rivn-20240331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2024


¨			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________ to ________

Commission file number 001-41042

Rivian Automotive, Inc.


(Exact name of registrant as specified in its charter)


Delaware	14600 Myford Road Irvine, California 92606	47-3544981
(State or other jurisdiction of incorporation or organization)	(Address of Principal executive offices) (ZIP Code)	(I.R.S. Employer Identification No.)


(888) 748-4261						N/A
(Registrant's telephone number, including area code)						(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Class A common stock, $0.001 par value per share

RIVN

The Nasdaq Stock Market

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports); and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☒	Accelerated filer	¨
Non-accelerated filer	¨	Smaller reporting company	¨
		Emerging growth company	¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No ☒

As of April 23, 2024, 987,495,232 shares of the registrant's Class A common stock were outstanding, and 7,825,000 shares of the registrant's Class B common stock were outstanding.

RIVIAN AUTOMOTIVE, INC.


FORM 10-Q
TABLE OF CONTENTS


						Page

			Forward-Looking Statements			2
			Risk Factors Summary			2
			Part I. Financial Information			4
			Item 1. Financial Statements (unaudited)			4
			Condensed Consolidated Balance Sheets			4
			Condensed Consolidated Statements of Operations			5
			Condensed Consolidated Statements of Comprehensive Loss			5
			Condensed Consolidated Statements of Changes in Stockholders' Equity			6
			Condensed Consolidated Statements of Cash Flows			7
			Notes to Condensed Consolidated Financial Statements			8
			Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations			19
			Item 3. Quantitative and Qualitative Disclosures about Market Risk			26
			Item 4. Controls and Procedures			26
			Part II. Other Information			28
			Item 1. Legal Proceedings			28
			Item 1A. Risk Factors			29
			Item 2. Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities			66
			Item 3. Defaults Upon Senior Securities			66
			Item 4. Mine Safety Disclosures			66
			Item 5. Other Information			66
			Item 6. Exhibits			68
			Signatures			69

FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q (“Form 10-Q”) contains forward-looking statements. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements other than statements of historical facts contained in this Form 10-Q may be forward-looking statements. In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “targets,” “projects,” “contemplates,” “believes,” “estimates,” “forecasts,” “predicts,” “potential” or “continue” or the negative of these terms or other similar expressions. Forward-looking statements contained in this Form 10-Q include, but are not limited to, statements regarding our future results of operations and financial position, industry and business trends, equity compensation, business strategy, plans, market growth, intended use of proceeds from the 2029 Green Convertible Notes (as defined herein) and 2030 Green Convertible Notes (as defined herein), and our objectives for future operations.

The forward-looking statements in this Form 10-Q are only predictions. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition, and results of operations. Forward-looking statements involve known and unknown risks, uncertainties, and other important factors that may cause our actual results, performance, or achievements to be materially different from any future results, performance, or achievements expressed or implied by the forward-looking statements, including, but not limited to, the important factors discussed in Part II, Item 1A “Risk Factors” and elsewhere in this Form 10-Q as well as in any subsequent filings. The forward-looking statements in this Form 10-Q are based upon information available to us as of the date of this Form 10-Q, and while we believe such information is a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain, and you are cautioned not to unduly rely upon these statements.

You should read this Form 10-Q and the documents that we reference in this Form 10-Q and have filed as exhibits to this Form 10-Q with the understanding that our actual future results, performance, and achievements may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements. These forward-looking statements speak only as of the date of this Form 10-Q. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained in this Form 10-Q, whether as a result of any new information, future events or otherwise.

As used in this Form 10-Q, unless otherwise stated or the context requires otherwise, references to “Rivian,” the “Company,” “we,” “us,” and “our,” refer to Rivian Automotive, Inc. and its consolidated subsidiaries.

RISK FACTORS SUMMARY

Our business is subject to a number of risks and uncertainties, including those described in Part II, Item 1A “Risk Factors” of this Form 10-Q. The principal risks and uncertainties affecting our business include the following:

•We are a growth stage company with limited operating history and a history of losses. We expect to incur significant expenses and continuing losses for the foreseeable future and may not be able to achieve or maintain profitability in the future.

•We expect to continue to incur significant cost of revenues, operating expenses, and capital expenditures, and we may underestimate or not effectively manage the cost of revenues, operating expenses, and capital expenditures associated with our business and operations.

•We will require additional financings to raise capital to support our business, which may not be available in a timely manner or on terms that are acceptable, or at all.

•The success of our business depends on attracting and retaining a large number of customers and maintaining strong demand for our vehicles. If we are unable to do so, we will not be able to achieve profitability.

•The automotive market is highly competitive, and we may not be successful in competing in this industry.

•Our future growth is dependent on the demand for, and upon consumers’ willingness to adopt, electric vehicles (“EVs”).

•Our long-term results depend upon our ability to successfully introduce, integrate, and market new products and services, which may expose us to new and increased challenges and risks, and any inability to do so could materially and adversely affect our business, prospects, financial condition, results of operations, and cash flows.

•We have experienced, and may in the future experience, significant delays in the manufacture and delivery of our vehicles, which could harm our business, prospects, financial condition, results of operations, and cash flows.

•We have experienced, and could experience in the future, cost increases and disruptions in supply of raw materials or other components used in our vehicles.

•We are dependent on our existing suppliers, a significant number of which are single or limited source suppliers, and are also dependent on our ability to source suppliers, for our critical components, and to complete the building out of our supply chain, while effectively managing the risks due to such relationships.

•We may not be able to accurately estimate the supply and demand for our vehicles, which could result in a variety of inefficiencies in our business and hinder our ability to generate revenues and profits. If we fail to accurately predict our manufacturing requirements, we could incur additional costs or experience delays.

•A significant portion of our revenues has been from one customer that is an affiliate of one of our principal stockholders. If we are unable to maintain this relationship, or if this customer purchases significantly fewer vehicles than we currently anticipate, then our business, prospects, financial condition, results of operations, and cash flows could be materially and adversely affected.

•We are highly dependent on the services and reputation of Robert J. Scaringe, our Founder and Chief Executive Officer (“CEO”).

•Breaches in data security, failure of information security systems, cyber attacks or other security or privacy-related incidents affecting us or our suppliers could have a material adverse effect on our reputation and brand, harm our business, prospects, financial condition, results of operations, and cash flows and subject us to legal or regulatory fines or damages.

•We are, and may in the future become, subject to patent, trademark and/or other intellectual property infringement claims, which may be time-consuming, cause us to incur significant liability, and increase our costs of doing business.

•Our vehicles are subject to motor vehicle safety standards and the failure to satisfy such mandated safety standards would have a material adverse effect on our business, prospects, financial condition, results of operations, and cash flows.

•We may be exposed to delays, limitations, and risks related to permits and other approvals required to build, operate, or expand operations at our manufacturing facilities and face risks in connection with the construction and development of our Stanton Springs North Facility.

•Increasing scrutiny and changing expectations from global regulators, our investors, consumers and employees with respect to our environmental, social, and governance (“ESG”) practices may impose additional costs on us or expose us to new or additional risks.

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements (unaudited)

RIVIAN AUTOMOTIVE, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in millions, except per share amounts)

(unaudited)


	December 31, 2023		March 31, 2024

ASSETS
Current assets:
Cash and cash equivalents (Note 3)	$	7,857	$	5,979
Short-term investments (Note 3)	1,511		1,879
Accounts receivable, net	161		389
Inventory (Note 4)	2,620		2,797
Other current assets	164		270
Total current assets	12,313		11,314
Property, plant, and equipment, net (Note 5)	3,874		3,830
Operating lease assets, net	356		379
Other non-current assets	235		211
Total assets	$	16,778	$	15,734

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	981	$	1,019
Accrued liabilities (Note 7)	1,145		1,018


Current portion of lease liabilities and other current liabilities	361		364
Total current liabilities	2,487		2,401
Long-term debt (Note 6)	4,431		4,433
Non-current lease liabilities	324		345
Other non-current liabilities	395		486
Total liabilities	7,637		7,665
Commitments and contingencies (Note 11)
Stockholders' equity:
Preferred stock, $0.001 par value; 10 shares authorized and 0 shares issued and outstanding as of December 31, 2023 and March 31, 2024	—		—
Common stock, $0.001 par value; 3,508 and 3,508 shares authorized and 968 and 994 shares issued and outstanding as of December 31, 2023 and March 31, 2024, respectively (Note 12)	1		1
Additional paid-in capital	27,695		28,070
Accumulated deficit	(18,558)		(20,004)
Accumulated other comprehensive income	3		2
Total stockholders' equity	9,141		8,069
Total liabilities and stockholders' equity	$	16,778	$	15,734

See accompanying notes to these condensed consolidated financial statements.

RIVIAN AUTOMOTIVE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in millions, except per share amounts)

(unaudited)


	Three Months Ended March 31,
		2023		2024
Revenues (Note 2)		$	661	$	1,204
Cost of revenues		1,196		1,731
Gross profit		(535)		(527)
Operating expenses
Research and development		496		461
Selling, general, and administrative		402		496

Total operating expenses		898		957
Loss from operations		(1,433)		(1,484)
Interest income		124		112
Interest expense (Note 6)		(38)		(75)

Other (expense) income, net		(1)		2
Loss before income taxes		(1,348)		(1,445)
Provision for income taxes		(1)		(1)
Net loss		$	(1,349)	$	(1,446)
Net loss attributable to common stockholders, basic and diluted		$	(1,349)	$	(1,446)
Net loss per share attributable to Class A and Class B common stockholders, basic and diluted (Note 12)		$	(1.45)	$	(1.48)
Weighted-average common shares outstanding, basic and diluted		930		978

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(in millions)

(unaudited)


	Three Months Ended March 31,
		2023		2024
Net loss		$	(1,349)	$	(1,446)

Other comprehensive income (loss)		1		(1)
Comprehensive loss		$	(1,348)	$	(1,447)

See accompanying notes to these condensed consolidated financial statements.

RIVIAN AUTOMOTIVE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(in millions)

(unaudited)


	Stockholders' Equity
	Common Stock			Additional Paid-In Capital		Accumulated Deficit		Accumulated Other Comprehensive (Loss) Income
	Shares	Amount								Total
BALANCE - December 31, 2022	926	$	1	$	26,926	$	(13,126)	$	(2)	$	13,799
Capital stock issuance	13	—		5		—		—		5
Stock-based compensation	—	—		286		—		—		286
Other comprehensive income	—	—		—		—		1		1
Net loss	—	—		—		(1,349)		—		(1,349)
BALANCE - March 31, 2023	939	$	1	$	27,217	$	(14,475)	$	(1)	$	12,742















BALANCE - December 31, 2023	968	$	1	$	27,695	$	(18,558)	$	3	$	9,141
Capital stock issuance	26	—		1		—		—		1
Stock-based compensation	—	—		374		—		—		374
Other comprehensive loss	—	—		—		—		(1)		(1)
Net loss	—	—		—		(1,446)		—		(1,446)
BALANCE - March 31, 2024	994	$	1	$	28,070	$	(20,004)	$	2	$	8,069

See accompanying notes to these condensed consolidated financial statements.

RIVIAN AUTOMOTIVE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in millions)

(unaudited)


	Three Months Ended March 31,
	2023		2024
Cash flows from operating activities:
Net loss	$	(1,349)	$	(1,446)
Depreciation and amortization	188		280
Stock-based compensation expense	183		233


Inventory LCNRV write-downs and losses on firm purchase commitments	229		150
Other non-cash activities	2		53
Changes in operating assets and liabilities:
Accounts receivable, net	(55)		(228)
Inventory	(781)		(435)
Other assets	(29)		(81)
Accounts payable and accrued liabilities	22		113
Other liabilities	69		92
Net cash used in operating activities	(1,521)		(1,269)

Cash flows from investing activities:
Purchases of short-term investments	—		(902)
Maturities of short-term investments	—		550

Capital expenditures	(283)		(254)

Net cash used in investing activities	(283)		(606)

Cash flows from financing activities:

Proceeds from issuance of capital stock	3		2
Proceeds from issuance of convertible notes	1,485		—

Other financing activities	(3)		(4)
Net cash provided by (used in) financing activities	1,485		(2)

Effect of exchange rate changes on cash and cash equivalents	—		(1)
Net change in cash	(319)		(1,878)
Cash, cash equivalents, and restricted cash—Beginning of period	12,099		7,857
Cash, cash equivalents, and restricted cash—End of period	$	11,780	$	5,979

Supplemental disclosure of non-cash investing and financing activities:
Capital expenditures included in liabilities	$	333	$	383
Capital stock issued to settle bonuses	$	137	$	179

Right-of-use assets obtained in exchange for operating lease liabilities	$	11	$	52

See accompanying notes to these condensed consolidated financial statements.


RIVIAN AUTOMOTIVE, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

1. NATURE OF OPERATIONS AND PRESENTATION

Description and Organization

Rivian Automotive, Inc. (together with its consolidated subsidiaries, “Rivian” or the “Company”) was incorporated as a Delaware corporation on March 26, 2015. Rivian was formed for the purpose of designing, developing, manufacturing, and selling category-defining electric vehicles (”EVs”), accessories, and related services directly to customers in the consumer and commercial markets. The nature of the Company’s operations is primarily the production and sale of EVs in the United States.

Basis of Presentation - Interim Financial Statements

The accompanying condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”) and the applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial information. Accordingly, they do not include all disclosures, including certain notes, required by U.S. GAAP on an annual reporting basis. These condensed consolidated financial statements are unaudited and, in the opinion of management, reflect all normal recurring adjustments necessary to fairly present the financial position, results of operations, cash flows, and change in equity for the periods presented. Results for the periods presented are not necessarily indicative of the results that may be expected for any subsequent period. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 (“Form 10-K”). Certain amounts in the prior period condensed consolidated financial statements have been aggregated to conform to current period presentation.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates

Accounting estimates are an integral part of the condensed consolidated financial statements. These estimates require the use of judgments and assumptions that may affect the reported amounts of assets, liabilities, revenues, and expenses in the periods presented. Estimates are used for, but not limited to, inventory valuation, property, plant, and equipment, warranty reserves, leases, income taxes, stock-based compensation, commitments and contingencies, and residual value risk sharing (“RVRS”) liability. The Company believes that the accounting estimates and related assumptions employed by the Company are appropriate and the resulting balances are reasonable under the circumstances. However, due to the inherent uncertainties involved in making estimates, the actual results could differ from the original estimates, requiring adjustments to these amounts in future periods.

Derivative Instruments

In the normal course of business, the Company is exposed to global market risks, including the effect of changes in certain commodity prices, interest rates, and foreign currency exchange rates, and may enter into derivative contracts, such as forwards, options, swaps, or other instruments, to manage these risks. Derivative instruments are recorded on the Condensed Consolidated Balance Sheets in either “Other current assets” or “Current portion of lease liabilities and other current liabilities” and are measured at fair value. They are classified within Level 2 of the fair value hierarchy because they are valued using observable inputs other than quoted prices for identical assets or liabilities in active markets.

For commodity contracts, the Company records gains and losses resulting from changes in fair value in “Cost of revenues” in the Condensed Consolidated Statements of Operations and cash flows in “Cash flows from operating activities” in the Condensed Consolidated Statements of Cash Flows. The Company also may enter into master netting agreements with its counterparties to allow for netting of transactions with the same counterparty. The Company does not utilize derivative instruments for trading or speculative purposes.

The Company has entered into commodity contracts, and the resulting asset, liability, and aggregate notional amount were not material as of December 31, 2023 and March 31, 2024. These derivatives are economic hedges used to manage overall


RIVIAN AUTOMOTIVE, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

price risk and have not been designated as hedging instruments. During the three months ended March 31, 2023 and 2024, losses resulting from changes in fair value were not material.

Revenues

Vehicle Sales

The Company’s revenues primarily include revenue from the sale of EVs and specific services that meet the definition of a performance obligation, including over-the-air (“OTA”) vehicle software updates. Revenue from the sale of EVs is recognized at a point in time when control transfers to the customer or the lessee of JPMorgan Chase Bank, N.A. (“Chase Bank”), the Company’s financial institution providing leasing, which generally occurs upon delivery. Revenue from the sale of Electric Delivery Vans (“EDVs”) is recognized in accordance with a bill and hold arrangement, under which risk of ownership has been transferred to the customer but delivery is delayed at the request of the customer. In such cases, the EDVs are separately identified as belonging to the customer, ready for physical delivery to the customer, and the Company does not have the ability to sell the EDVs to another customer.

Payment for EV sales is typically received at or prior to delivery or according to payment terms customary to the business. Sales tax is excluded from the measurement of the transaction price. As the OTA vehicle software updates represent a stand ready obligation to provide these services, revenue related to OTA vehicle software updates is recognized ratably throughout the performance period, beginning when control of the vehicle is transferred to the customer or the lessee of Chase Bank, and continuing through the estimated useful life of the EV.

The Company has an obligation to share a portion of the difference between the residual value realized by Chase Bank at the end of the lease term and the residual value determined at lease inception. This obligation is recorded as a RVRS liability in “Other non-current liabilities” on the Condensed Consolidated Balance Sheets upon delivery. The RVRS liability is comprised of management’s estimate of the amount the Company is expected to pay to Chase Bank at the end of the lease term and is bifurcated from the transaction price. These estimates are based on third-party residual value publications and estimated future prices. The Company reevaluates the adequacy of the RVRS liability on a regular basis and makes revisions when necessary. These estimates are inherently uncertain, especially given the Company’s limited history of leases, and more historical experience or updates to benchmarks and projections may cause material changes to the RVRS liability in the future. As of March 31, 2024 the RVRS liability was not material.

The standalone selling prices of performance obligations are estimated by considering costs to develop and deliver the good or service, third-party pricing of similar goods or services, and other available information. The transaction price is allocated among the performance obligations in proportion to the standalone selling prices.

During the three months ended March 31, 2024, approximately 23% of the Company’s revenues was from Chase Bank.

Other Revenues

The Company generates tradable credits from various regulatory standards primarily related to zero-emission vehicles (“ZEVs”) and greenhouse gas. The Company sells these credits to other manufacturers. Revenues are recognized at the time control of the regulatory credits is transferred to the purchasing party, and payment is typically received in accordance with customary payment terms. Other revenues consist primarily of sales of vehicle trade-ins (“remarketing”), repair and maintenance services, vehicle accessories, charging, and other complementary services.

Contract Liabilities

The Company recognizes contract liabilities when payments are received or due before the related performance obligation is satisfied. The Company’s contract liabilities are primarily related to payments for vehicles collected prior to delivery of the EV, generally satisfied within one quarter or less, OTA vehicle software updates, generally satisfied over the estimated useful life of the EV, and extended service contracts, satisfied over the coverage period. The Company’s contract liabilities exclude fully-


RIVIAN AUTOMOTIVE, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

refundable customer deposits. The following table summarizes the Company’s contract liabilities recorded by line item on the Condensed Consolidated Balance Sheets (in millions):


	December 31, 2023		March 31, 2024
Current portion of lease liabilities and other current liabilities	$	88	$	91
Other non-current liabilities	133		158
Total contract liabilities	$	221	$	249

Warranty and Field Service Actions

The Company provides a manufacturer’s warranty on new consumer vehicles. A warranty reserve is accrued at the time of sale or once a specific field service action has been identified. The amount accrued is comprised of management’s estimate of the projected costs to repair, replace, or adjust defective component parts under the applicable warranty period and identified field service actions. These estimates are based on an analysis of actual claims incurred to date and expectations of the nature, frequency, and costs of future claims by vehicle model, including relevant benchmark data. The Company reevaluates the adequacy of the warranty reserve on a regular basis and makes revisions when necessary. Warranty estimates are inherently uncertain, especially given the Company’s limited history of sales, and more historical experience or updates to benchmarks and projections may cause material changes to the warranty reserve in the future.

The following table summarizes the Company’s warranty and field service action reserve recorded by line item on the Condensed Consolidated Balance Sheets (in millions):


	December 31, 2023		March 31, 2024
Current portion of lease liabilities and other current liabilities	$	91	$	68
Other non-current liabilities	184		249
Total warranty reserve	$	275	$	317

Warranty expense is recorded as a component of “Cost of revenues” in the Company’s Condensed Consolidated Statements of Operations. The Company’s warranty and field service action activity for the three months ended March 31, 2023 was primarily for warranties issued during the period. The following table presents the warranty and field service action activity for the three months ended March 31, 2024 (in millions):



	Three Months Ended March 31, 2024

Beginning balance	$	275
Warranties issued in period	49
Adjustments to pre-existing warranties	6
Warranty costs incurred	(13)
Ending balance	$	317

Concentration of Risk

Counterparty Credit Risk

Financial instruments that potentially subject the Company to concentration of counterparty credit risk consist of cash and cash equivalents, short-term investments, customer deposits, derivative instruments, and debt. The Company is exposed to credit risk on cash to the extent that a balance with a financial institution exceeds the Federal Deposit Insurance Company insurance limits. The Company is exposed to credit risk on cash equivalents and short-term investments to the extent that counterparties are unable to settle maturities or sales of investments and on customer deposits to the extent that counterparties are unable to complete the corresponding purchase transaction. The Company is exposed to credit risk on derivative instruments to the extent that counterparties are unable to settle derivative asset positions and on debt to the extent that the senior secured asset-based revolving credit facility (“ABL Facility”) lenders are not able to extend credit. The


RIVIAN AUTOMOTIVE, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

degree of counterparty credit risk varies based on many factors, including the duration of the transaction and the contractual terms of the agreement.

As of December 31, 2023 and March 31, 2024, all of the Company’s cash, typically in amounts exceeding insured limits, was distributed across several large financial institutions that the Company believes are of high credit quality. Management evaluates and approves credit standards and oversees the credit risk management function related to cash equivalents, short-term investments, and customer deposits. As of December 31, 2023 and March 31, 2024, the counterparties to the Company’s derivative instruments and the ABL Facility lenders are financial institutions that the Company believes are of high credit quality.

Supply Risk

The Company is subject to risks related to its dependence on its suppliers, the majority of which are single source providers of input materials or components for the Company’s products. Any inability or unwillingness of the Company’s suppliers to deliver necessary input materials or product components, including semiconductors, at timing, prices, quality, and volumes that are acceptable to the Company could have a material impact on the Company’s business, prospects, financial condition, results of operations, and cash flows. Fluctuations in the cost of input materials or product components and supply interruptions or shortages could materially impact the Company’s business.

Upcoming Accounting Standards Not Yet Adopted

ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures updates required disclosures of significant reportable segment expenses that are regularly provided to the chief operating decision maker (“CODM”) and included within each reported measure of a segment's profit or loss. This ASU also requires disclosure of the title and position of the individual identified as the CODM and an explanation of how the CODM uses the reported measures of a segment’s profit or loss in assessing segment performance and deciding how to allocate resources. The ASU is effective for annual periods beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, though early adoption is permitted. Adoption of the ASU should be applied retrospectively to all prior periods presented in the financial statements. The Company is currently evaluating the presentational impact of this ASU and expects to adopt in the year ended December 31, 2024.

ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures enhances the transparency and usefulness of income tax disclosures. The updates are effective for annual periods beginning after December 15, 2024 on a prospective or retrospective basis, though early adoption is permitted. The Company is currently evaluating the presentational impact of this ASU and expects to adopt in the year ended December 31, 2025.

3. FAIR VALUE MEASUREMENTS

Cash and cash equivalents include cash in banks, highly liquid investments, and term deposits with maturities of three months or less recorded in “Cash and cash equivalents” on the Condensed Consolidated Balance Sheets. Short-term investments are


RIVIAN AUTOMOTIVE, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

available-for-sale debt securities and term deposits with maturities over three and up to twelve months recorded in “Short-term investments” on the Condensed Consolidated Balance Sheets.

The following table presents the fair value of the Company’s cash and cash equivalents and short-term investments and their corresponding level within the fair value hierarchy:


	December 31, 2023			March 31, 2024
	Level	Amount (in millions)		Level	Amount (in millions)
Cash and cash equivalents:
Cash		$	1,245		$	1,094
Money market funds	1	6,070		1	4,701
Commercial paper	2	517		2	134
Term deposits	—	—		2	50
United States Treasury securities	1	25		1	—

Total		$	7,857		$	5,979

Short-term investments:
Commercial paper	—	$	—	2	$	366
United States Treasury securities	1	1,061		1	1,088
Term deposits	2	450		2	425
Total		$	1,511		$	1,879

Total cash and cash equivalents and short-term investments		$	9,368		$	7,858

As of December 31, 2023 and March 31, 2024, the fair value of cash equivalents and short-term investments approximated their cost. Fair value measurements classified within Level 2 of the fair value hierarchy are determined using observable inputs other than quoted prices for identical assets in active markets.

Refer to Note 2 “Summary of Significant Accounting Policies” and Note 6 "Debt" for more information about the fair value of the Company’s derivative instruments and debt, respectively.

4. INVENTORY AND INVENTORY VALUATION

The following table summarizes the components of “Inventory” on the Condensed Consolidated Balance Sheets (in millions):


	December 31, 2023		March 31, 2024
Raw materials and work in progress	$	1,584	$	1,825
Finished goods	1,036		972
Total invent

SEC Form 10-Q filed by Rivian Automotive Inc.