the plant. We've clearly gained a significant, you know, muscle around this with the reintroduction of our Enduro drive unit, for example, which was introduced on time and ramped on schedule. So we're getting better and better with lots of key learnings under our belt today as we've gone through a number of new technologies on, you know, EDV and even the introduction of Enduro or our Max Pack in R1 as well. Just to double-click on that comment, is there any one particular supply chain or product area that's, you know, the, the most critical in, in getting everything re-ramped? Not one that's most critical, and unfortunately, it's making sure everything is all there at once, and ready to ramp with sort of the required, you know, scheduling across the board. And so to answer the second part of your question on the timeline to get to the 85,000 units of production run rate capacity, our expectation is that we will certainly be making significant headway as we work through, you know, Q4, but that there still could be, you know, some more supply-related constraints as we work through that. And so it would be, you know, more into 2025 where we would see, you know, true sort of ability to operate at that full 85,000 units of potential run rate capacity. Okay, great. Thank you. EDVs, you've been running at roughly 10,000 units a year. What are the gating factors? Is this more demand-driven, or is it just, you know, the supply and that pace has been slow? And, you know, what changes have to? And maybe we can... I think we know 2024, you know, you, you, you're, you've ended your exclusivity with Amazon. You're going to start the process. It's going to take some time, but at what point do we start to see volume from non-Amazon customers coming in? Sure. We'll start to see volume from non-Amazon customers coming in through the introduction of pilots with large-scale fleets across the country. But as we've talked about, the sales cycle for the commercial vehicle business is a long-dated sales cycle that starts with pilot fleets. So while we'll certainly have a number of fleets, fleet pilots introduced and announced over the coming, you know, months and quarters, the significance of those non-Amazon volumes will take time to manifest over the course of, you know, the coming, you know, 12 months, 18 months, and beyond as we build that backlog of non-Amazon volume and demand as well. It's important to note that our manufacturing team would love to build a lot, you know, more vans. It's a simpler vehicle to produce within our manufacturing facility. So we've certainly been more, you know, demand constrained, given our singular customer in Amazon, than supply constrained in the ongoing ramp up of the commercial side of our business as a whole. So excited about the opportunity ahead of ourselves to be in a position to more fully utilize the 65,000 units of commercial van volume that we'll have available to us, following the re-rate next year. Right. Let's talk a little more on the cost side, and I think you've laid out, you know, a number of the opportunities ahead in terms of the Re-rate, et cetera. Is there anything in the way, I mean, help us appreciate, first of all, as we zoom out, you know, how much more in terms of low-hanging fruit is there on the cost improvement side? Obviously, you'll get a lot from the Re-rate, but what other sort of low-hanging fruit items are there that you can use to drive further improvements in cost per unit? One of the other drivers for us that you haven't yet seen in our financial results is some of the commodity tailwind impacts. So we've seen significant reduction in, you know, in underlying cell raw materials, whether that's for lithium prices, whether that's nickel, whether that's sort of the trajectory that we've seen in steel and aluminum over the course of the last 12 months. So because of the way many of our contracts are set up, there's a lag effect there as well. And so we'll see more of that impact in, you know, 2024 and beyond, versus what's currently being reflected within our Q3 financial results, for example. So that's one key tailwind. And then you heard RJ and myself talk about it on our Q3 earnings call as well. Today, we have visibility into the vast majority of the cost down efforts that we'll have ahead of ourselves. And so most of that is whether it's the new technologies we'll introduce or our renegotiated, you know, supply contracts, the vast majority of that is contractually in place today. And so it's really more of a matter of time for us to actualize or realize the savings of those changes over the course of 2024 and beyond. And so for us today, we have, you know, a high degree of confidence in the materiality of the step change that we'll continue to see as we drive down material costs within the vehicles. So that's really... I don't know that I would call it low-hanging fruit, but it's more contracted visibility that we have today in what will, you know, be able to be recovered by Rivian in the future as we drive towards positive gross profit. Right. Let's talk about Enduro, because that's, I think, a key part here. You and you mentioned the 35% cost improvement that you saw in EDV. What is unlocking this level of cost improvement by using Enduro? Is it just the internal efforts versus I believe the alternative is going with an external supplier? And then, you know, you've talked about over time, I believe the target over time is R1 could be over 50% Enduro mix. You know, can we extrapolate this magnitude of cost improvement that we're seeing on the van side to R1 as well? So on the 35% reduction in material costs, it was driven by the combination of Enduro plus the new LFP battery pack- Right ... as well, so not just the Enduro savings, itself. And as we think about the trajectory for R1, for example, we'll have our standard pack is quite similar to that pack that we introduced into the EDV. Similarly, we'll have our Enduro drive unit, we'll have our network architecture and a handful of other cost-driven savings opportunities as well that will be introduced in the downtime we'll take next year. So on an apples to apples basis, comparing, you know, that variant relative to the EDV, you'll see an even bigger savings on a, you know, per vehicle basis, given that the magnitude of technology changes that will be occurring next year. But as we look at the broader portfolio, we obviously have, you know, multiple different battery packs, different, you know, drive units associated with it. But in at large, there's a significant level of savings that's still to come into play in R1 as we think about the magnitude of new technology savings, which we sort of say is akin to what we saw with EDV in Q1 of this year. Great. Let's look a little bit beyond 2024, and you've given targets over time of gross margins, midterm gross margins of 25%, EBITDA margin in the teens. What are the broad levers in reaching these targets? And maybe you can just give a comment on the OpEx trajectory. Sure. So as we think about our long-term targets, it's important with an earlier stage business like ourselves, to think about plant-level profitability. And so as we think about the broader trajectory, we have, you know, first and foremost, in ramping up Normal and achieving, you know, target vehicle level margins in the Normal plant, that's, you know, step one. Beyond that, we'll have the launch of R2 in 2026 as well, and that will start with the first 200,000 units of production capacity at our new Greenfield site in Georgia. We'll add an additional 200,000 units of capacity onto that as a second phase. And so as we think about the path from, you know, current state to our target margin state, that does require the continued ramp up of that new manufacturing capacity that we'll be bringing online, that will allow us to reach those steady state margins on both the R1, EDV, and R2 platforms as well. And then on the OpEx trajectory, as you've seen over the course of this year, we've been in a position to have, you know, OpEx remain relatively flat on a cash basis. We'll see a more material step up in our cash operating expenses next year, as we work to introduce some of these next generation technologies that will increase our R&D level of expense next year in the lead up to our shutdown in Q2, and then the ongoing development and work for R2 as well. And we'll have some of the early hiring for our team in Georgia as well. So, those coupled with the continued, you know, build-out of our service infrastructure and retail infrastructure as well, we'll see, you know, more meaningful growth versus the very constrained operating cash operating expenses we've been able to maintain in 2023. Great. Let's talk for a moment about demand. You know, obviously, weak demand has been a key topic within the industry. So to what extent is demand a concern or a question for you? And what are the types of indicators that you're looking at when gauging demand? I think right now, obviously, you're more supply constrained than anything else, especially on R1S, where there's still a long waiting time. But how are you thinking about the demand environment? Sure. As we think about some of the, you know, comments that have been made about the EV transition, we still have, you know, tremendous confidence in the, you know, the transition happening. To date, there's roughly a 1.5 billion vehicles across the planet, and only about 2% of those are EVs. So we're still very much in the early innings of this massive transition to electrify the transportation sector as a space, and we think Rivian can play a very meaningful role in leading and helping to accelerate that EV transition itself. And as you noted, we've seen, you know, strong resonance with the brand we've built with our initial launch products, with the R1T and the R1S, earning, you know, J.D. J.D. Power's top awards for premium electric vehicles, for example, which is driven by, you know, customer feedback and their, you know, love for that ownership experience that they've been able to achieve with Rivian. And we're excited to, right, take that and now transport that into a smaller and more affordable package that will come next with, with R2, which is something that, you know, RJ and I get to see and experience every single day and get really excited about. We'll be excited to unlock that for the world to see in the, you know, early part of next year as well, to showcase, you know, what's coming next, which we think is another key enabler in driving broader awareness for the Rivian brand as a whole, and introducing, you know, more and more consumers into the Rivian brand ecosystem and Rivian community at that as well. Today we're focused on continuing to build out a number of core demand drivers for the business. Earlier this week, we launched our new leasing program, which we've started in 14 states, centered around the R1T offering itself. As sort of the first step in our broader leasing portfolio and opportunity. And as a reminder, one of the key advantages of leasing is the opportunity to have the $7,500 IRA credit be transferable to consumers, given it's technically a commercial sale to our leasing partner in Chase. So that's another leg of market expansion opportunity as we allow new EV owners to sort of opt into a 2, 3-year lease opportunity for a vehicle. Test out sort of the value proposition that a Rivian can provide and take advantage of that IRA offering as well. And then we've been continuing to roll out our test drive program as well across the country. And so we run test drives out of the roughly, you know, 50 service centers that we'll have online at the end of this year, and as well as our, you know, growing network of our retail spaces as well across the country. As you know, driving is a huge lever for us as consumers see and love the design and aesthetic of the Rivian. Once they're behind the wheel, they truly understand the differentiation and the capability and performance of our vehicles as well, and the thoughtful and intentional design that's gone into all of the, you know, meticulous decisions that have created that R1S or R1T as well. So, we're excited about, you know, continuing to get more and more prospective customers behind the wheel of a Rivian to showcase the product for the future as well. You should have more people out at your off-road testing track in Normal to see the true capabilities of- Yes ... the vehicle. Pretty cool. Okay, Georgia, maybe breaking ground next year, maybe you can just give us a sense of the timeline and the gating factors of the build-out? Sure. So to date, most of the work on our Georgia site has been executed on behalf of the state of Georgia. So they have done a lot of the grading work across this 2,000-acre site that we have in Georgia, and then we're working on bringing utilities to the site, additional access roads to the site, that the state has been working on Rivian's behalf. In the early part of next year, we'll break ground on the site itself, and that will kick off our, you know, construction phase of the project itself as we work from, you know, building and pouring those first foundations to eventually, you know, building our first prototypes on the line, and ultimately getting towards our first saleable vehicles in 2026 for consumers. Okay. And then as far as the timeline for R2 development, and maybe just a point on R2, you know, to what extent are you considering the current demand environment, competitive environment, as you're positioning the platform and focusing on flexibility within the BOM? How aggressively are you trying to attack cost here? So we're very focused on attacking cost for R2. As I mentioned, right, our intention is to build R2 into a mass global platform for the business, but harnessing the power of right, the brand that's been established with our more premium-focused, you know, launch products as well. And so how do we take that essence of Rivian, but get it into a much more affordable, you know, $40,000-$60,000 price range package, that a much larger pool of the population can experience and, you know, and purchase as well? And so because of those dynamics, thinking through trade-offs, ensuring that we're getting to the right level of our material costs for that platform is so critically important for us, as a leadership team and a business. And unlike R1, where we had the opportunity to really sort of have the best of everything and create the best on and off-road vehicle in one, this vehicle needs to be much more intentional in where those dollars are being deployed from a brand-building perspective, ensuring that we have a really compelling and interesting and dynamic and capable vehicle, but one that can meet our gross margin targets at a much lower price point as well. And so we'll be leveraging a lot of the key new technology introductions that we'll introduce next year with R1, which we'll take as sort of a baseline or foundation for many of the key systems that will drive the R2 platform as a whole as well. So it's the introductions that we'll have next year, both de-risk the introduction of R2, but also demonstrate that roadmap from R1 material cost to R2 as well as we get closer and closer to our 2026 launch. Okay, great. Thank you. Let's. I know we're tight on time here. I want to wrap with a couple on capital and liquidity. And maybe we could just talk about, you know, CapEx. You know, in the past, you had guided to a framework of $2 billion of annual CapEx needed to get to Georgia through 2025. This year, it's only going to be just over $1 billion. And then you said CapEx will average under $2 billion, you know, this year, next year combined. To what extent is spend being deferred, or is it you're just finding ways to reduce spend? Maybe you can give us a comment on how you think about vertical integration today, because it seems like there are some players in the EV space that were more ambitious on vertical integration, but now, given everything that's happened, they may be paring back the ambitions a bit on vertical integration. Sure. On the CapEx roadmap, it's a combination of both, our continued focus on cost management and challenging our team, challenging how we're spending, how we're negotiating, how we're getting to the right outcomes on capital deployment. With the investments that we're making to create and drive significant value and savings and ROI for the business over the longer term. And so as we think about the significance of the reduction in our CapEx guide for 2023, there's a big piece of our CapEx reduction that will be lifted and shifted into 2024, and a lot of that is related to, you know, tooling and capital investments for many of the new technologies that will be going into the vehicles in the course of the 2024 timeframe as a whole. Where in some cases, our team has done a great job at managing our payment terms with some of our equipment suppliers and things of that nature to defer some of that timeline in which we need to have cash go out the door, which has delayed some of the CapEx itself into next year. So we'll certainly see next year be well north of that $2 billion watermark because of that evolution or shift from 2023 to 2024. But we're still scrutinizing and managing costs down, not just in CapEx, but really across every, you know, dimension of the business as a whole, with significant progress being made on material cost and as well as operating expenses, which have been, you know, relatively flat this year relative to last year, while we've grown and more than, you know, doubled the business from a production and delivery perspective. Great. Let's just wrap one on capital needs. You've been, you know, you've done a couple of fundraisers this year, convertible issues. You know, just give us a sense of the cash and liquidity needs going forward. You know, how you're thinking about returning to the markets, to what extent you need to return to the markets. You know, what's the framework on potential future raises? Sure. The framework will be consistent with the one that we continue to employ as a leadership team, and that's to continue to be opportunistic around always maintaining a strong balance sheet position. We have a huge runway ahead of ourselves with the upcoming launch of R2 in Georgia, and especially as we're in, you know, today making significant, you know, capital purchases for equipment for long lead time equipment, whether that's, you know, stamping presses or paint shop, we're beginning to break ground in Georgia in the early part of next year. Having and maintaining a strong balance sheet position is really paramount for us. We'll continue to look at a number of, you know, capital markets to continue to build out our portfolio or roadmap for the future. But that's going to be sort of the framework that you'll see us continue to deploy as a leadership team, as we maintain our strong balance sheet position, heading into the R2 launch. Great. Okay. Well, we're well over time, but very helpful. A lot of good details there. Claire and team, thank you for your time, and look forward to seeing how the narrative unfolds. Thank you. Thanks for having us. Appreciate it.