There are many reasons to be cautiously optimistic about Rivian’s future. The startup said on Thursday that it turned its first quarterly profit at the end of last year. It has streamlined production and its plans to launch the affordable R2 are moving at full speed. And let’s be honest, Rivian doesn’t carry Tesla’s baggage. In a polarized world, a clean brand image could be its golden ticket to winning over buyers across the political and cultural spectrums without having them plaster dissenting bumper stickers on their cars.
But 2025 will be another test for Rivian. With potential tariffs looming and the threat of consumer EV incentives vanishing, the road ahead is anything but smooth.
Welcome to the Friday edition of Critical Materials, your daily round-up of news and events shaping up the world of electric cars. Also on today’s radar: China’s EV market may be world-class, but the cutthroat competition is killing smaller brands, leaving behind cars that no longer receive software upgrades and periodic repairs. Plus, Japan now wants Tesla to invest in Nissan in what seems to be the most bizarre twist of events in the Honda-Nissan merger saga.
30%: Policy Shifts May Hit Rivian Hard This Year
Photo by: Rivian
Rivian reached a milestone in 2024, achieving its first quarterly gross profit of $170 million in the final quarter. That’s a significant improvement from its gross loss of $606 million in the final quarter of 2023. For the year, its net loss from operations reduced from $5.7 billion in 2023 to $4.7 billion in 2024.
Even though Rivian is forecasting a modest gross profit for 2025, it is expecting a massive impact from President Trump’s potential tariffs on Mexico and Canada and the looming threat to the consumer incentives for EVs.
“Our outlook reflects our current view on potential adjustments, and that includes things like incentives, regulations, tariff structures,” Rivian’s Chief Financial Officer Claire McDonough said during Thursday’s earnings call. “As we look at the impact in aggregate, our guidance does reflect hundreds of millions of dollars of impact to Rivian’s EBITDA, inclusive of potential demand impacts,” McDonough added.
A significant chunk of Rivian’s revenue last year came from selling regulatory credits—totaling $325 million for fiscal year 2024—to other automakers to help them meet emissions goals. Tesla similarly netted $2.8 billion by selling regulatory credits last year.
Photo by: Rivian
McDonough added that $300 million in regulatory credit sales are factored into its 2025 outlook. Despite that, a modest gross profit is only a possibility, not a certainty, which explains the colossal impact President Trump’s policy decisions might have on automakers. These companies like regulatory certainty to forge their path toward the future. Dabbling back and forth between policy shifts stunts that growth.
Despite the headwinds, Rivian’s future looks promising. During its earnings call, it sounded more like a tech-forward automaker doubling down on software and autonomy. The second-generation R1 models have a dramatically simplified electrical architecture. The company also streamlined manufacturing and set the stage for the R2. Rivian has already locked in contracts for 95% of the R2’s bill of materials while slashing material costs by 50%.
A hands-free driver assistance system is weeks away, with a more advanced hands-off, eyes-off system potentially arriving next year. And then there’s Rivian’s $5.8 billion deal with Volkswagen to co-develop software and electrical architectures for next-gen EVs—a partnership that seems to have lifted spirits at the company. “We believe this is a validation of our industry-leading technology,” Rivian said in its 2024 shareholder presentation.
This year could be another endurance test for Rivian, with potential policy and market turbulence ahead. But if the worst is behind it, the company finally looks like it knows exactly where it’s going. And don’t forget: it brings no baggage to the table.
60%: Smaller Chinese EV Brands Are Becoming Obsolete
Photo by: WM Motor
The future of EVs runs on one thing: trust. Trust that the car you buy today will still get software updates, that bugs will be fixed and that the connectivity features won’t wither away years down the line. For some Chinese EV owners, that trust has already been shattered.
A chilling Bloomberg report paints a stark picture: The future of Chinese EVs will be driven by bigger, more established brands with a solid financial foundation. The smaller players are on life-support, staring at a Fisker-like fate. The outlet even labeled models from these failing brands “zombie cars.”
Here’s more from that report:
Shanghai resident Mu, who asked to be identified by his last name due to privacy concerns, purchased his WM Motor EX5 EV in 2022. But since the company’s collapse in 2023, connectivity features have gradually vanished. Bluetooth keys no longer unlock doors, in-car entertainment systems are silent, maps don’t update and video streaming is unreliable.
“It’s incredibly boring now sitting in the car. No music, no video, no news, and even maps sometimes turns dark,” said Mu. “The car itself is fine as it’s quiet and efficient. But now it’s just a basic mode of transport.”
This proves that not all Chinese EVs are good. And the market is far from perfect. However, it’s not an unprecedented outcome. China has over 100 EV brands scrambling to grab a larger market share. Only a few are expected to survive this brutal competition. Some are expected to consolidate and others may serve as a cautionary tale of the risks involved.
90%: Japan Wants Tesla Investment In Nissan
Photo by: Tesla
Speaking of consolidation, the Honda-Nissan merger saga has taken a bizarre twist. An influential Japanese group is reportedly drawing plans for Tesla to invest in Nissan. If you just screamed what? in your head (or even out loud), you’re not alone there.
For starters, the Honda-Nissan merger is dead. Nissan is now looking for a new partner. It expected to be treated as an “equal,” and executives were outraged after Honda proposed to call the merger “Honda Corporation.”
Now, the Financial Times reported that the Japanese group wants Tesla to invest in Nissan. The group apparently includes former prime minister Yoshihide Suga and is being led by former Tesla board member Hiromichi Mizuno. The plan includes Tesla acquiring Nissan’s U.S. plants. Both the former minister’s office and Mizuno rejected these claims.
While Nissan’s shares surged nearly 10% after the report, this feels like yet another twist in Nissan’s ongoing rescue efforts that will likely fizzle out. Tesla’s priorities lie elsewhere. Its focus is on building robotaxis and humanoid robots, while CEO Elon Musk is already juggling his role as the head of multiple companies and the chair of the Department of Government Efficiency.
A Nissan investment? That’s a distraction Tesla doesn’t need, especially when the CEO is hyper-focused on efficiency and cost-cutting.
100%: Will Rivian Turn A Profit Next Year?
Photo by: InsideEVs
Rivian owners and shareholders have plenty to look forward to over the next few years. The new R2, the adorable R3 and R3X, and the company’s role in helping Volkswagen build cars with top-notch software. However, its $6.6 billion federal loan is now under the radar of the Trump administration and there are headwinds on the horizon regarding potential tariffs and consumer incentives. Can the automaker weather this storm?
Have a tip? Contact the author: suvrat.kothari@insideevs.com
