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Rivian Automotive (RIVN) reported record third-quarter deliveries on October 2, 2026, following the rollout of its cheaper R2 SUV. The stock still lost 17.7% from September 22 to October 21, while the S&P 500 was about flat. Selling more cars benefits shareholders only when those vehicles generate a profit, and the R2 is Rivian’s plan to get there. So how close is Rivian to making money on its cars?
Rivian Still Loses Money On The Cars It Builds
Rivian’s car business still loses money, but the loss is far smaller than it was a year ago. Rivian’s car business posted a gross loss of $36 million in the June quarter of 2026, down from a $335 million loss a year earlier. Starting R2 production added about $100 million to the quarter’s costs, management said, and it expects R2 to reach a positive gross profit as 2026 ends.
For now, the profit Rivian does make comes from outside its vehicle sales. The company’s software and services business earned a gross profit of $215 million in the June quarter, reflecting a 42% margin. Rivian’s joint venture with Volkswagen Group accounted for 60% of revenue in that segment. Buyers today are counting on R2 to make the car business profitable on its own.
What Are Rivian Buyers Paying For Today?
Because Rivian lacks a profit to value, buyers are paying for sales. The stock trades at 2.8 times its sales over the last four reported quarters, compared with 3.1 for the S&P 500. A price-to-earnings ratio is not meaningful because the company lost money. Rivian recorded an operating loss equal to 60.1% of its sales across those four quarters, while the S&P 500 earned an operating margin of 18.5%.
Those losses drain cash. Rivian’s free cash flow was negative $3.49 billion over the same four quarters, measured against the $5.31 billion of cash and short-term investments it held at the end of June. The company sold new shares in July to raise about $1.3 billion, leaving each existing share representing a smaller stake in Rivian.
In return, buyers get room to grow. Management expects 65,000 to 70,000 deliveries in 2026 and says plants in Normal, Illinois, and Georgia give the company a path to 515,000 units of annual capacity. Rivian will drive R2 to a gross profit by building it at much higher volumes, management says, spreading fixed costs across more cars.
Rivian Expects R2 To Cost More Before Paying Off
Management said on the July 30, 2026 call that the R2 launch would pressure the car business’s gross profit again in the third quarter before turning into a benefit in the fourth. The third quarter would be the first to absorb a full three months of R2 ramp costs, management said. As R2 production grows, it expects deliveries to be weighted toward the fourth quarter.
