Rivian Insurance experiences strong attachment rate

Rivian hosted its Q2’23 earnings call on Aug 8, 2023. Select highlights:

• Produced 13,992 vehicles: 50% increase from Q1.
• 2023 production guidance increased to 52,000 total units.
• Pricing starts at just over $70,000, with features like up to 400 miles of range, 0-60 mph in 3.5 seconds, and towing capacity up to 11,000 pounds.
• Delivered 60% more vehicles compared to the previous quarter.
• Made more money on each vehicle sold by about $35,000.
• Works with Amazon – as of early July, Rivian EDVs are in operation across over 800 cities in the US. In addition, it recently initiated deliveries of EDVs to Amazon in Europe.
• Since introducing the R1 platform in 2021, it rolled out 22 software updates, adding features like Bird’s-Eye Camera View, Drive Cam, and various modes to enrich the user experience.
• The company lost $412 million this quarter, but that’s an improvement from the $704 million loss during the same time last year.
• Operating costs went down to $873 million this quarter, compared to $1 billion last year.
• The main reason for reduced costs was spending less on stock-based employee pay.
• Rivian hasn’t shared detailed numbers on its insurance platform’s returns. However, it’s a profitable segment, and many of their customers choose to use it. “We’ve not announced any of the specifics on the returns for our insurance platform, but it’s a profitable part of our business, and it’s — the attach rate on this is quite high.”
• Rivian is very optimistic about the potential of its insurance service, also adventure products and the gear that accompanies their vehicles, present a huge opportunity.
• By moving some costs from the main vehicle to accessories, Rivian will be able to offer a base vehicle at a competitive price.

Bottom Line: Consider the attachment rate in the context of the total number of vehicles produced.