All right, up next, we are pleased to be joined by Claire McDonough, CFO of Rivian, and James Philbin, VP of AI and Autonomy at Rivian. Thank you for joining. Before we get started, just important disclosure here. For important disclosures, please see the Morgan Stanley Research Disclosure website at www.morganstanley.com/researchdisclosures. With that out of the way, Claire, maybe I'll kick it off with you. Would love for you just to set the stage for us. Lots changed with Rivian over the last few years, but it's also a very pivotal year with the R2 launch. You know, what's changed? What's working better, and what do you think matters most for investors over the next 12 months? Sure. If you look back at Rivian's history, our intention was to bring the R1 program to market that was really going to be Rivian's handshake with the world. That was gonna showcase the performance, utility, capabilities that could be captured in an electric adventure vehicle. I think the R1 has done that for us in spades. The R1S, for example, is the best-selling electric SUV over $70,000 across North America. In the state of California, it's actually the best-selling premium SUV, sort of combustion engine or EV as well. We need more states to sort of take a cue from California in that regard as we think about the adoption rates for the future as well. As we think about what's coming next with R2, if we can just harness even a fraction of the market share and performance we were able to achieve with R1 in a much larger addressable market with R2 will be a, you know, home run beyond our wildest dreams as well. It showcases the intentionality of the product roadmap. Beyond the product roadmap itself, R2 is also, you can think about it as a vessel for all of our advanced technology. It's not just a vehicle program, but it's our next generation of electrical architecture software. I think one area of the business that has probably made the furthest advancements or changes since we started with our launch product is centered around autonomy with full, you know, in-house hardware and software stack, which, you know, James is gonna tell us a little bit more about today as well. That's critically important as we think about R2, which represents the scale, growth, and profitability potential for the business. Also, I think one of the other elements that has evolved over Rivian's history is seeing Rivian as a technology provider for the industry at large. That is illustrated through the $5.8 billion joint venture that we did with Volkswagen Group, and now the opportunity for us to potentially license, you know, autonomous hardware and software capabilities in addition to the electrical architecture and software to other OEMs across the industry as they see the need for transformation and the opportunity set in a world where, you know, in the not-too-distant future, if you don't have a software and AI-defined vehicle with advanced autonomy, you're not going to be able to generate the share position that you would want to have in an industry as well. Yeah, that makes sense. We agree with you that it feels like autonomy is really the driving force behind EV adoption going forward. It's gonna become synonymous with buying an EV is what's the autonomous driving platform that you have layered on top of the vehicle. James Philbin, maybe I'd love to pass it to you to- Mm-hmm. discuss, you know, how does Rivian differ? What's the strategy been when you think about building out your autonomy platform? You know, it feels like every OEM has a slightly different strategy in terms of how they're approaching it. Love to hear how Rivian differs, what gives you the confidence on kind of the roadmap going forward on your autonomous driving offerings. I think the first thing to point out is that Rivian is really a developer of the technology. We're not just an integrator, right? I think most OEMs, when they're talking about their L2 + or their ADAS solutions, what they're really saying is that they're taking a solution from a Tier 2 or a Tier 1 and integrating it into their vehicles. I think we're very different in that we really have built this sort of integrated end-to-end approach, all the way from the sensors, all the way through to the compute and then the software that runs there through to the experience that the customer has. I think that gives us a tremendous sort of nimbleness and velocity that other OEMs don't have. With the launch of Gen 2, we spent a lot of time building the right architecture, the right foundation, really around this sort of data flywheel approach. Every vehicle that's on the road today, from the Gen 2 R1S actually has a very powerful data collection mechanism in it that can trigger, can pull that data, can learn from customer driving. All of that feeds back into the system. We launched Gen 2 in 2024. Early last year, we launched our first hands-free product. Because of that flywheel, we were able to massively expand that with the launch of UHF, which was at the end of last year. That's actually the, in my opinion, the best hands-free system on the market today. Can cover, 3.5 million miles of roads in the U.S. That's just the beginning, right? We're on this amazing trajectory that this year, we're planning to get, you know, our first customers in our point-to-point system. We demoed that actually at AI Day. Really, building towards those much higher levels of autonomy. Yeah. Yeah, that's great. Maybe just build upon that a little bit on the roadmap for eyes-on, hands-off, point-to-point, because I think that's a pretty big step function improvement in the technology. Then eventually, you talked about getting to true eyes-off, hands-off, point-to-point. What, what needs to go right to get there? What does that scaling look like? Is that a, you know, start in a very geo-fenced area like you did with the Universal Hands-Free highway driving, where it's on a select number of miles, and then you eventually expanded it? Or would you know, wait to roll it out until it's available to the broader universe of customers? Maybe a secondary question to that is, like, how and maybe this is more for Claire McDonough, but how linked is it to the success of R2 and the data collection from R2? Or do you have enough, I guess, with the R1 vehicles on road from a data standpoint to get to that eyes-off level? I think the way I think about it is that we have, in the fleet that's deployed today, a very large funnel. In fact, it's not like we're recording and sending back all of that data, right? There's most of the data is not interesting. If you're just sat in the middle of the road, there's not much going on. We don't need to collect more of that data. You know, as we've deployed this system and as we deployed Universal Hands-Free last year, we've also been improving, like, the triggering mechanism. How do we find those interesting use cases, those interesting tail events, so that we, you know, the system learns as quickly as it can? That's, I think, a big part of it. R2 ramp will definitely increase the volume. The thing to remember about our vehicles is that, you know, we have 11 cameras, five radars, essentially one of the best sensor sets of any vehicle on sale in North America. The data we get back is actually much more valuable than just the camera-only data set. With the LiDAR launch later this year, we'll actually have an even more powerful data set, you know, we think of it actually like a ground truth fleet. We essentially have the biggest ground truth fleet in the world, essentially. All of that will feed back in, make the system much better, much faster. That makes sense. I think there's a debate in the market as well around simulation versus actually real-world data capture. Obviously, a lot of other competitors out there promoting simulation as a way to really expedite that eyes-on or even eyes-off, hands-off- Yep ... driving for some of the maybe more incumbent OEMs that haven't taken this in-house. How do you view that? How much do you leverage simulation? Are you a believer that this needs to be done on the road and, like, in the real world to get to a point where you solve that 0.1% edge case that you need to ultimately solve to make sure it's safe? Is the sim good enough to get there? Yeah. There's sort of two types of simulations. There's what I would call open-loop simulation, where you actually take a real scenario and you replay it through the system. We already do a lot of that today. In fact, we resimulate millions of miles even for releases today before, you know, any customer sees them. There's another type of simulation, almost more like a video game style, where you're sort of recreating camera imagery. That we think is important but much less useful, especially for us, because we have this incredible diversity of data from all across, you know, the country and all these different weather conditions. Just to give you an example, for UHF that we launched last year, although we hadn't done much validation-specific work around snowy conditions. Because of all that data that we collected, since the launch of Gen 2, the system was actually very capable in those conditions. I had multiple people texting me saying, "Wow, this is the best system in snow." It's like that emergent property that we got because we had that incredible diversity. We didn't have to go specifically, collect snowstorm data, collect, you know, data here. That already is coming to us. That's great. Maybe, you know, R2 sounds like it's a, you know, it's the marquee platform that's gonna help you scale to be a scaled player. You know, the R1 demonstrated the technology chops that you guys have, and I think that's very clear. As we think about the R2, you know, you're launching it, I guess, in a week from today. You're starting this configuration process, start to build an order book. What does success look like to you? I know you've given a guidance for the amount of vehicles that you wanna deliver this year, but outside of that, is it margin? Is it production timeline? Like, how should investors track over the course of the next few months as you start to build that order book, whether or not you're ramping or, you know, you 've hit your kind of successful milestones on R2? Sure. As we take a step back and look at what success looks like, first and foremost, it's expanding the addressable market of Rivian consumers. Tapping into, and not just, you know, prior EV owners, but also creating new choice where a consumer today may be on the fence, you know, in their first EV purchase decision. The opportunity for Rivian to take the 90% of consumers today that are still purchasing a combustion engine vehicle and get them behind the wheel of their very first EV. That, I think is critically important as we think about what success of R2 looks like as well. The other elements of R2 are the operational efficiencies that we deploy as we execute our production ramp and path to profitability on the product. We believe R2 has a path to exit 2026 with positive gross profit margins and Rivian to be positive on an automotive gross profit basis as well as we exit 20 26. A lot of that is enabled through the fixed cost leverage that R2 brings to our existing Normal, Illinois plant, where last year we delivered, you know, just over 42,000 units. The Normal plant, once fully ramped with R2s, is capable of producing and delivering north of about 215,000 units in total. That enables not just a path to significant gross profit contribution from the R2 product, but also how it helps enable a path to expanded profitability in R1 and the commercial vans as well. We spoke a little bit about it as R2 as being the conduit for many of our next generation advanced technologies. We also see their, you know, success looks like high levels of take rate in our Autonomy+ offering, which is our new paid autonomous offering for consumers. High utilization and engagement with our Rivian Assistant to seeing the consumers that are really taking advantage of a lot of the core functions and features that make their R2 and their Rivian truly unique as well. Yeah. I wanna double-click on the gross profit improvement, the path to profitability with R2. Totally makes sense on the fixed cost leverage, operating leverage side. Talk a little bit more about Bill of Materials. There's been a lot of conversation, especially at this conference, about memory pricing and costs and bottlenecks. You've got lithium pricing, copper pricing. How do you balance that? Are you comfortable with where you're at in terms of achieving the 50% reduction in Bill of Materials that you guys have talked about historically? Like, how has that changed over the last, you know, six to nine months as we've seen the commodity inflation really, you know, accelerate? While we've certainly seen commodity inflation for some of the core raw material inputs in R2 increase over the last year, we also have always planned for a future where, you know, some of these elements were intact. We weren't just building towards the establishment of the at market pricing, you know, of where aluminum may have been or where lithium, you know, prices may have been. We're working towards a product set that has, you know, durability through different raw material cycles as well. That certainly went into and contributed to the design and development and the enablement for us to create a product that could be, you know, roughly half of the material cost of an R1, but certainly is by no stretch, you know, half of the vehicle. One of the early reviewers of the product said, you know, if you had blindfolded him, you know, put him behind the steering wheel, so to speak, of an R2, he actually probably couldn't have told you the difference. He would've told you he was driving an R1, not an R2. That just exemplifies, you know, the core foundational technologies that enable a path through vertical integration to structural cost advantages that allow us a path to provide such a compelling value proposition to the end consumer as well. That's, you know, certainly central to a lot of the trade-offs that we made that enabled us a path to that cost structure. On the fixed cost side, you know, with ramping at normal, you know, you should get some benefit there. Talk a little bit about your plans with Georgia, right? I think there's potentially a risk that if you ramp too quickly in Georgia, then you're at the same place from like a fixed cost absorption standpoint that you are today with R1, just given the amount of capacity you have. Just talk a little bit about how you're planning on ramping and expanding Georgia and, you know, making sure that matches the demand profile that you're seeing with R2 and eventually R3 as well. Sure. It's important to note that the Georgia plant is going to be a plant that will house production of our mid-size platform. That reflects R2, the R3 product. You can imagine, you know, additional variants of those vehicles that will be situated on the same platform as well. Again, that reinforces just the strength of the technologies that sit at the foundation of our product roadmap as well, that we can then leverage to meet lots of different consumer choices, lifestyles to a form factor that truly meets your specific needs. There's certainly significant runway as we think about the size of the total addressable market that the mid-size SUV and crossovers address. Georgia will also be a key launch point for us to begin exporting product to Europe and building brands. It's not just the North American market share and potential. It's really how do we take what's designed as a global platform and take full advantage of that as well over the longer term. Yeah. On the demand side, maybe I'll pull James back in for a second. You know, we talked about how autonomy feels like it's a big driver for EV demand going forward. We hear that there's a lot of, you know, people who own a EV today that maybe one of your peers is EVs and that they wanna switch, but they wanna wait until they have the equivalent of, you know, an FSD on the vehicle. How much are you hearing that? You know, does that make you or do you wish to maybe accelerate your path to launching some of those programs or some of those offerings so that you can compete with some of the other players in the market and make sure that you are, you know, really ramping into the capacity and that R2 demand is really going where you want it to go? Absolutely. I think you see that from consumers more and more as these features get better and actually as well as consumers get more familiar with, like, robotaxi efforts, they require more of their own vehicle. I think we definitely, you know, see that in the market and are working very quickly to improve the system to get us to that point. As I say, with the launch of UHF last year, you know, best in class hands-free system. This year, we're really shooting for that point to point early system that will start to get customers' hands end of this year. We actually demoed that at the AI Day. We're making very rapid progress. A lot of that is powered by this large driving model that is essentially learned from all of the human supervised driving data that we've collected from our fleets. It's very capable, very powerful. It has this amazing generalization that you can take it to new areas, it sort of, kind of just works. A lot of the work this year will be sort of, you know, finessing that system, putting the right guardrails around it so that we can get that product out. I think, you know, consumers should feel confident that the Autonomy+, you know, today is just the start. We're gonna be improving that system. We'll be best in class within that package. Yeah. With R2, with the new chip and the LiDAR, then we can take it to that next level. I do think that there's probably there's a step change coming. Once we get to sort of true eyes off, that's something that would really give you your time back on a long commute. I think there you'll see consumer preferences really start to shift where that now becomes not just, like, a nice additional feature, but a must-have. Mm-hmm. You can imagine people buying not one R2, but two R2s, right? Yeah. Both members of the household need to have that feature. I think, yeah, that's a very exciting future, I think. That's great. Yeah. When we come back to the demand side, I think you've talked about R1 and the commercial vehicle demand profile you're expecting to be roughly stable or flat year-over-year. Talk a little bit about, you know, you even mentioned that, you know, when the influencer said that, you know, when they sat in the R2, it felt like it was the R1. How do you balance that from, like, a cannibalization standpoint to ensure that demand for R1 is still strong given the fact that R2 is much more accessible for a lot of people at that price point? One of the distinct advantages we have is truly a different form factor. There are many households where they need to have a three-row, seven-passenger SUV to meet their, you know, personal lifestyle needs. For those consumers, they're still gonna gravitate towards, you know, an R1. For some of the more price-conscientious consumers, we also have the opportunity to sell them a used R1 as well as they think about their specific choice. There will be many consumers that R2 is certainly the right form factor for their, you know, personal needs and use cases. As we look at the evolution of the R1 product portfolio, R1 will continue to skew more premium and create a pretty big, you know, gap relative to the price point and sizing of the R2 over time as well. Got it. you know, on the commercial side of the business... Mm-hmm. The commercial vehicle, talk a little bit about what you're seeing there with Amazon and maybe outside of Amazon, you know, the traction you're getting with some new customers. Amazon's been the big customer for you in that vehicle historically, but what are you seeing from others, and maybe what are some of the gating factors to getting some other corporates or commercial customers to actually adopt, you know, an electric vehicle as a last-mile delivery option? We do expect to see growth of the commercial van. That growth is predominantly driven by Amazon specifically. We're launching new variants for Amazon, including a larger battery pack variant of the van and all-wheel drive variant so that they can use the EDV for more rural routes within their network. This growth is also testament to the total cost of ownership that the EDV does provide. As we think about the opportunity for other fleet operators and owners, it's the continued education of the TCO benefits of managing, operating a software-defined vehicle. In the case of Amazon, we're also very well integrated into, you know, their own software applications. We have a FleetOS, a fleet management software subscription attached to each vehicle in the fleet and are really proud about the opportunity to electrify the delivery space at scale with the largest, you know, customer in last mile delivery. I think it will take some time as well for other fleet operators to make the infrastructure investments and begin to more holistically electrify their fleets. Back to the conversation on autonomy, I think we will certainly see that as sort of another catalyst that will significantly advantage the TCO of an autonomous, you know, commercial van in the future as well. Yeah. Yeah. That'll be interesting to see how it, you know, eventually when all these vehicles are autonomous and presumably you're planning on rolling it out to the commercial vehicles at some point as well. You know, on the you mentioned software and services. That seems to be a bright spot where you always exceed expectations in that part of your business. Talk a little bit about, you know, you've got the JV in there, and then you've got, you know, your core software services business. Talk about the path to profitability and the drivers there in terms of the growth that you're seeing and that you're expecting this year. How should we as, you know, investors or sell-siders expect or model that out going forward in terms of really driving that path to profitability for Rivian? In 2025, our software and services was just about $1.6 billion in total revenue. As we look at the year ahead, we anticipate the growth to begin to approach about 60%. That's driven both by the growth of the joint venture, but also importantly as the car part continues to grow and expand, we see a compounding of many of the other services within the portfolio. We talked a little bit about the launch of Autonomy+. In April, we'll start our paid subscriptions within the software and services component and see that as being a long-term catalyst for a margin expansion opportunity for us as well. The other large components outside of the joint venture are centered around our remote remarketing program. We're very focused on how do we preserve the residual values of our product and play a very active role in used market for Rivian. We also have a large component coming from our maintenance, repairs, serviceability, and then as we've talked a little bit about, you know, our FleetOS offering, our Connect+ offering, which is our advanced infotainment offering. Beyond that, financing, insurance. There's so much value that can be created throughout the ownership lifetime of a vehicle outside of just the initial purchase. Being a direct-to-consumer player like Rivian is a distinct advantage as you think about the opportunity to expand and enhance the lifetime value of each potential vehicle and each potential customer as well. Yeah. It's very clear, you know, you're working on a lot of things, autonomy, R2, eventually R3, Georgia ramping normal. How should investors think about how you fund all of this, right? There's a lot of exciting things that you're doing. Yeah. How do you bridge that gap until you really ramp R2, and you start becoming to a point where you're, you know, self-funding the business? What does that look like and what are kind of the sources of funding that you're expecting to tap into? We ended 2025 with $6.1 billion of cash. There's another two and a half billion dollars of payments, $2 billion of which we anticipate receiving in 2026 from Volkswagen Group. As we think about the build-out of Georgia, the Department of Energy loan is really a construction type project-based finance instruments that you can imagine will help us fund some of the growth of both the product portfolio and plant and facilities there as well over the future. Beyond that, we'll remain opportunistic as it pertains to additional sources of capital. Great. I wanna pause real quick and see if there's any questions in the room. All right. If none, you talked about it a little bit in your opening remarks about international potential expansion. What does that look like? You know, Europe is becoming, it feels like, a very competitive market, especially on EVs. You know, why would it make sense to go to Europe just given that competitive dynamic? You know, where do you see yourselves really playing in that market relative to some of the competitors there? We think there's a distinct advantage that stems from being a true clean sheet operator. Having an in-house, you know, electrical architecture, software stack, advanced autonomy, a fantastic product design, and a great brand reputation as well, that allows Rivian to compete not just in North America, but to compete on a more national stage as well. We were also encouraged by having a number of international reviewers come, you know, test drive the R2 as well, and the glowing feedback that they provided for the product and excitement. You know, they're saying, you know, begging us to get the R2s as quickly as possible into the continent of Europe as well. Excited about the opportunity to, you know, really stretch the brand even further. That design also is not just part of R2, but also as we think about R3, and that being a very compelling form factor, being sort of a smaller crossover vehicle for the continent of Europe. Is it just Europe or would Middle East or Latin America, any other markets that, you know, screen attractive given the form factor, or is it just Europe was like the first, you know, international plan for you guys? There certainly is a lot of interest beyond just Europe. Yeah. We also need to be methodical as we think about the building blocks of infrastructure and scaling the product in multiple locations across the world as well. Got it. You also mentioned, the partnerships that you have with, you know, Volkswagen and potentially expanding that or, you know, finding other partnerships with other OEMs. Can you talk about what that discussion looks like? What are some of the limitations in terms of, like, why others haven't come to the table and strictly, you know, done a similar deal that Volkswagen has done? Just trying to get a sense for That's ultimately would be a very attractive way to monetize the technology beyond just scaling up internally with R2 and R3. Just trying to get a sense for what's the timeline, what are some of the gating factors to actually making that happen with other partners. To date, only Rivian and Tesla are the two Western OEMs that have a zonal electrical architecture in the product. As we think about some of the design capabilities that will enable us to reduce the cost structure of R2, the electrical architecture is really central to that equation overall. As you think about other OEMs, we certainly see a world where, you know, the future is fully autonomous and software and AI defined. You will have to have those embedded capabilities in your product to compete in the future. I do imagine that there, you know, certainly will be OEMs that are either exploring things in their own standalone way, navigating this with, you know, Tier 1 partners, and ultimately will, you know, seek or explore opportunities, you know, potentially with Rivian in the future, given how compelling the electrical architecture platform is. If you take a step back and you look at what we're doing for Volkswagen Group, which is, you know, the second largest OEM in the world, and probably one of the more complex ones, given the variety of brand and breadth of form factors and price points within their portfolio. Rivian's ability to service the Volkswagen Group is really our best, you know, calling card as we think about other OEMs that, you know, may be interested in these capabilities in the future as well. Got it. To dovetail off of that, James, maybe for you, the RAP1 chip that you guys announced late last year, I think you just also talked about potentially finding, you know, buyers of that chip. How do you think about the evolution of that as a product, right? Is RAP1 good enough to get you to all the way to, like, eyes off, hands off and beyond? Or will you have to keep iterating on that? What does that look like from, like, a spend perspective, you know, going forward in terms of, like, capital intensity of the business? As you mentioned on the Autonomy & AI Day that we had last year, we announced the our in-house silicon effort. That's actually, you know, not something we did on a whim. That's a multi-year long effort to design and build and source that chip. The goal is for that chip to be in R2 at the end of this year. It will actually, as far as we know, be the most powerful automotive computer in the market, certainly in the U.S. It's a really incredible chip, incredible capability. It's really been designed for these transformer architectures, which are the, you know, these modern building blocks of LLMs. We think that that has certainly the capability to get all the way through to L3 and then personal Level 4. Great. Maybe to just close it out with a very high-level question for you, Claire. What do you think the market is getting wrong about Rivian and your story that you obviously, you know, portrayed today? What do you think we're missing? What do you think the market's missing about, you know, your strategy and your story more broadly? I think one of the elements that sometimes is missed or not fully understood is just the core technology advantages that a player like Rivian has. That's seen through our ability to recruit phenomenal talent like we see on, you know, James' team, as we see on our in-house silicon team, to bring together the best minds as we think about the evolution of our technology foundations for the future in a variety of different areas within the business as well. I also think that AI will be a distinct advantage for players that are in the direct-to-consumer space as well, where through the ownership, the end-to-end ownership, control, there's so many elements in which we can ultimately improve the ownership experience while also reducing cost over the longer term as well. That I think some of those key advantages within the story are sometimes, you know, overlooked or not necessarily fully appreciated. As you think about the complexities to build these capabilities in-house from, you know, the ground up, to have these as proven technologies that are operating and driving value to consumers, you know, already, today. Then the future roadmap as we look at to sort of package those technologies into R2 and the opportunity to scale with a mass market program. Well, great. Well, I think we're at time here. I appreciate it, and thanks for everyone for joining. Thank you.