Yahoo Finance Live anchors discuss second-quarter earnings for Rivian.

Video Transcript

BRAD SMITH: Well, one other area that we're tracking here this morning-- I mean, we're tracking a lot of them-- but Rivian. Let's talk about RIVN. There you're seeing the shares on your screen right now. Premarket, up by about 7/10%. This is after it reported losing $1.7 billion in the second quarter. This is as the EV manufacturer announces it's ramping up production and adding a second shift to its Illinois manufacturing plant.

There's really a lot to dive into here on Rivian. But there you're just taking a look at some of the production numbers, the capacity. And the production in total was up 72% year-over-year. I know there's a lot that you want to get into here with Rivian. But I'll just add here briefly that during the second quarter, they produced 4,401 vehicles, delivered 4,467 vehicles, and generated about $364 million of revenue, primarily based on those vehicles delivered during the quarter.

BRIAN SOZZI: Yeah, I think the market also liked that Rivian said on its conference call, they're going to add a second assembly line or a second shift at the end of the third quarter. Perhaps to start working through this backlog of 98,000 vehicles, all these preorders that they have. And of course, that they put right on top of there release, over 100,000 orders from Amazon.

But Brad, I'm alarmed by how much money this company continues to lose. I get they're in startup. I get they're making very capital intensive electric vehicles that, you know, really wealthy folks want to ride at some point whenever they might arrive. But they lost $1.7 billion in this quarter. Year-to-date, they have lost close to $2 and 1/2 billion.

A little perspective here, I put out a tweet on this morning, year-to-date, Tesla has earned about almost $9 billion in adjusted operating profits. Two companies, again, different points in the life cycle. But still, the Street is just clinging to this notion that Rivian is not going to have to raise money or raise capital next year. And that might be the wrong assumption here as this company continues to hemorrhage cash and lose a lot of money.

BRAD SMITH: Yeah, one other thing to think about, too, here is where they're actually gonna see margins come into play. They have an average selling price, as that they had seen during their pre-March 1 preorders that allows them to kind of correlate that to their current average selling price of about $93,000. The average selling price of about $93,000 for the Rivian vehicles with the preorders that they have. Postpricing change, all of that considered, for any of the EV makers right now.

The question is, where are you gonna see those margins come in so that you can actually reinvest that into the operations? At this point in time, it's gonna come also down to making sure that even in an environment where you may be paying more for the materials, the raw materials that go into the battery, because it is a battle of the battery at the end of the day for the EVs. And Tesla has been far and away the leader there.

But now, as you see more entrants into the space, especially on the trucking side, where I think considering what we've seen from Ford for four decades with the F-series being the best selling vehicle in the US, this is gonna be a highly competitive category.

Rivian has got to get the production right in this near term and able to fend off some of that competition. Oh, yeah, I might add that the Ford Lightning, that's a vehicle that a lot of people-- that is getting a lot of chatter right now. And the preorders are starting to rack up within that segment of the auto manufacturing industry.

BRIAN SOZZI: Right on. And also, we had a couple of takeaways here, too, as well for this quarter. Hopefully, that's of help to some investors. But I'll add this, too, look, it's hard to get excited about Rivian. And I was trying to figure out, why am I not more excited about this company? The trucks are cool. This story is interesting.

BRAD SMITH: It's got the Bezos attachment.

BRIAN SOZZI: I think the founder-- you can see our takeaways on Rivian's quarter right there. But I think the founder, RJ Scaringe, needs to get out of his foxhole. And start getting out there more aggressively, and talking about why he loves this brand and what he's trying to do. Now, that doesn't mean he has to be a buffoon, like Tesla CEO Elon Musk. He doesn't have to go for Musk.

BRAD SMITH: No.

BRIAN SOZZI: But could he be a little bit more like Ford CEO Jim Farley? Be out there aggressive. Because you have, I bet, if I were to go outside of this building here, the Yahoo Finance Headquarters, and poll 10 people on what Rivian is, all 10 might not even know. And that's a big problem.

BRAD SMITH: Unless they've seen a SpaceX-- or not a SpaceX, excuse me, a Blue Origin launch which they were paraded around the grounds for every single Blue Origin launch, whether it was William Shatner, whether it was name any celebrity that is going to space. And particularly here with Jeff Bezos, perhaps that was the poster child or the figurehead that they were looking to put around Rivian in order to ensure that it had that type of fanfare, that it had that person or that figure, that profile, that they can next the rest of the brand to.

So in the interim period of time, even while they've got the preorders, now it just comes down to the operational ability. And that's where I do agree with you 100%. We need to hear more from the executives that are actually running the company right now.

BRIAN SOZZI: Yeah, I'd watch a commercial for Rivian with Jeff Bezos in there, hanging out with his big muscular arms outside of this electric vehicle. I'm down. This guy is jacked. But--