Gen 3 autonomy hardware will come in two performance levels, and the lower one costs less than the Gen 2 hardware Rivian ships today. That was the one new number out of the Goldman Sachs Communacopia conference yesterday, where James Philbin, Vidya Rajagopalan and Chip Newcom otherwise held every date already on the record: the second shift at Normal in Q3, point to point autonomy late this year, and automotive gross profit positive on a Q4 exit rate.
Shoutout to Rivian_DD on X for putting together a great summary.
R2 production and the Q4 target
Newcom said Rivian is “still planning to add a second shift here in the third quarter.” No new bottlenecks were named. Q3 ends September 30, and COO Javier Varela said on the Q2 call that the added volume does not show up until Q4.
Order conversion continues to trend well, and each color and interior release is bringing in additional demand: “as we introduce each of those new waves, more interest coming through from customers.” Rivian has still not attached a number to conversion.
The profitability language was unchanged from February. Rivian is “on our way towards achieving automotive gross profit positive on an exit rate basis,” meaning the rate the company is running at as Q4 ends rather than the full quarter’s result. Asked whether unusual pricing or cost reduction assumptions sit behind the target, the answer was no: “It’s all about scaling and building more R2s.” Rivian has not given a specific volume number for what it takes to get there.
Autonomy
Point to point remains on track for late this year. Uber’s CEO and CFO both received demos recently.
Asked about the biggest remaining technical challenges, Philbin pointed to overcaution: “making sure the model is not too conservative, that it’s sort of tracking speed as you would expect.” Harder scenarios are reportedly in better shape, with “very good behavior around relatively complex scenarios like construction or narrow negotiation.”
Customer driving data alone will not produce the target behavior, since drivers roll stop signs and speed. Rivian blends in expert driver data at roughly one part in ten to correct for that.
Gen 3 hardware and RAP1
The two Gen 3 autonomy hardware performance levels price out differently. The lower one costs less than the Gen 2 hardware Rivian ships today, and the higher one costs about the same or slightly more.
What Rivian did not say is how those levels map to trims. My read is that the cheaper version lands on the R2 Standard while Performance and Premium get the higher one, which would match how Rivian has staged the rest of the R2 option sheet, though that is an assumption and not something the company has stated.
The autonomy software already runs on the RAP1 chip and is meeting performance targets without fully optimized software. Hardware characterization testing is ongoing and should be largely complete in about six weeks.
On compute supply, Philbin said GPU capacity through AWS is secured for at least the next six to nine months. “Past that, of course, we’ll need to see.”
Rajagopalan also said Rivian is open to selling the chip outside of vehicles, inviting anyone interested in using it for robots to reach out.
The next checkpoint is September 30, when the second shift is due at Normal.
Can you clarify on the 2 performance levels? Is that with and without lidar for the base model?
My read is that the cheaper version lands on the R2 Standard while Performance and Premium get the higher one. But there was no much clarity beyond what I shared.
This is the first I’ve heard of two different Gen3 Autonomy hardware levels? Do you have any additional information regarding what this means for performance/capabilities? Assume this in some way will align with Lidar???
My read is that the cheaper version lands on the R2 Standard while Performance and Premium get the higher one. But there was no much clarity beyond what I shared.
When will R1 get Gen 3?
Most likely model year 2028
Having two discrete performance levels for the Gen3 hardware is puzzling. Since software functionality costs the same regardless of pricing, the only reason to offer a “crippled” feature set in software is just product differentiation, adding nothing to the bottom line. And from a hardware standpoint, the RAP1 chipset manufacturing cost is the same even if you lower the clock speed or disable some on-chip features. Stripping a little memory out could save some cost, but that would cripple the functionality of Autonomy+ — not an area where you want to limit your product experience or safety. Cutting out the LiDAR would certainly lower costs, but it would diminish Rivian’s ability to gather “ground truth” data for their Point-to-Point data flywheel. A little self-defeating. A real puzzler.
I’m guessing that premium and performance level trim swill get lidar and standard will not get it. Helps protect their margins, while giving some further inventive to upgrade to the higher trim – especially since I suspect any eyes off highway will be restricted to vehicles with lidar only.
In theory they could also cut the compute in half for the standard. Without lidar, I don’t think the extra compute is needed. For the first year, that extra compute will only be used for ground truth data gathering – it won’t be used for the model at all. And if Gen 2 can run the point to point they’re working on, then a Gen 3 cut in half should also be able to run it.
Lastly, the standard trim is not going to be a volume seller the way the premium and performance will be. So not having lidar there isn’t going to effect the data gathering much from a numbers perspective.
All of this seems like very reasonable tradeoffs, given what they’re saying about costs / margins