According to CNBC, Rivian Automotive beat Wall Street’s third-quarter expectations by reporting a $24 million gross profit when analysts expected a $38.6 million loss. The company achieved this through a combination of its Volkswagen joint venture contributing $154 million and its software and services business, which offset a $130 million loss in its core automotive operations. Rivian maintained its previously lowered 2025 guidance, projecting an adjusted earnings loss between $2 billion and $2.25 billion with capital expenditures of $1.8 billion to $1.9 billion. The company expects to deliver between 41,500 and 43,500 vehicles this year, showing continued confidence in its production targets despite ongoing challenges in the electric vehicle market.
The Profit Puzzle
Here’s what’s really interesting about Rivian’s numbers. The company technically lost money making and selling electric vehicles – $130 million worth, to be exact. But they managed to turn that into an overall profit through what amounts to financial engineering. The Volkswagen joint venture and software/services business brought in enough to cover those losses and then some.
Now, is this sustainable? That’s the billion-dollar question. The automotive losses actually improved by $249 million compared to last year, which suggests Rivian is getting better at controlling production costs. But they’re still relying heavily on non-core business lines to make the numbers work. The company didn’t break down how much of that $154 million came from the VW deal versus software, which leaves some questions about the quality of this profit.
The Guidance Gamble
What’s equally telling is what Rivian didn’t change – their 2025 guidance. They’re sticking with that $2 billion to $2.25 billion loss projection, which basically says “we told you this would be messy, and we meant it.” The capital expenditure range of $1.8 billion to $1.9 billion shows they’re still investing heavily in growth, while the delivery target of 41,500 to 43,500 vehicles suggests they’re confident about demand.
But here’s the thing: maintaining guidance after a better-than-expected quarter could mean they’re being conservative, or it could mean they see headwinds coming. In this EV market, with demand softening and competition intensifying, playing it safe might be the smart move. The fact that they’d already lowered this guidance earlier makes sticking with it less surprising.
The Bigger Picture
Rivian’s story is becoming less about pure electric vehicle manufacturing and more about becoming a diversified mobility company. The software and services revenue is particularly interesting because it’s higher-margin and recurring. If they can build that business while gradually reducing automotive losses, they might actually have a path to sustainable profitability.
The Volkswagen partnership is doing exactly what partnerships should do – providing capital and spreading risk. In an industry where everyone is burning cash, having a deep-pocketed partner like VW provides crucial breathing room. Basically, Rivian is using every tool in the toolbox to survive the EV transition, and this quarter shows that strategy might just be working.
