Rivian Automotive posted a larger-than-expected loss for the second quarter, hit by higher material costs and shrinking revenue from U.S. regulatory credit sales. The electric vehicle (EV) maker said that supply disruptions in heavy rare earth metals key components for electric motors have sharply increased production expenses.
China’s recent export restrictions on heavy rare earth metals have roiled global supply chains, particularly for automakers reliant on these materials. For Rivian, the policy shift meant higher raw material prices and logistical delays, pushing up the cost of EV production in the U.S.
Earnings Miss and Outlook Revision
The company reported an adjusted loss of 80 cents per share for the quarter, wider than analysts’ average forecast of 65 cents, according to LSEG data. Rivian also revised its full-year adjusted core loss guidance to a range of $2 billion to $2.25 billion, up from a previous forecast of $1.7 billion to $1.9 billion.
Rivian attributed part of this increase to a steep drop in income from selling regulatory credits to legacy automakers.
Regulatory Credit Revenue Takes a Hit
Regulatory credits have been an important revenue stream for EV startups. Automakers purchase these credits to avoid penalties for missing fuel economy and emissions targets. However, the demand for such credits has fallen sharply since the Trump administration removed penalties for noncompliance. This policy change significantly reduced the market value of the credits Rivian sells.
Production Slowdown Ahead of New Launches
The EV maker delivered 10,661 vehicles in the second quarter, down 22% from a year earlier. Rivian said it intentionally limited production to prepare for its 2026 model year rollout and the upcoming R2 SUV launch.
Earlier this year, the company cut its 2025 delivery forecast to between 40,000 and 46,000 vehicles, down from the 46,000 to 51,000 range previously expected. Rivian cited higher U.S. tariffs, which have increased production costs and weighed on consumer demand.
The company temporarily halted production for a week during the quarter and plans another pause in the second half of 2025 to integrate new manufacturing processes ahead of the R2 launch.
Federal EV Incentive Nears Expiry
Another looming challenge is the expiration of the $7,500 federal EV tax credit at the end of September. The incentive has been a key driver of EV sales, but once it lapses, Rivian and other automakers could face weaker demand. Still, analysts expect a spike in third-quarter sales as customers rush to take advantage of the credit before it disappears.
Revenue Beats Expectations
Despite the challenges, Rivian reported second-quarter revenue of $1.3 billion, topping the $1.28 billion expected by analysts. The company ended the quarter with $4.81 billion in cash and cash equivalents, slightly higher than the $4.69 billion recorded in the first quarter.
With supply chain pressures, waning regulatory credit sales, and shifting trade policies, Rivian is navigating a complex landscape as it moves toward the launch of its next-generation vehicles. The coming quarters will test the company’s ability to balance cost management with ambitious product rollouts.
