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Edited Transcript of RIVN.OQ earnings conference call or presentation 16-Dec-21 9:30pm GMT

Q3 2021 Rivian Automotive Inc Earnings Presentation Dec 17, 2021 (Thomson StreetEvents) -- Edited Transcript of Rivian Automotive Inc earnings conference call or presentation Thursday, December 16, 2021 at 9:30:00pm GMT TEXT version of Transcript ================================================================================ Corporate Participants ================================================================================ * Derek Mulvey Rivian Automotive - Senior Manager, IR * RJ Scaringe Rivian Automotive - Founder, Chairman & CEO * Jiten Behl Rivian Automotive - Chief Growth Officer * Claire McDonough Rivian Automotive - CFO ================================================================================ Conference Call Participants ================================================================================ * Adam Jonas Morgan Stanley - Analyst * Robert Saltzman Wolfe Research - Analyst * Ryan Brinkman J.P. Morgan - Analyst * John Murphy Bank of America - Analyst * Brian Johnson Barclays - Analyst * Mark Delaney Goldman Sachs - Analyst * Emmanuel Rosner Deutsche Bank - Analyst * Alexander Potter Piper Sandler - Analyst * George Gianarikas Baird - Analyst ================================================================================ Presentation -------------------------------------------------------------------------------- Operator [1] -------------------------------------------------------------------------------- Thank you for standing by and welcome to the Rivian Third Quarter Fiscal 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question and answer session. (Operator Instructions). As a reminder, today's program maybe recorded. And now I would like to introduce your host for today's program, Derek Mulvey, Senior Manager of Investor Relations. Please go ahead -------------------------------------------------------------------------------- Derek Mulvey, Rivian Automotive - Senior Manager, IR [2] -------------------------------------------------------------------------------- Good afternoon and thank you for joining us Rivian Third Quarter 2021 Earnings Call. Joining us in today's call we have RJ Scaringe, our Founder, Chairman and Chief Executive Officer; Jiten Behl, our Chief Growth Officer and Claire McDonough, our Chief Financial Officer. The copy of today's shareholder letter is available on our Investor Relations' website. Before we begin, I would like to remind you during the course of this conference call our comments and responses to your questions about management's view as of today only and will include statements related to our business that are forward-looking statements under Federal Securities Law including without limitations statements regarding our market opportunity, industry trends, business operations, strategy and goals, our second domestic manufacturing facility and our expectations regarding date of deliveries. Actual results may differ materially from those contain in or implied by these forward looking statements due to risks and uncertainties associated with our business. Except as maybe required by law, Rivian does not have any obligation to update or revised such statement as circumstances change. For discussion of the material, risks and other important factors that could impact actual results, please refer to the cautionary statement and risk factors contain in our third quarter 10-Q filed with the SEC in today shareholder letter. Both of which can be found in our Investor Relations website at rivian.com/investors. During this call, we will discuss both GAAP and non-GAAP financial measures, a reconciliation of GAAP and non-GAAP financial measures is provided in today's shareholder letter. With that, I'll turn the call over to RJ, who will begin with the opening remarks. -------------------------------------------------------------------------------- RJ Scaringe, Rivian Automotive - Founder, Chairman & CEO [3] -------------------------------------------------------------------------------- Good morning, everyone and thank you for joining us this afternoon for our fist earnings call. As Derek mentioned, just before this call we published our shareholder letter which includes an overview of the progress we have made over the recent months and I encourage you all to read it for additional details around some of the items that we will cover on today's call. Before I dive into some of our recent milestones, I wanted to provide a quick overview of our business and mission for those who are new to Rivian. Our generation will have profound impact on the planet and the world, our kid's kid's kids will inherit. We can spend a lot of time on the specifics of climate change but the reality is we as society are rapidly changing the composition of atmosphere. If we want like as we know it to thrive for many generations for now, we must change. This is what inspired me to start Rivian and this is what drives the decisions we made as an organization including the decision to become a public company. The challenge of shifting on fossil fuels is as big as it comes and it's going to require people, companies and the entire industries to come together in ways we never had before. From day one, our focus has always been to maximize impact, to keep the world adventurous forever. The world forever is a humbling world. It's very easy for us to think about the world in a context of our lives. So, when you think about the world in the context of the many generations to come, it requires to not simply inspire people to buy our vehicles, we must inspire shift and behavior in a new relationship with world around us. The transportation industry is at the very start of a transformation, bigger in scale than the shift from the (inaudible) of the automobile. The business model, value chain, customer model and technology will be completely remapped as we redefined how we move people and goods on our planet. Rivian exists to create products and services that help our planet transition to carbon neutral energy in transportation. Our business encompasses both the consumer and commercial markets. In the consumer space, we launched our R1 platform with our first vehicle, the R1T and R1S, our handshake with the world and our first step in building relationship with our customers. Engineered for all of life's adventures, our vehicles uniquely combined performance, capability, utility and efficiency. As of yesterday, we had 71,000 pre-orders for our R1 vehicles. In the commercial market, we are bringing to market the Rivian Commercial Van platform. Our first vehicle on this platform will be our 700 cubic foot electric delivery van or EDV 700. We designed these vehicles working closely with Amazon who has placed an initial order of 100,000 EDVs. Our commercial vehicles are designed with a focus on safety, comfort and ease of operation. They offer a step change in driver experience while also delivering a lower total cost of ownership. Every commercial vehicle sold to Amazon is complemented by FleetOS, our proprietary end-to-end centralized fleet management platform with a recurring monthly subscription fee. The 700-cubic foot EDV has achieved a range of 201 miles based on internal testing using official EPA test procedures. We have successfully received our certifications to sell these vehicles and we're trying to deliver our first saleable vehicles to Amazon this month. Both our consumer and commercial products are supported by a full suite of value added services that address the entire vehicle life cycle and deepen our customer relationships. Starting with the clean sheet, we built a vertically integrated ecosystem comprised of our vehicle technology platform, cloud architecture, product development and operational capabilities, products and services. Our ecosystem is designed to deliver rapid development cycles, structural cost advantages and exceptional customer experiences. After a 12-year journey of [building] our strategy and offering, is ready for customer deliveries. It has been incredibly rewarding to see the excitement and enthusiasm for what we're building. Over the past few weeks, we received many recognitions and acknowledgments from editorial and news outlets including Newsweek, Forbes, Electrek and Edmunds. And add to this list earlier this week, the R1T was selected as Motor Trend's 2022 Truck of the Year after an exhaustive testing program. This award recognizes the truck that pushes boundaries across all aspects including safety and efficiency, value, advancement of design, engineering excellence and performance. We're honored by this recognition and the opportunity to illustrate how a clean sheet technology-focused vehicle could eliminate long compromise. After years of meticulous attention to detail, it is rewarding to hear Motor Trend states that this may have been the most significant recognition that they have given since the start of the award in 1949. Additionally earlier this year, we completed a world first, a historic all electric crossing of the U.S. in R1T on a Trans-America trail. From a production perspective, I wanted to highlight a significant milestone for our team, the production and delivery of our first vehicles. As the first saleable R1T drove off to production line in September, I was joined by my family and thousands of colleagues to celebrate this exciting and emotional moment for our organization. And earlier this week, Claire and I purchased the first two saleable R1S vehicles where a steep part of our climb but I couldn't be more grateful to be alongside such a dedicated and passionate team who poured their energy and soul into bringing these vehicles to life. I'll stop on this point for a second and speak to our manufacturing progress. Launching and ramping production of three different vehicles within a few months is an incredible tough challenge. This production ramp requires the simultaneous ramp of our supply chain, hiring and training of our product workforce, equipment bring-up and rapid iterations through production quality loops. These challenges have been exacerbated, given the state of our global supply chain, tight labor market and of course the complications from COVID. As of yesterday, we have produced 652 R1 vehicles and delivered 386 of these including the production sale of our first two recently certified R1S vehicles earlier this week. With 13 working days left at our Normal facility, our dedicated teams are working as hard as possible to get as many customers or vehicles by year end. For 2021, we expect to produce a few hundred vehicle short of our initial 1,200-vehicle production target. Following the start of production for the R1T, we made the decision to begin introducing the R1S and TR1 production line ultimately ramping up the R1S in November while also ramping production of the R1T was more challenging than expected. We produced enough R1S' to support validation and certification which are critical for our R1S production ramp in early 2022. Given the importance of R1S, these are just -- this was the strategic approach that we felt optimized long term value for the business. We are encouraged by the progress and learnings our team continues to incorporate into our operations and we have achieved our primary objective of certifying the R1T, R1S in EDV 700 for sale this year. In early 2022, we plan to complete certification of the EDV 500 which is both narrower and shorter than the 700. Our production ramp of the R1T, R1S, EDV 700 and EDV 500 will continue into next year and we remained confident in our long-term manufacturing trajectory. Just as we're scaling our manufacturing facility, hundreds of our suppliers are also scaling their production to match our vehicle ramp rate. Our procurement team has remained nimble and continues to work with our supplier partners across all tiers to mitigate issues stemming from our supply chain delay of market delay to market and the COVID pandemic. Given the uncertainty within the supply chain, we decide to carry higher inventory levels than presumably assumed to help ensure we consistently have parts to build. The good news is we do not believe any of our supply chain challenges represent long-term systemic issues. While our product development and manufacturing teams had been focused on ramping our Normal production facility, our real estate and facilities team had been working diligently to ensure we remained well-positioned to capture and drive the accelerated large scale adoption of sustainable transportation. We are excited to announce today our partnership with the state of Georgia which will be the home of our second U.S. manufacturing facility. The site selection was the culmination of a comprehensive process in which the Rivian team evaluated a variety of sites across the country, looking for the right combination of site location and logistics, access to talent and proximity to suppliers. This project represents the largest economic development deal in Georgia's history. The facility will be east of Atlanta in Morgan and Walton counties and will employ more than 7,500 employees at peak production. From a construction perspective, we plan to break ground this coming summer with the intention of having facility start producing saleable vehicles by 2024. The facility will produce our next-generation of Rivian vehicles with an eventual target capacity of 400,000 annual units. I want to thank the entire state of Georgia. We're excited to make Georgia another home for us. The last major milestone I wanted to highlight was the completion of our initial public offering in November in which we raised $13.7 billion of first proceeds. We are extremely appreciative of the excitement and receptivity that our existing and new shareholders have shown. These funds enable us to execute on our near term objectives including the growth of our manufacturing capabilities, further investment into our vertically integrated technologies and continued infrastructure and capabilities to support customer experience and engagement. As part of our IPO, we established Forever by Rivian to extend the -- our impact beyond the (inaudible) [make] and the associated competition they hope to inspire. Forever's mission is dedicated to addressing our planet's climate crisis and preserving the critical biodiversity needed for our planet's long-term survival. With this, we donated 1% of Rivian's pre-IPO outstanding equity to Forever, making the natural world a stakeholder in our success. Forever will be focused on land conservation, sustainable consumption initiatives, preserving biodiversity and research and educational stewardship. The value of Forever's equity is nearly 1 billion today and I'm excited by the impact this donation can have in preserving the planet for future generations. Now, I will hand it over to Jiten who will touch on the customer engagement side of the business. -------------------------------------------------------------------------------- Jiten Behl, Rivian Automotive - Chief Growth Officer [4] -------------------------------------------------------------------------------- Thanks RJ. We [continue] to observe strong affinity for our brand as evidence by the [inaudible] we have seen in our backlog of pre-orders. At Rivian, our pre-order reflects a refundable $1,000 deposit in a [consumer] vehicle including everything from paint and interior color for accessibility. As of end of our third quarter, we had approximately 48,000 R1 pre-orders from customers across the United States and Canada. Since then, we have added another 20,000 next pre-orders, [taking] our backlog as of yesterday was 71,000. Before I jump into a few additional customer experience milestones, I wanted to spend a few minutes walking to our go-to market strategy. The regular go-to market strategy is rooted in three foundational principles, all designed to efficiently solve existing customer pain points. First, we go direct to the customer. By doing that, we are able to ensure that quality of each interaction. Second, we are digital force which means we have invested heavily in the robust cloud-based digital backbone that enables and enhances each interaction. We expect this will provide deep learning, (inaudible) experiences and scalability as we grow. As an example, our [intuitive] digital process started [briefly] as these were otherwise required several (inaudible) leadership with the [third] case (inaudible) experience we can manage in minutes from your couch. And third, we maintained end to end control of the entire customer journey. This means every interaction is stitched together into one seamless experience to a set of vertically integrated digital and physical capability. These key foundations (inaudible) allowed us to put the customer at the center of each touch point. Over the past few months, years of hard work, concepts and design have been put into action. You will find further details in our shareholder letter but I will touch on a few. In September, we kicked off our First Mile program. This program provides a variety of ways for consumers to experience the Rivian [makers] including at-home [demo] drive and [event-based] experiences and drives. This launch, we have hosted over 10,000 guests in our vehicles and have held drive in handful of locations including New York, Normal, Seattle and California. Additionally, as we started (inaudible) in September, our delivery team began to ramp up. As one of many interactions we have with our customers, they put a tremendous amount of heart into our delivery experience. Deliveries happened primarily at our customers' homes, so that they can experience the moment comfortably with family, friends and their whole community if they so choose. Procuring these deliveries, our dedicated field specialists are there to walk the customers to everything they need to know about their vehicles and tailored the delivery experience to the consumer and their family. As we move into October, we opened our first Rivian hub in Venice, California. If you're unfamiliar with the Rivian spaces, there are places for our customers, fans and the local community to come together, connect and share ideas. Our biggest portfolio will consist of hub like a location in Venice, (inaudible) spaces which will be temporary in targeted locations, outpost and more adventurous location and lastly last track of protective land that are accessible to customers. On the service side, we are prioritizing the role out of our service centers, targeting the highest computations of pre-order customers. The service centers are complemented by a fleet of mobile service vans [literally] performed the vast majority of service staff at our customer's home while expanding the service coverage area. Our delivery cadence is synchronized with the service infrastructure to ensure a worry-free and highly responsive support experience. Our 24/7 service support and predictive diagnostic capability would further enhance the service (inaudible). Next, let me pass the call along to Claire who would provide an update on our financials. -------------------------------------------------------------------------------- Claire McDonough, Rivian Automotive - CFO [5] -------------------------------------------------------------------------------- Thanks Jiten. I wanted to echo RJ and Jiten's excitement in talking to all on our first earnings call as a public company. I'll start with the review of our third quarter results. In September, we delivered our first 11 R1Ts to customers, generating $1 million in revenue. As RJ mentioned, given that we just started production in September, the third quarter volumes on our manufacturing lines are a small fraction of our expected long-term production capacity. In the near term, we expect that this dynamic of high fixed cost associated with operating and running our large scale, highly vertically integrated plan amortized over a small but growing number of vehicles produced across the R1 and RCV platform will continue to have a negative drag on gross profit. As a result, in the third quarter we generated a negative gross profit of $82 million. Additionally, we recorded a lower cost for net realizable value, LCNRV adjustment to write-down the value of certain inventory, the amount we anticipate receiving upon vehicle sale after considering future costs necessary to ready the vehicle for sale. This expense negatively impacts gross profit in the third quarter and we expect it to also impact upcoming quarters in the near future. For example, in the fourth quarter we continue to build up work inventory balance to help mitigate the supply chain challenges we've experienced to date. We immediately record the LCNRV adjustment which adds to the concentration of fixed cost we recognized as part of our cost of goods sold. As a result of these accounting dynamics, the marginal vehicle we produced in Q4 will have a limited impact on our cost of goods sold. And given the inflationary market backdrop, we also continue to evaluation the pricing for our vehicle. Turning to our operating expenses, research and development expense for the quarter was 441 million as compared to 220 million in the third quarter of 2020. The higher expense was due to increased efforts related to our R1 consumer vehicle program as well as our EDV, commercial van program. We also experienced increased expenses related to other advanced product development activities that are critical for our future products. SG&A expense for the third quarter of 2021 was $253 million as compared to $68 million for the third quarter of 2020. The primary drivers of this increase are related to scaling our sales and service operations, commercial office location, customer-facing facility and corporate functions to support future business growth. During the third quarter, we recognized the $458 million non-operating expense related to the loss on our convertible note. This was the result of the issuance and subsequent mark to market valuation of our 2021 convertible note. This was a noncash expense. Our capital expenditures for the third quarter were 469 million, driven by our continued strategic investments in infrastructure was primarily due to the expansion of our Normal factory as well as investments in corporate facilities, service operations and experience spaces. Now turning to our cash balance, we ended September with $5.2 billion of cash on our balance sheet. Since then, we completed our IPO, raising $13.5 billion of net proceeds and also raised $1.2 billion of net funds through senior secured notes. Adjusting our cash balance for these two fundraising event, we would have ended the third quarter with approximately $20 billion of cash on the balance sheet. As RJ highlighted, there's a tremendous opportunity in front of us to help drive the future of the $9 trillion transportation and services markets. However, building out our organization and infrastructure to support our growth requires significant investment. The funds we raised throughout 2021 offers us the opportunity to execute on our near term objective. However, we will continue to look for opportunities to pull toward the investments to further accelerate our strategy. As we look a few weeks ahead, we remained focus on ramping our R1 production and deliveries. In addition with the finalization of our EDV certification, we expect to start making deliveries of the EDV 700 to Amazon before the year end. We plan to provide full-year 2022 guidance during our Fourth Quarter and Fiscal Year 2021 Earnings Call. With that, let me turn the call back to RJ before opening up the line for Q&A. -------------------------------------------------------------------------------- RJ Scaringe, Rivian Automotive - Founder, Chairman & CEO [6] -------------------------------------------------------------------------------- Thanks Claire. As I mentioned, delivering our first R1T, R1S, EDV -- EDV vehicles is our primary goal for 2021. I appreciate our team for their focus and dedication to make this goal a reality despite the unprecedented backdrop of COVID in a challenging supply chain environment. With the growing backlog of 71,000 pre-orders and our 100,000-unit order from Amazon, we are excited to begin to satisfy the tremendous demand for our products and services. Our team has rallied around our shared values and continue to demonstrate a tireless work ethic as we continue scaling our production volumes. Thanks again to everyone for being with us today and with that, let me turn it over to the operator for questions. ================================================================================ Questions and Answers -------------------------------------------------------------------------------- Operator [1] -------------------------------------------------------------------------------- (Operator Instructions). Our first question comes from the line of Adam Jonas from Morgan Stanley. Your question please? -------------------------------------------------------------------------------- Adam Jonas, Morgan Stanley - Analyst [2] -------------------------------------------------------------------------------- Thanks. Good afternoon everybody. One question I want to follow up, please, on the capacity expansion. I thought the idea was to ramp up Normal first, see everything that works and what doesn't work and then use those learnings to optimize the selection and the architecture of your second plant. So, kind of why expand so soon and how can you still get those learnings done? -------------------------------------------------------------------------------- RJ Scaringe, Rivian Automotive - Founder, Chairman & CEO [3] -------------------------------------------------------------------------------- Thanks Adam. Yes, this is -- these are really key element of how we thought about cascading the programs and how we've architected the product development organization to be capable of not only running more than one program and launching more than one program at once but also to have those fast feedback loops between the different programs. So with that, the commercial van has actually learned a lot from the R1 platform in the R1 platform launch. And as we look at our next-generation vehicles, we'll certainly learn from what we're doing now on the R1 platform and what we're doing on the RCV platform and recognizing that those programs are fully developed and then launched. Want you see in terms of the second facility, the facility in Georgia, this is really -- this is key for us for expansion point of view and the time scales associated with bringing that plant online fully require us to just start that work as you heard early next year. -------------------------------------------------------------------------------- Adam Jonas, Morgan Stanley - Analyst [4] -------------------------------------------------------------------------------- Thanks RJ. And just as a follow-up, I would love any feedback on the early build that you've been delivering. What's going right, where there's -- where those issues and how you're addressing them? And in your last -- in S1, I think early in 20, sorry early in November, there was a comment that you expected the orders at the time which were 55,400 to have them delivered to consumers, these are the R1, I'm referring to, by the end of fiscal '23. I'm just curious if you can reiterate that today based on everything that you're seeing through your lens on the supply chain? Thanks RJ. -------------------------------------------------------------------------------- RJ Scaringe, Rivian Automotive - Founder, Chairman & CEO [5] -------------------------------------------------------------------------------- Sure. I guess first just to touch on the -- how we're seeing the vehicles in terms of quality must be delivered, there's a tremendous amount of excitement. What we're finding is early customers are excited to invite friends and family to take rides and we think that's part of what's driving the increased rate of (inaudible). And from a quality of point view, this has been a really key element for us where we're focused on making sure what we're delivering maintains and really delivers on quality in terms of how the vehicles are built, how they're put together. And what's exciting is watching us add additional features. So through software with their updates, we're able to not only enhance and improve the software capabilities in the vehicle but to add features and to response to some of their early feedback that we're getting. And then with regards to -- go ahead, go ahead, I'm sorry I'm -- -------------------------------------------------------------------------------- Adam Jonas, Morgan Stanley - Analyst [6] -------------------------------------------------------------------------------- No -- yes, yes, the second part of the question on reiterating the delivery target by end of 2023. -------------------------------------------------------------------------------- RJ Scaringe, Rivian Automotive - Founder, Chairman & CEO [7] -------------------------------------------------------------------------------- Yes, so we were working as hard as we can to ramp, recognizing the rate at which pre-orders are coming in exceeds the current rate of production. We have absolutely need to work to sort of have supply, so to speak, catch up with demand. So, we do plan to have the existing pre-orders make those deliveries by 2023 but it will -- if you place a pre-order today and if you're delivered in that order, it wouldn't be until 2023 for that delivery. -------------------------------------------------------------------------------- Adam Jonas, Morgan Stanley - Analyst [8] -------------------------------------------------------------------------------- Thanks RJ. -------------------------------------------------------------------------------- Operator [9] -------------------------------------------------------------------------------- Thank you. Our next question comes from the line of Rob Saltzman, Wolfe Research. Your question, please? -------------------------------------------------------------------------------- Robert Saltzman, Wolfe Research - Analyst [10] -------------------------------------------------------------------------------- Hi everybody. Congrats on what you accomplished and the response to the first product. I was -- wanted to ask you a little bit more about production first of all, obviously a lot is coming together. Where are the biggest bottleneck at this point in the ramp? Where are you focusing operationally? Can you give us some sense of where your daily production rate is now and what you expect to exit the year out? -------------------------------------------------------------------------------- RJ Scaringe, Rivian Automotive - Founder, Chairman & CEO [11] -------------------------------------------------------------------------------- Ramping something like this is really -- it's almost like an orchestra. We have -- we have to simultaneously be ramping the supply chain, simultaneously train the workforce, simultaneously working through any equipment issues and equipment bring-up, and then of course working through quality loops as we said -- as I said to Adam, just given the importance of making sure what we're delivering to customers is truly achieving the quality levels that we're committed to. So as we look at that, each of those represents its own set of challenges and really the -- what makes this situation and this timeframe such unique time to launch is just the supply chain constraints and supply chain challenges. And what makes it challenging in the case of a vehicle is even -- even if you have 99.9% of the components in the vehicle ramping, so that roughly 2,000 parts that come in and go into a vehicle, if 99.9% of those have ramped at the same rate as the rest of the production, the small number of suppliers or small number of components maybe ramping a little slower, puts great constraints of bottlenecks. And so we had to respond to that. We've been very focused on making sure we not only are effectively ramping what's in our plant but also effectively ramping across all over our suppliers. With that said, those challenges had been -- they really are a focal point for us over the last two and a half, three months. And as you heard, we don't see any long-term systemic challenges associated with ramping the supply chain. A number of these issues are short-term in nature and they're solvable problems. As we look inside our facility (technical difficulty) things that we directly control in terms of ramping our equipment and working for those quality loops, one of the -- one of the areas that's been a constraint for us thus far has been building our battery modules. And in the case of the vehicles we are producing today, each battery pack has nine battery modules and each battery module has 864, 2170 cylindrical cells. And the process on -- of assembling the modules and those modules into packs, it takes quite a bit of -- quite a bit of assembly work and it's a highly automated process. And what we've done to ensure this isn't a long-term risk is we actually have three separate lines that had been brought up. So, what we call essential like a development line that's been running for a number of years now, we then have a larger scale line of fully automated line that's producing a vast majority of what we -- what put into the road thus far. And then we have what we called line two with the line -- line zero, line one and line two which is coming up as we speak and that this last line is significantly higher volume and we fortunately took the decision early last year to commission this line, recognizing we didn't want to have battery module as a long-term constraint. And we see this while this has been a constraint to this point, we do not see this as a long-term constraint, given that we've added so much capacity over the last -- over the last couple of months. -------------------------------------------------------------------------------- Robert Saltzman, Wolfe Research - Analyst [12] -------------------------------------------------------------------------------- Thanks for that. And just also related to production, as your backlog grows, you're going to get to a point where people won't get deliver until 2024, it's a great problem to have. Claire mentioned that you're looking at opportunities to accelerate your strategy. Are there things that you can do to maybe accelerate the ramp that you originally envisioned for the TR1 platform, just given the response to the product or are you I think Claire alluded to, inflation and looking at pricing, are you looking at opportunities to adjust pricing just based on what the demand is for the product? -------------------------------------------------------------------------------- RJ Scaringe, Rivian Automotive - Founder, Chairman & CEO [13] -------------------------------------------------------------------------------- With regards to production, we're certainly looking at how we can accelerate the ramp, given the really strong demand that we have for the products. One of the things that we built into -- the way we design not only the plant but also the organization is we made sure that as we -- as we set things up, we're capable of exercising the discipline to ramp two lines in parallel. So, we have our R1 line and we also have our commercial vehicle line. And not only there are separate assembly lines but those are also separate teams that are working on those activity. And what that allows us to do is to be really intentional around how we deploy resources and that ability to be very intentional also allows us to look at increases in capacity that the plant has been for the plant here in Normal to grow capacity from 150,000 units between those two lines to 200,000 units. And it's part of the long-term plan for the plant in -- we're looking at how we can accelerate that capacity increase, leveraging the discipline teams that we built. Now with regards to pricing, it's certainly the backdrop of inflation that we're seeing and the very strong demand for products not just looking our product (inaudible) broadly within the electrified space has caused us to look at our pricing and really I'd say recognizing the set of product features that we've been able to put together into the vehicles. And the vehicles are incredibly -- you had a chance to drive them, they're incredibly fun to drive, very capable, over 800-horsepower, 0 to 60, three seconds, great on-road, great off-road but also a great everyday vehicle. So in terms of the competitive step, we recognized they're very aggressively priced. That is something that we certainly considered and talk about quite a bit as a management team. -------------------------------------------------------------------------------- Robert Saltzman, Wolfe Research - Analyst [14] -------------------------------------------------------------------------------- Great. Thank you. -------------------------------------------------------------------------------- Operator [15] -------------------------------------------------------------------------------- Thank you. Our next question comes from the line of Ryan Brinkman from J.P. Morgan. Your question, please? -------------------------------------------------------------------------------- Ryan Brinkman, J.P. Morgan - Analyst [16] -------------------------------------------------------------------------------- Hi, thanks for taking my question. I wanted to ask about the pace of the orders you've been receiving. I think that did maybe increase in the lead up to the IPO, given the increased attention of product that was getting there for the first media review, so the R1T, et cetera, also maybe just because of the increased attention the company was getting around the IPO. So, it would be great to get an update what the pace of weekly orders has been looking like, if that took another big leg up after the IPO with the company's name and the news, maybe some of the market events you've done in California or elsewhere. Also, it would be interested if there's been any maybe increased inbound interest in the RCV platform from potential non-Amazon fleet customers. Thank you. -------------------------------------------------------------------------------- Jiten Behl, Rivian Automotive - Chief Growth Officer [17] -------------------------------------------------------------------------------- Ryan, you left I mean -- I think you said it well, over the last few week we definitely had an increased attention coming through all the coverage in the media. Equally importantly would be launch of our post-mile program and getting the vehicles to the customer, having them experience those vehicles. Our first deliveries to -- which started out predominantly to our employees but then now happen to non-employees and end customers, they all resulted in definitely an increase in interest, demand. And what they're seeing in terms of the heat map of our demand is that it's getting more and more intense. We are seeing the demand grow in all the big market that we were always present. The intensity of demand is growing both in the major markets and then also in the greater metropolitan areas around those major markets. So, we are I would say more than anticipated definitely but the demand needs to be robust. On the RCV platform, we have -- as you know we have an exclusivity arrangement with Amazon in the last mile space. And Amazon being the biggest player in the last mile delivery space and having them as an anchor customer while the strategic decision that we made allows us to learn fast, allows us to scale and how to deploy a large mega fleet. But outside the last mile delivery space, there is a huge market out there and we are seeing a lot of interest, inbound interest. We are actively engage the players in this space, looking at different formats or compilation that could serve the specific use cases. So, we are actually quite excited about the size of this opportunity outside the last mile [ability] space. And what is even more interesting is the FleetOS, this was fleet management platform that we are launching with first takers that will be delivered with Amazon and it's going to be present with every vehicle that we sell as a monthly recurring fee. It also applies to other use cases and the scalability of this fleet management platform, the flexibility, the modularity of this provides us a lot of opportunities to grow the services side of the business on the commercial side. So, that's another [unlocked] of value, long-term value that we've launched. -------------------------------------------------------------------------------- Ryan Brinkman, J.P. Morgan - Analyst [18] -------------------------------------------------------------------------------- OK, that's very encouraging. Thank you. And just lastly on me is a question on I guess battery sourcing, strategy. How would you describe the relationship with Samsung? At what point does it make sense to have it maybe more custom-designed battery pack or maybe to in-source or partner with the battery company to vertically integrate manufacturing of the pack? Is there a, I don't know, unit volume threshold or maybe a date in mind by which you would like to bring batteries in-house? How are you thinking about that? -------------------------------------------------------------------------------- RJ Scaringe, Rivian Automotive - Founder, Chairman & CEO [19] -------------------------------------------------------------------------------- You know, Ryan, this is a great question. In fact, I think it's probably one of the most important questions in the context of electrification. And really it stems from the sheer scale of increase that we're going to need to see as an industry to produce all the batteries necessary to electrify 90 to 100 million vehicles a year and eventually in the aggregate around one and a half million cars in the planet. So, we thought about this, we developed the strategy that really has three, what I would call, parallel approaches and truly parallel, meaning these are not mutually exclusive. And in the first category or first element (inaudible) is sourcing and existing cell. And that's what we've done with Samsung SDI for our launched vehicles and it's a cylindrical 2170 cell, nickel content cell and we sourced that from existing capacity, capacity that already existed in the world. That type of deal we see is really being -- we don't see a lot more deals like that happening across the industry. Essentially if the demand for cells starts to climb, we need to be building new capacity and what we see is the second category or second approach again happening in parallel is the need to create capacity or co-investment capacity with cell suppliers, and we're certainly doing that. We haven't announced any of those relationships yet but for us to continue to scaling out year 2023 and beyond, that co-investment in capacity is going to be critical for us. And then really the last parallel path, last arm of the strategy for us is taking an even more vertically integrated approach where we simply control the design of the cell and the sourcing of the raw materials that go into the cell. And that third approach is core to our strategy. We've been working on that for quite some time and in fact we'll be producing cells in pilot form starting late next year. And that vertical integration of the cell doesn't mean the first two categories don't remain super important, it just simply is in response to our intended growth. And when one looks at the amount of cells we'll need as a company, all three of those approaches, meaning source capacity that was already existing in the world, newly created capacity that we co-invest in with our supplier partners and newly created capacity that we entirely invest in and control, all three of those pathways are going to be critical for us as we start to look at in the second -- into the second half of the 2020s and scaling as a business. -------------------------------------------------------------------------------- Ryan Brinkman, J.P. Morgan - Analyst [20] -------------------------------------------------------------------------------- Very helpful. Thank you. -------------------------------------------------------------------------------- Operator [21] -------------------------------------------------------------------------------- Thank you. Our next question comes from the line of John Murphy from Bank of America. Your question, please? -------------------------------------------------------------------------------- John Murphy, Bank of America - Analyst [22] -------------------------------------------------------------------------------- Hey everybody. Just the -- a first question on the ramp of the pre-orders, there certainly a bit faster than maybe we were expecting and we thought you have to have a -- more of these trucks out on the road had really build this momentum but it's coming fast and (inaudible). So, I'm just curious relative to your expectations how the pre-orders are rolling in and if you have any early read sort on the demographics and the vehicles that are certainly not being treated indirectly here but where are these buyers are coming from? Any sort of specifics around these folks because it's a lot and it's pretty quick. -------------------------------------------------------------------------------- RJ Scaringe, Rivian Automotive - Founder, Chairman & CEO [23] -------------------------------------------------------------------------------- Yes, it's certainly exciting. The response to the vehicles has been outstanding and we're seeing a lot of over the last -- really the last couple of months is heightened awareness for the company. Certainly, the IPO contribute to that but a lot of it has also been in just the broad coverage that we've seen from a variety of different outlets and media sources. As I mentioned earlier, Motor Trend selection of us is their 2022 Truck of the Year and their comments and sort of excitement around the vehicle is emblematic of what we've seen from a number of different publications coupling that with just more awareness to the vehicle. So, some of our drive events that we've one and then the early deliveries we're doing, we often joked every early customer turns into a sales representative for the company because there is just so much excitement for the vehicle and so much excitement for the product. With that said, we do expect that to continue. We expect as awareness continues to go up, that will lead to continued increase in greater demand. And to some of the earlier questions, it certainly has us focus on how do we make sure we continue to ramp production and as we talked about look for opportunities to pull ahead on our volume ramp. -------------------------------------------------------------------------------- John Murphy, Bank of America - Analyst [24] -------------------------------------------------------------------------------- And so RJ, any early read on who these folks are, are they (inaudible) stepping up into trucks or the truck buyers that are staying in trucks, I mean what's the -- what's the early read on sort of the folks that are -- they are placing these pre-orders? -------------------------------------------------------------------------------- Jiten Behl, Rivian Automotive - Chief Growth Officer [25] -------------------------------------------------------------------------------- Yes, absolutely. I think this has been one of the -- it sort of validated the strategy and the hypothesis that we had in terms of positioning of the R1. You know, we had always intended this vehicle to be in this white space and by definition the white space should be attracting share from a lot of the adjacent markets and segment. And you're absolutely, right, this -- what we are finding is a true validation of that hypothesis where a vast majority of our customers are coming from one, never having one electric vehicle. Two, for the R1T, we have close to 90% of customers that have never own a truck and this -- that has been one of the factors where this vehicle is attracting so many shoppers and so much of cross-buying activity that is resulting in testing the product with this. And I will add this is a lot due to the -- due to the coverage and the experience [had] our customer are having with the R1T. We are expecting this to actually only get even bigger once the R1S hits the market. People are able to experience that up close and personal, are able to drive in it. So, we are definitely -- it is more than we anticipated, absolutely, very encouraging. And as RJ mentioned, it has also opens up opportunities on what they could do from the quality of owning from a pricing of view. So, we're looking at all these options right now. -------------------------------------------------------------------------------- John Murphy, Bank of America - Analyst [26] -------------------------------------------------------------------------------- It's something you got really high-class problem on your hands. Just lastly on the Georgia facility, 7,500 jobs, I used a multiplier on that. You (inaudible) argue for Georgia this is going to be a 50,000 or 100,000 net incremental jobs all-in when you go through the value chain. I'm just curious as you worked out this deal with Georgia, what the terms are and Claire, I mean if you were thinking about this on a gross CapEx versus net CapEx, I mean how big a benefit is it going to be to have worked with Georgia versus what would you spend otherwise? -------------------------------------------------------------------------------- Claire McDonough, Rivian Automotive - CFO [27] -------------------------------------------------------------------------------- Sure. So relative to our original plan record as we thought about the overall class for a second facility, I would say that this is certainly an advantage position to what we had originally anticipated in terms of gross CapEx metrics that we would put out there in the market. And so we work really closely with the state of Georgia across the incentive package here. It's a very attractive one for Rivian and we're really excited about not just the incentive package but as you mentioned the true talent pool that exists within that market that we will -- we think will be really optimal as we want to scale production and build out a significant second facility ion the U.S. market. -------------------------------------------------------------------------------- John Murphy, Bank of America - Analyst [28] -------------------------------------------------------------------------------- And could you quantify that all, I mean it's just -- I mean it's a good -- really good thing for Georgia, I mean they should be pitching in. I'm just curious what -- maybe relative to your base case expectations versus what you're able to work out here, if you can give us an idea of what you got on the capital side or [NPV]? -------------------------------------------------------------------------------- Claire McDonough, Rivian Automotive - CFO [29] -------------------------------------------------------------------------------- I would say we'll have more to come on that in future announcements but right now we'll just say that it certainly a great deal for Rivian and a great deal for Georgia as well. -------------------------------------------------------------------------------- John Murphy, Bank of America - Analyst [30] -------------------------------------------------------------------------------- OK, great. Thank you very much. -------------------------------------------------------------------------------- Operator [31] -------------------------------------------------------------------------------- Thank you. Our next question comes from the line of Brian Johnson for Barclays. Your question, please? -------------------------------------------------------------------------------- Brian Johnson, Barclays - Analyst [32] -------------------------------------------------------------------------------- Yes, thank you. I just want to drill a little bit more down on the production ramp. You know, if you kind of think through you mentioned the word constraints which of course brings to mind the classic theory of constraints. Could you maybe describe in a little bit more detail where you think the key constraint is now? You did mention perhaps the welding of the battery packs and how do investors get confident that -- the constraint can be knocked off versus their worst case something, fundamental about the design of the vehicle or the battery packs that would complicate any ramp. -------------------------------------------------------------------------------- RJ Scaringe, Rivian Automotive - Founder, Chairman & CEO [33] -------------------------------------------------------------------------------- In the ramping up of production system like this, it's -- is as I said before a really complex orchestra. So, you have hundreds of suppliers providing thousands of parts, thousands of robots put in the production facility operating to prescribed movements and then thousands of team members assembling and working to put the vehicles together. So as we go through that, process we have multiple meetings throughout everyday, tracking how we're managing all those different constraint and as the lines -- each aspect to the plant whether it's stamping or body shop or paint shop or battery assembly or driving assembly or general assembly of the full vehicle, whether there's any constraints within those and how we continue to progress the hourly and daily output. And with that said, we're ramping largely as expected. The battery constraint is really an artifact of just bringing up a highly automated line. And as I said, that doesn't represent any long-term challenges for us. We have a second line that's coming on that will put the battery module production way out in front in terms of capacity of the other areas of the plant. So as we work through these quality loops and as we work through training our workforce, this is -- this is part of the challenge and it -- I'd say we just need to recognize that the plant is designed to run at significantly higher output. And what we're seeing today in terms of output just represents the front-end of an S-curve which is typical for this type of a ramp-up. -------------------------------------------------------------------------------- Brian Johnson, Barclays - Analyst [34] -------------------------------------------------------------------------------- And just to follow up, anything in terms of having to go back to the drawing board and either the configuration of the pack, particular parts or things that would be longer cycle fixes as opposed to just ironing out the kinks and attacking bottlenecks on a daily basis that come up? -------------------------------------------------------------------------------- RJ Scaringe, Rivian Automotive - Founder, Chairman & CEO [35] -------------------------------------------------------------------------------- No, we don't see any long-term systemic challenges with either the supply chain or with the way that the vehicle has been designed or the manufacturing plants has been designed. -------------------------------------------------------------------------------- Brian Johnson, Barclays - Analyst [36] -------------------------------------------------------------------------------- OK, thanks. -------------------------------------------------------------------------------- Operator [37] -------------------------------------------------------------------------------- Thank you. Our next question comes from the line of Mark Delaney from Goldman Sachs. Your question, please? -------------------------------------------------------------------------------- Mark Delaney, Goldman Sachs - Analyst [38] -------------------------------------------------------------------------------- Yes, good afternoon and thank you very much for taking the questions. So, I'm hoping to start on the commercial side of the business, the 201 miles of estimated range that you're seeing. It's very attractive, I think it would cover a number of route and so I'm hoping to better understand what it may take to build upon that initial 100,000 order from Amazon. Is it executing that -- some of the technical milestones as you seem to be doing or it would be more around having to hit a certain percentage of that order in terms of delivering vehicles before the maybe upside to that initial 100,000? -------------------------------------------------------------------------------- RJ Scaringe, Rivian Automotive - Founder, Chairman & CEO [39] -------------------------------------------------------------------------------- Yes, Mark, it's a good question. We -- as we think about the commercial space and Jiten spoke to this earlier, Amazon represents such a -- such a large customer for -- or such a large pool demand for us. And as a result, we're very focus on making sure that we deliver to their needs and they're not only the largest player within the -- within the last mile space but they're also the most rapidly electrifying. So, it's really critical that we do not [startle] them with vehicles. Now saying that, the vehicle platform, the RCV platform was architect and designed, fully contemplating the vehicles beyond last mile that's in the cargo space, that's in the work space. So, there's a whole host of opportunities that exists both in large volumes but also across a very long spread out tale of commercial applications. And so, for us to bring up those non-EDV versions to the vehicle is something that we are focused on and the design team and engineering teams are working towards that but we're balancing that with just managing how much complexity we're introducing into the plan and wanting to do that at the right rate and at the right time. As you heard, we talked about earlier over the course of the next quarter, we'll be ramping up not just R1T, R1S and the EDV 7000 but we're introducing the EDV 500 which is a narrower and shorter variant of the EDV van. Adding additional grants on top of that will come but we're balancing the desire to minimize complexity while we're ramping up production. -------------------------------------------------------------------------------- Mark Delaney, Goldman Sachs - Analyst [40] -------------------------------------------------------------------------------- That's helpful. And for my second question, I was hoping you could comment on the supply environment in terms of the semiconductors and other components. You know, it's been tight for a long while now and auto companies are starting to see a little bit of easing as we move to the fourth quarter, reopening some previously closed factories. At the same time, unfortunately we have the omicron variant that could perhaps complicate things. So, I'm just hoping you can [give] me more specific on any changes that the company maybe seeing in its supply chain environment. Thank you. -------------------------------------------------------------------------------- RJ Scaringe, Rivian Automotive - Founder, Chairman & CEO [41] -------------------------------------------------------------------------------- Yes, supply chain environment has been incredibly challenging. It's unprecedented in a number of issues that we've seen as an industry across a variety of different commodities and components. Certainly, semiconductors is one of those and we're very, very focused on that. It's -- a week doesn't go by around not speaking to heads of some of our major semiconductor suppliers. With that said, we -- I say the element of this is sort of work in positive ways. We've taken a very transparent approach with our suppliers to both communicate to them our ramp and to be very clear in expectations and in return we also have a clear picture of what their ability to supply is and how that translates to our ramp. And we're managing that very thoughtfully and that's -- semiconductor certainly gets the most attention but I'd say that's true across the rest of the supply chain. And in a lot of cases, the areas where the constraints had been challenging for us over the last three-plus months had been in areas that might not be expected. These are smaller suppliers that had been unable to hire second shift or smaller suppliers that are having issues with COVID. So, we're seeing a lot of those types of challenges and bringing up our supply base with several hundred suppliers. We got a team that's very hands on with all these different suppliers, working with them closely in many cases, working with them in their production facilities. So, we have both very good visibility and we're working very collaboratively to make sure that they achieve the ramp. -------------------------------------------------------------------------------- Operator [42] -------------------------------------------------------------------------------- Thank you. Our next question comes from the line of Emmanuel Rosner from Deutsche Bank. Your question, please? -------------------------------------------------------------------------------- Emmanuel Rosner, Deutsche Bank - Analyst [43] -------------------------------------------------------------------------------- Yes, thank you very much. My first question is around software subscription. On what timeline would you expect to start essentially seeing some of these revenues [post] on the commercial side with Amazon, is that going to be from day one and then on the consumer side? And then any sort of like initial views on the consumer side in terms of [big] rates or sort of like average subscription revenue for a vehicle? -------------------------------------------------------------------------------- Jiten Behl, Rivian Automotive - Chief Growth Officer [44] -------------------------------------------------------------------------------- Yes, hi Emmanuel, so two parts for that, so on the commercial side just to confirm the FleetOS (inaudible) at launch in other words as we start deliveries to Amazon this month. Each vehicle comes with the recurring monthly subscription of FleetOS and the -- and the set of features that I included we considered them as a (inaudible) one of a feature set. And as these vehicles are deployed and operational, we expect to grow their feature set by clearing more value on the TCO level for Amazon. So, that software subscription [goal] lies basically now on commercial side. On the consumer side, the software side or the services side of our business has different flavors. The (inaudible) flavor is membership which every vehicle owner today gets a complimentary membership for a year. And our goal is that at the end of that period, we would actually start charging our customers a monthly fee. And that would represent, again, a basket of features which will include but not be limited to charging roadside and connectivity. There will be other elements into that membership offering that we are working on and curating and designing it diligently and you'll use this time, the speed this time whether members get this fee membership through [bill] the basket. Apart from that, there are other flavors of software subscription which would be on an individual software basis or other bundles that we will put together. We expect to work on those and announce those in the coming months. But yes, it's only for (inaudible). We just started bringing delivering which comes to the fee membership period. -------------------------------------------------------------------------------- Claire McDonough, Rivian Automotive - CFO [45] -------------------------------------------------------------------------------- The only the other point that I would just add on that from the services perspective is we have seen strong uptake in regards to our insurance and financing as well for the vehicle, given the really seamless experience, keeping both [QR] transactions and delivery process in matter of minutes. I've gone through it twice myself and literally less than 10 minutes and so the ease of use and simplification of that process has really shown through -- from a take rate perspective, especially on those two leading edge features that are part of that initial transaction as well. -------------------------------------------------------------------------------- Emmanuel Rosner, Deutsche Bank - Analyst [46] -------------------------------------------------------------------------------- OK, that's great color. And then my second question, coming back to the topic of ramping up production, so RJ, I understand your points around is not being structural and obviously to be expected I guess with this kind of challenge and environment. But based on what you've seen so far and sort of going through these issues, are you generally confident that you should -- your ramp up should be on target to be able to deliver some of the 2022 target where we see some reports, early -- a few weeks back around some of the SUV delivery timeline (inaudible) pushed out, and so overall, are you confident that your -- this is mostly the rear view mirror and going forward you're tracking in line with some of your delivery target? -------------------------------------------------------------------------------- RJ Scaringe, Rivian Automotive - Founder, Chairman & CEO [47] -------------------------------------------------------------------------------- Yes, we're quite confident and the path ahead I guess is, it's worth just commenting a little bit on what the activities had been over the last three months. And I said it at the start of the call but it's important to reiterate we're launching three vehicles this year. So, we had the first R1T drive [offline] in September. We just sold the first and delivered the first two R1S' this week, actually Claire and I is the first two customers. And we'll be making deliveries on the EDV 700 very soon here before the end of the year. And when you look at those three different launches, there's also of course following three different certifications. All three of those vehicles had been certified for sale and they're being produced on two different production line. So, there's a line that's producing the R1 products, there's a line that's producing the commercial vehicle products and is we discussed before and this is such a critical element of what we're building we wanted -- we wanted to make sure the company and the organization was architected to facilitate running and operating multiple programs at the same time. One of the challenges that we've seen over the last two months has been bringing up R1S on the R1T line and recognizing that because it's a shared line, we were -- we just started production of saleable units on R1T in September and then within a few weeks we were putting R1S' into the line as well. And that prove to be more challenging than we had anticipated but fortunately we managed through it and we're able to produce enough vehicles to certify the R1S and put that through the validation process. And it was a decision we took and we took the decision to rapidly integrate the R1S into the line while we are still ramping R1T, given really our long-term focus and what we see as being critical, long term for our brand and for our customers of having both those products in the market as quickly as possible. And so as we now look at what the ramp will look like for both R1T and RIS into next year, having done those activities this past fall and having certified both the R1T and the R1S as well as the commercial van, the EDV, it really positions us to rapidly grow through the course of 2022. -------------------------------------------------------------------------------- Emmanuel Rosner, Deutsche Bank - Analyst [48] -------------------------------------------------------------------------------- Great. Thank you. -------------------------------------------------------------------------------- Operator [49] -------------------------------------------------------------------------------- Thank you. Our next question comes from the line of Alex Potter from Piper Sandler. Your question, please? -------------------------------------------------------------------------------- Alexander Potter, Piper Sandler - Analyst [50] -------------------------------------------------------------------------------- OK, thanks guys. First question is on in-house cell capacity in Georgia. You alluded in the investor letter that they will have in-house cell capacity contemplated to be co-located with that facility in Georgia. I'm just -- I'm interested is that going to be the case from day one in 2024 or is it something that you're working into the plan to eventually have in Georgia? -------------------------------------------------------------------------------- RJ Scaringe, Rivian Automotive - Founder, Chairman & CEO [51] -------------------------------------------------------------------------------- As we think about the Georgia site and this is one of the key considerations for us as we look at different sites around the country, this is a -- this is a platform for us to grow from. So, we'll -- as we introduce the first products there, the plant won't immediately start at 400,000 units of annualized capacity. We'll grow to that. In much the same way we sized the site and the site selection process, we made the selection, contemplating a significant [auto] battery cell production but that will come in over phases. And so when we first launch the site, it will be just vehicles and then shortly thereafter, we will add our in-house cell production and that in-house cell production will grow quite dramatically over the course of the following years. And given the criticality of that from a cost structure and from a scaling point of view, it's something that we place a lot of emphasis on in selecting the site. -------------------------------------------------------------------------------- Alexander Potter, Piper Sandler - Analyst [52] -------------------------------------------------------------------------------- OK, great. The second question just on DC fast chargers, if I recall you were working on a target of 600 or so DC fast chargers in the network. I'm just curious to hear if your -- if that is still is the target, what the timeline is behind that and then the opportunities to accelerate maybe also regions of initial focus? Thanks. -------------------------------------------------------------------------------- Jiten Behl, Rivian Automotive - Chief Growth Officer [53] -------------------------------------------------------------------------------- Yes, absolutely. We're on track for the long term (inaudible) target of having 600 sites. We are prioritizing site and synchronizing it with locations where we are making delivery along with setting up service and support infrastructures. So, we're trying to create (inaudible) fashion and (inaudible). There are multiple sites across the country that are in different stages of commissioning, both from procuring the sites, setting it up and we believe having a robust charging infrastructure is going to be critical in the adoption and also from a customer experience point of view. And we are (inaudible) to invest in that area for business and progressing. -------------------------------------------------------------------------------- Alexander Potter, Piper Sandler - Analyst [54] -------------------------------------------------------------------------------- Great. Good to hear. Thanks for taking the question, guys. -------------------------------------------------------------------------------- Operator [55] -------------------------------------------------------------------------------- Thank you. Our next question comes from the line of George Gianarikas from Baird. Your question, please? -------------------------------------------------------------------------------- George Gianarikas, Baird - Analyst [56] -------------------------------------------------------------------------------- Hello, everyone. Thanks for taking my question. Sort of tangential to a previous question asked but some of your auto OEM colleagues have recently secured critical material supply chain contracts and I'm curious as to how you think about the easy materials supply chain and how much of priority you placed on making sure you have materials for the next several years as you ramp production? Thank you. -------------------------------------------------------------------------------- RJ Scaringe, Rivian Automotive - Founder, Chairman & CEO [57] -------------------------------------------------------------------------------- Very similar to the comments I made before with regards to overall battery cell production. We have incredibly strong conviction around the importance of planning an integral role in the upstream supply of battery -- the battery raw materials and we built our team to really drive that. So, that's understanding deeply the mining space, understanding deeply the processing space and of course understanding deeply and designing in-house cells but then support that or leverage that I should say. So with that said, we expect and we believe that a lot of the investments necessary to rapidly build up the upstream raw material and when I say rapidly build up I mean increasing the capacity of the upstream supply chain by a factor of 20 to 30X over the next 10 to 15 years. We believe that the end customers, in this case the OEMs, ourselves included will need to take a very active role in that and it's -- while we haven't made any announcement in the space, it's certainly something that we're very focused on. -------------------------------------------------------------------------------- George Gianarikas, Baird - Analyst [58] -------------------------------------------------------------------------------- Thanks. -------------------------------------------------------------------------------- Operator [59] -------------------------------------------------------------------------------- Thank you. This does conclude the question-and-answer session of today's program. I would like to hand the program back to RJ for any further remarks. -------------------------------------------------------------------------------- RJ Scaringe, Rivian Automotive - Founder, Chairman & CEO [60] -------------------------------------------------------------------------------- Well, thank you everybody for joining the call. It was great to spend time on some questions here and provide some updates on the business. We're really excited about the path ahead and really excited to have such strong support from our investors and partners, and we look forward to future discussions. Thank you. -------------------------------------------------------------------------------- Operator [61] -------------------------------------------------------------------------------- Thank you, ladies and gentlemen for your participation in today's conference. This does conclude the program. You may now disconnect. Good day.