Rivian says it's on track for $250 million Uber funding by year-end, R2 demand strong

By Akash Sriram and Abhirup Roy

Oct 29 (Reuters) - Rivian RIVN.O CEO RJ Scaringe said on Thursday the EV maker is "very confident" it will hit an autonomy milestone this year that unlocks a $250 million tranche of Uber's UBER.N investment, and that demand for its new R2 compact SUV was strong.

The Uber funding and strong R2 sales are crucial to Rivian's push to narrow heavy losses and cash burn while it funds a bet on self-driving technology and leans on its joint venture with Volkswagen VOWG.DE, which has become a major source of revenue.

Uber is investing up to $1.25 billion in Rivian through 2031, which includes an initial $300 million and is contingent on autonomy milestones. Scaringe declined to detail the criteria assigned to each tranche but said the timing was "right on time" against the company's internal plan.

The partnership targets a 2028 launch of driverless R2 robotaxis on Uber's network, starting in a couple of cities and expanding to roughly 25 over about 18 months, he said.

R2 outsold both the R1 SUV and pickup truck and the delivery van in its first full quarter, helping Rivian to record deliveries of 19,248.

"We're still early in the ramp. This is our first quarter of actually being in production of R2, but we've now brought on and are ramping the second shift, and so think of Q4 as another quarter that we'll see further ramp-up of R2," Scaringe told Reuters.

Cheaper trim variants of the R2, a Tesla Model Y competitor, down to $45,000, are due next year.

Cost of goods sold per vehicle fell by more than $12,000 in the third quarter from the prior three-month period, though Rivian still loses money on each car.

Scaringe also dismissed reports of trouble integrating Rivian's software into Volkswagen vehicles as "noisy," saying the relationship is "very positive."

The first Volkswagen vehicle carrying Rivian's technology, a low-cost EV for Europe, is on track for a 2027 launch, he said, and the German automaker will also license the underlying technology of Rivian's AI assistant.