What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2025-02-24 compared with 2024-02-26 · 456 added, 352 removed, 587 unchanged (58% of the section changed)

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Index to Consolidated Financial Statements

Rep ort of KPMG LLP - Detroit, MI , Independent Registered Public Accounting Firm (PCAOB ID:

Rep ort of KPMG LLP - Independent Registered Public Accounting Firm (PCAOB ID:

Consolidated Financial Statements

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Consolidated Statements of Comprehensive Loss

Consolidated Statements of Changes in Contingently Redeemable Convertible Preferred Stock and Stockholders’ Equity

Consolidated Statements of Changes in Stockholders’ Equity

Consolidated Statements of Cash Flows

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We have audited the accompanying consolidated balance sheets of Rivian Automotive, Inc.

and subsidiaries (the Company) as of December 31, 2023 and 2022, the related consolidated statements of operations, comprehensive loss, changes in contingently redeemable convertible preferred stock and stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2023, and the related notes (collectively, the consolidated financial statements).

and subsidiaries (the Company) as of December 31, 2024 and 2023, the related consolidated statements of operations, comprehensive loss, changes in stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2024, and the related notes (collectively, the consolidated financial statements).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2024, in conformity with U.S.

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The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Sufficiency of audit evidence

As discussed in Item 9A.

Controls and Procedures, material weaknesses were identified as of December 31, 2022 that were remediated during the year ended December 31, 2023.

The description of the material weaknesses stated that the Company’s risk assessment process was not effective in implementing controls on a timely basis in response to changes to the business operations, personnel, and other factors affecting certain financial reporting processes and related information technology (IT) systems.

As a result, the Company had ineffective information technology general controls (ITGC) related to certain systems, applications, and tools used for financial reporting;

and the Company did not establish effective user access and segregation of duties controls across financially relevant functions.

Therefore, the automated and manual process level controls over financial reporting which were dependent upon these ITGCs could not be relied upon.

These material weaknesses remained unremediated for a portion of the year ended December 31, 2023.

We identified the evaluation of the sufficiency of audit evidence as a critical audit matter.

Evaluating the sufficiency of audit evidence obtained required especially subjective auditor judgment because of the pervasiveness of the material weaknesses noted above that existed throughout a portion of the year ended December 31, 2023.

Evaluation of the warranty reserve

As discussed in Note 5 to the consolidated financial statements, the Company’s product warranty reserve as of December 31, 2024 was $473 million.

The Company provides a manufacturer’s warranty on new consumer vehicles and a warranty reserve is recorded at the time of sale.

The warranty reserve is an actuarial estimate of the projected costs to repair, replace, or adjust defective component parts under the applicable warranty period.

These estimates are based on an analysis of actual claims incurred to date and expectations of the nature, frequency, and costs of future claims by vehicle cohort, which may leverage benchmark data.

We identified the evaluation of the warranty reserve as a critical audit matter.

Evaluating the Company’s expected frequency of future claims used to determine the warranty reserve required especially subjective auditor judgment and the use of actuarial professionals with specialized skills and knowledge due to the Company’s limited history of vehicle sales.

The following are the primary procedures we performed to address this critical audit matter.

We applied auditor judgment to determine the nature and extent of procedures to be performed over financial statement account balances and we:

• obtained and inspected the Company’s remediation plan to address the prior year material weaknesses that had been identified

• involved information technology professionals with specialized skills and knowledge who assisted in evaluating the remediated design and testing the operating effectiveness of the ITGCs, user access and segregation of duties controls

• increased the number of sample selections compared to what we would have otherwise made if the Company’s controls were designed and operating effectively for the entire year and relied upon during the year

• tested the underlying records of selected transaction data obtained from the impacted information technology systems to support the use of the information in the conduct of the audit

• inspected supporting documentation and evidence of authorization for a selection of manual and automated journal entries.

We evaluated the sufficiency of audit evidence obtained by assessing the results of procedures performed, including the appropriateness of the nature and extent of such evidence.

We applied auditor judgment to determine the nature and extent of procedures to be performed over the warranty reserve.

We performed sensitivity analyses over the Company’s expected frequency of future claims assumption to assess the impact of changes in that assumption on the Company’s determination of the warranty reserve.

We evaluated the design and tested the operating effectiveness of certain internal controls over the Company’s warranty reserve process, including controls related to the Company’s determination of the expected frequency of future claims assumption.

We compared the data used by the Company in developing its actuarial estimate of expected frequency of future claims to relevant claims and sales documentation.

We assessed the Company’s estimated warranty cost per vehicle by comparing it to other automotive companies with more historical claim experience using publicly available information.

We involved actuarial professionals with specialized skills and knowledge, who assisted in:

• evaluating the Company’s estimated future claims by comparing it to an actuarial estimate that was developed utilizing the Company’s actual claims incurred to date

• assessing the Company’s expected frequency of future claims by independently developing an estimate of future claims development patterns using the Company’s actual claims incurred to date.

We have served as the Company’s auditor since 2021.

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In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2023 and 2022, the related consolidated statements of operations, comprehensive loss, changes in contingently redeemable convertible preferred stock and stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2023, and the related notes (collectively, the consolidated financial statements), and our report dated February 26, 2024 expressed an unqualified opinion on those consolidated financial statements.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2024 and 2023, the related consolidated statements of operations, comprehensive loss, changes in stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2024, and the related notes (collectively, the consolidated financial statements), and our report dated February 24, 2025 expressed an unqualified opinion on those consolidated financial statements.

Basis for Opinion

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Total assets $ 16,778 $ 15,410

LIABILITIES AND STOCKHOLDERS’ EQUITY

LIABILITIES AND EQUITY

Current liabilities:

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Accrued liabilities ( Note 11 )

Current portion of lease liabilities and other current liabilities 270 361

Current portion of deferred revenues, lease liabilities, and other liabilities 361 917

Total current liabilities 2,487 2,251

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Accumulated deficit ( 18,558 ) ( 23,305 )

Accumulated other comprehensive (loss) income ( 2 ) 3

Accumulated other comprehensive income (loss) 3 ( 4 )

Noncontrolling interest — 4

Total stockholders' equity 9,141 6,562

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2022 2023 2024

Revenues (Note 2)

Automotive $ 1,554 $ 4,132 $ 4,486

Software and services 104 302 484

Total revenues (Note 4)

1,658 4,434 4,970

Cost of revenues (Note 2)

Automotive 4,666 6,150 5,693

Software and services 115 314 477

Total cost of revenues (Note 4)

4,781 6,464 6,170

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1,789 1,714 1,876

Other expenses (Note 2)

Total operating expenses 3,733 3,709 3,489

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Loss on convertible notes, net (Note 10)

Other (expense) income, net ( 1 ) 18 6

Other income (expense), net 18 6 ( 7 )

Loss before income taxes ( 6,748 ) ( 5,431 ) ( 4,741 )

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Net loss ( 6,752 ) ( 5,432 ) ( 4,746 )

Net income attributable to noncontrolling interest — — 1

Net loss attributable to common stockholders $ ( 6,752 ) $ ( 5,432 ) $ ( 4,747 )

Net loss attributable to common stockholders, basic and diluted $ ( 6,752 ) $ ( 5,432 ) $ ( 4,747 )

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Weighted-average common shares outstanding, basic and diluted 913 947 1,013

*The prior periods have been recast to conform to current period presentation.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

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Comprehensive loss ( 6,754 ) ( 5,427 ) $ ( 4,753 )

Comprehensive income attributable to noncontrolling interest — — 1

Comprehensive loss attributable to common stockholders $ ( 6,754 ) $ ( 5,427 ) $ ( 4,754 )

See accompanying notes to these consolidated financial statements.

RIVIAN AUTOMOTIVE, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN CONTINGENTLY REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(in millions)

Stockholders' Equity

Contingently Redeemable Convertible Preferred Stock Common Stock Additional Paid-In Capital Accumulated Deficit Accumulated Other Comprehensive (Loss) Income

Shares Amount Shares Amount Total

BALANCE—December 31, 2020 504 $ 5,244 101 $ — $ 302 $ ( 1,686 ) $ — $ ( 1,384 )

Capital stock issuance 72 2,650 185 — 14,181 — — 14,181

Conversion of contingently redeemable preferred stock ( 576 ) ( 7,894 ) 576 1 7,893 — — 7,894

Conversion of convertible notes — — 38 — 2,941 — — 2,941

Stock-based compensation — — — — 570 — — 570

Net loss — — — — — ( 4,688 ) — ( 4,688 )

Common Stock Additional Paid-In Capital Accumulated Deficit Accumulated Other Comprehensive (Loss) Income Non-controlling Interest Total

Shares Amount

BALANCE—December 31, 2021 900 $ 1 $ 25,887 $ ( 6,374 ) $ — $ — $ 19,514

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BALANCE—December 31, 2023 968 1 27,695 ( 18,558 ) 3 — 9,141

Capital stock issuance including employee stock purchase plan 68 — 61 — — — 61

Funding of 50 % interest in Rivian and VW Group Technology, LLC

— — 89 — — 3 92

Conversion of convertible notes 95 — 1,133 — — — 1,133

Stock-based compensation — — 888 — — — 888

Other comprehensive loss — — — — ( 7 ) — ( 7 )

Net loss — — — ( 4,747 ) — 1 ( 4,746 )

BALANCE—December 31, 2024 1,131 $ 1 $ 29,866 $ ( 23,305 ) $ ( 4 ) $ 4 $ 6,562

See accompanying notes to these consolidated financial statements.

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Stock-based compensation expense 987 821 692

Other expenses 643 — —

Loss on convertible notes, net — — 112

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Inventory ( 1,657 ) ( 1,604 ) 307

Other current assets ( 81 ) ( 14 ) ( 62 )

Other non-current assets ( 8 ) ( 22 ) ( 84 )

Other assets ( 36 ) ( 146 ) ( 221 )

Accounts payable and accrued liabilities 623 105 ( 572 )

Other current liabilities 83 104 73

Other non-current liabilities 18 101 217

Deferred revenue 61 149 1,619

Other liabilities 144 141 316

Net cash used in operating activities ( 5,052 ) ( 4,866 ) ( 1,716 )

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Cash flows from financing activities:

Proceeds from share issuance upon initial public offering, net of underwriting discounts and commissions and offering costs 13,530 — —

Proceeds from issuance of capital stock including employee stock purchase plan 102 61 64

Proceeds from issuance of convertible notes — 3,195 1,000

Proceeds from issuance of long-term debt 1,226 — —

Proceeds from funding of 50 % interest in Rivian and VW Group Technology, LLC

Purchase of capped call options — ( 108 ) —

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Conversion of convertible notes $ — $ — $ 1,133

Conversion of convertible preferred stock $ 7,894 $ — $ —

*The prior periods have been recast to conform to current period presentation.

See accompanying notes to these consolidated financial statements.

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(together with its consolidated subsidiaries, “Rivian” or the “Company”) was incorporated as a Delaware corporation on March 26, 2015.

Rivian was formed for the purpose of designing, developing, manufacturing, and selling category-defining electric vehicles (“EVs”), accessories, and related services directly to customers in the consumer and commercial markets.

The nature of the Company’s operations during the year ended December 31, 2021 was primarily research and development activities related to vehicle development and its related technologies and pre-production activities related to manufacturing and sales.

Rivian was formed for the purpose of developing and building category-defining electric vehicles (“EVs”), and software and services that address the entire lifecycle of the vehicle, directly to customers in the consumer and commercial markets.

The nature of the Company’s operations during the years ended December 31, 2022, 2023, and 2024 was primarily the production and sale of EVs in the United States.

Segment Information

The Company’s Chief Executive Officer (“CEO”) has been identified as the chief operating decision maker (“CODM”).

As the CODM reviews financial information presented on a consolidated basis for purposes of making operating decisions, allocating resources, and evaluating financial performance, the Company has determined that it operates in one operating segment and one reportable segment.

The Company’s assets and revenues are primarily in the United States.

During the three months ended December 31, 2024, in conjunction with growth in revenues from software and services and establishing Rivian and VW Group Technology, LLC, there was a change in the composition of the Company’s segments.

As a result of this change, the Company analyzes the results of the business through the following reportable segments:

Automotive and Software and Services.

Basis of Presentation

The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“U.S.

The accompanying consolidated financial statements have been prepared in accordance with U.S.

GAAP and the applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding annual financial information.

The accompanying consolidated financial statements, in the opinion of management, reflect all normal recurring adjustments necessary to fairly present the financial position, results of operations, cash flows, and change in equity for the periods presented.

Certain amounts in the prior period consolidated financial statements have been aggregated to conform to current period presentation.

Certain amounts in the prior period consolidated financial statements have been conformed to current period presentation.

Basis of Consolidation

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Intercompany balances and transactions have been eliminated in consolidation.

Initial Public Offering

In November 2021, the Company completed its underwritten initial public offering (“IPO”) of approximately 176 million shares of Class A common stock at a public offering price of $ 78.00 per share, which included the exercise in full by the underwriters of their option to purchase approximately 23 million additional shares of Class A common stock.

The net proceeds to the Company from the IPO were $ 13,530 million.

See Note 13 “Stockholders’ Equity” for more information regarding the IPO.

Rivian and VW Group Technology, LLC

In November 2024, the Company established a joint venture with Volkswagen International America Inc.

and Volkswagen AG and its affiliates (“Volkswagen Group”).

Rivian and VW Group Technology, LLC (the “Joint Venture”) was established as an electrical architecture technology company with a focus on software, electronic control units and related network architecture design and development.

The initial focus of the Joint Venture will be to bring next-generation electrical architecture and best-in-class software technology to both companies’ future electric vehicles.

The Company and Volkswagen Group each contributed working capital, certain assets, and personnel to the Joint Venture in exchange for 50 % each of the equity interests in the Joint Venture, with the net cash and non-cash contribution from Volkswagen Group totaling $ 92 million .

The Joint Venture i s a consolidated variable interest entity.

See Note 19 "Variable Interest Entities” for more information.

As part of the formation of the Joint Venture, the Company received $ 1,295 million for intellectual property licensed to Volkswagen Group, enabling them to benefit from the Company’s existing technologies in conjunction with further development by the Joint Venture (see Note 4 "Revenues" for more information).

In addition, the Company and Volkswagen Group entered into an investment agreement (“Investment Agreement”) for three additional equity investments in the Company, pursuant to the achievement of the following milestones:

• Upon the later of June 30, 2025 and the achievement of the Financial Milestones defined in the Investment Agreement, the Company will receive $ 1,000 million in exchange for $ 750 million of the Company’s class A common stock, calculated based on the Company’s 30 -trading day volume-weighted average price prior to share issuance.

See Note 4 "Revenues" for more information.

• Upon achievement of the Testing Milestones defined in the Investment Agreement, the Company will receive $ 1,000 million in exchange for $ 1,000 million of the Company’s class A common stock, calculated based on the Company’s 30 -trading day volume-weighted average price prior to share issuance (although the aggregate share issuance may be effected through convertible note mechanisms or in stages).

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

• Upon the earlier of January 3, 2028 and the achievement of the Start of Production Milestone defined in the Investment Agreement, the Company will receive $ 460 million in exchange for $ 250 million of the Company’s class A common stock, calculated based on the Company’s 30 -trading day volume-weighted average price prior to share issuance.

See Note 4 "Revenues" for more information.

The Company, together with Joint Venture Equityholder, and Volkswagen Group also entered into loan agreements (“Loan Agreements”) providing for a committed $ 1,000 million term loan facility, available to the Joint Venture.

When and if funded, the proceeds would be concurrently loaned by the Joint Venture to the Joint Venture Equityholder to be used by the Company.

Finally, in June 2024, the Company received $ 1,000 million in proceeds from the 2026 Convertible Note, which converted into shares of the Company’s Class A common stock in December 2024.

See Note 10 “Debt” for more information.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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These estimates require the use of judgments and assumptions that may affect the reported amounts of assets, liabilities, revenues, and expenses in the periods presented.

Estimates are used for, but not limited to, inventory valuation, property, plant, and equipment, warranty reserves, leases, income taxes, stock-based compensation, and commitments and contingencies.

The Company believes that the accounting estimates and related assumptions employed by the Company are appropriate and the resulting balances are

RIVIAN AUTOMOTIVE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

reasonable under the circumstances.

However, due to the inherent uncertainties involved in making estimates, the actual results could differ from the original estimates, requiring adjustments to these amounts in future periods.

Estimates are used for, but not limited to, warranty reserves, inventory valuation, property, plant, and equipment, leases, income taxes, stock-based compensation, commitments and contingencies, residual value risk sharing (“RVRS”) liability, and other revenue transactions.

The Company believes that the accounting estimates and related assumptions employed in the consolidated financial statements are appropriate and the resulting balances are reasonable under the circumstances.

However, due to the inherent uncertainties involved in making estimates, actual results could differ from the original estimates, requiring adjustments to estimated amounts in future periods.

Accounts Receivable, Net

Accounts receivable primarily consist of amounts due from customers from the sale of EVs and are reported at the invoiced amount, less an allowance for any potential uncollectible amounts.

Accounts receivable primarily consist of amounts due from customers for the sale of EVs and regulatory credits and are reported at the invoiced amount, less an allowance for any potential uncollectible amounts.

The Company’s allowance for uncollectible amounts was not material as of December 31, 2023 and 2024.

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In the normal course of business, the Company is exposed to global market risks, including the effect of changes in certain commodity prices, interest rates, and foreign currency exchange rates, and may enter into derivative contracts, such as forwards, options, swaps, or other instruments, to manage these risks.

Derivative instruments are recorded on the Consolidated Balance Sheets in either Other current assets or Current portion of lease liabilities and other current liabilities and are measured at fair value.

Derivative instruments are recorded on the Consolidated Balance Sheets in either Other current assets or Current portion of deferred revenues, lease liabilities, and other liabilities and are measured at fair value.

They are classified within Level 2 of the fair value hierarchy because they are valued using observable inputs other than quoted prices for identical assets or liabilities in active markets.

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The Company does not utilize derivative instruments for trading or speculative purposes.

The Company has entered into commodity contracts and the resulting asset, liability, and aggregate notional amount is not material as of December 31, 2022 and 2023.

The asset, liability, and aggregate notional amount resulting from the Company’s commodity contracts were not material as of December 31, 2023 and 2024.

These derivatives are economic hedges used to manage overall price risk and have not been designated as hedging instruments.

During the years ended December 31, 2023 and 2024, losses and gains resulting from changes in fair value were not material.

Vehicle Sales

The Company’s revenues primarily include revenue from the sale of EVs and specific services that meet the definition of a performance obligation, including over-the-air (“OTA”) vehicle software updates.

Revenue from the sale of EVs is recognized at a point in time when control transfers to the customer, which generally occurs upon delivery.

Revenue from the sale of EDVs is recognized in accordance with a bill and hold arrangement, under which risk of ownership has been transferred to the customer but delivery is delayed at the request of the customer.

In such cases, the EDVs are separately identified as belonging to the customer, ready for physical delivery to the customer, and the Company does not have the ability to sell the EDVs to another customer.

As of December 31, 2023, all EDVs under this bill and hold arrangement have been delivered.

Payment for EV sales is typically received at or prior to delivery or according to payment terms customary to the business.

Sales tax is excluded from the measurement of the transaction price.

As the OTA vehicle software updates represent a stand ready obligation to provide these services, revenue related to OTA vehicle software updates is recognized ratably throughout the performance period, beginning when control of the vehicle is transferred to the customer and continuing through the estimated useful life of the EV.

The standalone selling prices of performance obligations are estimated by considering costs to develop and deliver the good or service, third-party pricing of similar goods or services, and other available information.

The transaction price is allocated among the performance obligations in proportion to the standalone selling prices.

Other Revenues

The Company generates tradable credits from various regulatory standards primarily related to zero-emission vehicles and greenhouse gas.

The Company sells these credits to other manufacturers.

Revenue is recognized at the time control of the regulatory credits is transferred to the purchasing party, and payment is typically received in accordance with customary

RIVIAN AUTOMOTIVE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

payment terms.

Other revenues consist primarily of sales of vehicle trade-ins (“remarketing”), repair and maintenance services, vehicle accessories, and other complementary services.

Contract Liabilities

The Company recognizes contract liabilities when payments are received or due before the related performance obligation is satisfied.

The Company’s contract liabilities are primarily related to payments for vehicles collected prior to delivery of the EV, generally satisfied within one quarter or less, OTA vehicle software updates, generally satisfied over the estimated useful life of the EV , and extended service contracts, satisfied over the coverage period.

The Company’s contract liabilities exclude fully-refundable customer deposits.

The following table summarizes the Company’s contract liabilities recorded by line item on the Consolidated Balance Sheets (in millions):

December 31, 2022 December 31, 2023

Current portion of lease liabilities and other current liabilities $ 37 $ 88

Other non-current liabilities 32 133

Total contract liabilities $ 69 $ 221

Cost of Revenues

Cost of revenues primarily relates to the cost of EVs and includes direct parts, material and labor costs including stock-based compensation, manufacturing overhead (e.g., depreciation of machinery and tooling), shipping and logistics costs, and reserves including for estimated warranty costs related to the production of consumer and commercial vehicles, adjustments to write down the carrying value of inventory when it exceeds its estimated net realizable value (“NRV”), losses on firm purchase commitments, and to adjust for excess and obsolete inventory based upon expectations of forecasted demand.

Warranty and Field Service Actions

The Company provides a manufacturer’s warranty on new consumer vehicles.

A warranty reserve is accrued at the time of sale or once a specific field service action has been identified.

The amount accrued is comprised of management’s estimate of the projected costs to repair, replace, or adjust defective component parts under the applicable warranty period and identified field service actions.

These estimates are based on an analysis of actual claims incurred to date and expectations of the nature, frequency, and costs of future claims by vehicle model, including relevant benchmark data.

The Company reevaluates the adequacy of the warranty reserve on a regular basis and makes revisions when necessary.

Warranty estimates are inherently uncertain, especially given the Company’s limited history of sales, and more historical experience or updates to benchmarks and projections may cause material changes to the warranty reserve in the future.

The following table summarizes the Company’s warranty and field service action reserve recorded by line item on the Consolidated Balance Sheets (in millions):

December 31, 2022 December 31, 2023

Current portion of lease liabilities and other current liabilities $ 30 $ 91

Other non-current liabilities 70 184

Total warranty reserve $ 100 $ 275

Warranty expense is recorded as a component of “Cost of revenues” in the Company’s Consolidated Statements of Operations .

The Company’s warranty and field service action activity for the years ended December 31, 2021 and 2022 was

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primarily for warranties issued during the period.

The following table presents the warranty and field service action activity for the year ended December 31, 2023 (in millions):

Year Ended December 31, 2023

Beginning balance $ 100

Warranties issued in period 233

Adjustments to pre-existing warranties ( 22 )

Warranty costs incurred ( 36 )

Ending balance $ 275

Concentration of Risk

Counterparty Credit Risk

Financial instruments that potentially subject the Company to concentration of counterparty credit risk consist of cash and cash equivalents, short-term investments, restricted cash, customer deposits, derivative instruments, and debt.

The Company is exposed to credit risk on cash to the extent that a balance with a financial institution exceeds Federal Deposit Insurance Company insurance limits.

The Company is exposed to credit risk on cash equivalents and short-term investments to the extent that counterparties are unable to settle maturities or sales of investments and on customer deposits to the extent that counterparties are unable to complete the corresponding purchase transaction.

Financial instruments that potentially subject the Company to concentration of counterparty credit risk consist of cash and cash equivalents, short-term investments, accounts receivable, customer deposits, derivative instruments, and debt.

The Company is exposed to credit risk on cash to the extent that a balance with a financial institution exceeds the Federal Deposit Insurance Company insurance limits.

The Company is exposed to credit risk on cash equivalents and short-term investments to the extent that counterparties are unable to settle maturities or sales of investments.

The Company is exposed to credit risk on accounts receivable to the extent that counterparties are unable to pay for the sales transaction and on customer deposits to the extent that counterparties are unable to complete the corresponding purchase transaction.

The Company is exposed to credit risk on derivative instruments to the extent that counterparties are unable to settle derivative asset positions and on debt to the extent that the senior secured asset-based revolving credit facility (“ABL Facility”) lenders are not able to extend credit.

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As of December 31, 2023 and 2024, all of the Company’s cash, typically in amounts exceeding insured limits, was distributed across several large financial institutions that the Company believes are of high credit quality.

Management evaluates and approves credit standards and oversees the credit risk management function related to cash equivalents, short-term investments, and customer deposits.

As of December 31, 2022 and 2023, the counterparties to the Company’s derivative instruments and the ABL Facility lenders are financial institutions that the Company believes are of high credit quality.

The Company is subject to risks related to its dependence on its suppliers, the majority of which are single-source providers of input materials or product components for the Company’s products.

Any inability or unwillingness of the Company’s suppliers to deliver necessary input materials or product components, including semiconductors, at timing, prices, quality, and volumes that are acceptable to the Company could have a material impact on the Company’s business, prospects, financial condition, results of operations, and cash flows.

Fluctuations in the cost of input materials or product components and supply interruptions or shortages could materially impact the Company’s business.

Impairment of Long-Lived Assets (Held-and-Used Long-Lived Assets)

The Company reviews property, plant, and equipment and finite-lived intangible assets for impairment whenever events or changes in circumstances occur that indicate that the carrying amount of an asset group may not be fully recoverable.

Management evaluates and approves credit standards and oversees the credit risk management function related to cash equivalents, short-term investments, accounts receivable, and customer deposits.

As of December 31, 2023 and 2024, the counterparties to the Company’s derivative instruments, the ABL Facility lenders, and Chase Bank (as a source of accounts receivable, see Note 4 "Revenues" for more information) are financial institutions that the Company believes are of high credit quality.

The Company is subject to risks related to its dependence on its suppliers, the majority of which are single-source providers of raw materials or components for the Company’s products.

Any inability or unwillingness of the Company’s suppliers to deliver necessary raw materials or product components, at timing, prices, quality, and volumes that are acceptable to the Company could have a material impact on the Company’s business, prospects, financial condition, results of operations, and cash flows.

Fluctuations in the cost of raw materials or product components and supply interruptions or shortages could materially impact the Company’s business.

Impairment of Long-Lived Assets

Property, plant, equipment, and finite-lived intangible assets are reviewed for impairment whenever events or changes in circumstances occur that indicate that the carrying amount of an asset group may not be fully recoverable.

Events that trigger a test for recoverability include material adverse changes in projected revenues and expenses, present cash flow losses combined with a history of cash flow losses or a forecast that demonstrates significant continuing losses, significant negative industry or economic trends, a current expectation that a long-lived asset group will be disposed of significantly before the end of its useful life, a significant adverse change in the manner in which an asset group is used or in its physical condition, or when there is a change in the asset grouping.

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The Company records an impairment charge for the difference between the carrying value of the asset group and its estimated fair market value.

Depending on the

RIVIAN AUTOMOTIVE, INC.

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asset, estimated fair market value may be determined either by use of a discounted cash flow model or by reference to estimated selling values of assets in similar condition.

Depending on the asset, estimated fair market value may be determined either by use of a discounted cash flow model or by reference to estimated selling values of assets in similar condition.

Employee Benefit Plan

The Company provides a defined contribution plan for substantially all employees in the United States in which the Company provides discretionary matching contributions.

The Company made matching contributions to the defined contribution plan for the years ended December 31, 2021, 2022 and 2023 which were not material.

The Company’s matching contributions to the defined contribution plan for the years ended December 31, 2022, 2023 and 2024 were not material.

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Research and Development Costs

R&D costs consist primarily of personnel costs for teams in engineering and research, prototyping expenses, consulting and contractor expenses, amortized equipment costs, and allocation of indirect costs.

Most R&D costs are expensed as incurred.

R&D costs also include the cost of vehicle electrical architecture and software development services funded by the Company (see Note 1 "Presentation and Nature of Operations" , Note 4 "Revenues" , and Note 19 "Variable Interest Entities" for more information).

Most R&D costs are recognized as expenses as incurred.

Selling, General, and Administrative

SG&A expenses consist primarily of personnel costs for teams in sales, service, facilities, corporate, executive, finance, and other administrative functions, as well as outside professional services, including legal, accounting, and audit services.

SG&A expenses also include allocated facilities expenses such as rent and depreciation, and other general corporate expenses such as travel and recruiting expenses.

Advertising costs are recorded in “Selling, general, and administrative” in the Consolidated Statement of Operations as they are incurred.

The advertising costs recognized during the years ended December 31, 2022, 2023 and 2024 were not material.

Other Expenses

Upon the IPO, the Company donated approximately 8 million shares of Class A common stock and $ 20 million cash to Forever by Rivian, Inc., a 501(c)(4) social welfare organization (“Forever by Rivian”).

As a result, $ 663 million was recorded in “Other expenses” in the Consolidated Statement of Operations during the year ended December 31, 2021.

NEW ACCOUNTING STANDARDS

Upcoming Accounting Standards Not Yet Adopted

Accounting Standards Update (“ASU“) 2020-04, Reference Rate Reform (Topic 848):

Facilitation of the Effects of Reference Rate Reform on Financial Reporting provides optional expedients and exceptions to the accounting for contracts, hedging relationships, and other transactions that reference the London Interbank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued because of reference rate reform.

The expedients and exceptions provided do not apply to contract modifications made and most hedging relationships entered into or evaluated after December 31, 2024.

The Company adopted the provisions of the ASU during the year ended December 31, 2023 with no impact to the consolidated financial statements.

As of December 31, 2023, the Company does not have any LIBOR-based debt outstanding.

ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures updates required disclosures of significant reportable segment expenses that are regularly provided to the CODM and included within each reported measure of a segment's profit or loss.

This ASU also requires disclosure of the title and position of the individual identified as the CODM and an explanation of how the CODM uses the reported measures of a segment’s profit or loss in assessing segment performance and deciding how to allocate resources.

Recently Adopted And Upcoming Accounting Standards Not Yet Adopted

Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures updates required disclosures of significant reportable segment expenses that are regularly provided to the chief operating decision maker (“CODM”) and included within each reported measure of a segment's profit or loss.

The ASU also requires disclosure of the title and position of the individual identified as the CODM and an explanation of how the CODM uses the reported measures of a segment’s profit or loss in assessing segment performance and deciding how to allocate resources.

The ASU is effective for annual periods beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, though early adoption is permitted.

Adoption of the ASU should be applied retrospectively to all prior periods presented in the financial statements.

The Company is currently evaluating the presentational impact of this ASU and expects to adopt in the year ended December 31, 2024.

The Company adopted this ASU for the year ended December 31, 2024 and applied the amendments retrospectively to all prior periods presented in the consolidated financial statements (see Note 18 "Segment Information" ).

ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures enhances the transparency and usefulness of income tax disclosures.

The updates are effective for annual periods beginning after December 15, 2024 on a prospective basis, though early adoption is permitted.

The updates are effective for annual periods beginning after December 15, 2024 on a prospective or retrospective basis, though early adoption is permitted.

The Company is currently evaluating the presentational impact of this ASU and expects to adopt in the year ended December 31, 2025.

In March 2024, the SEC issued a final rule under SEC Release Nos.

33-11275 and 34-99678, “The Enhancement and Standardization of Climate-Related Disclosures for Investors.” The rule requires disclosure of material climate-related information outside of the audited financial statements and disclosure in the footnotes addressing specified financial statement effects of severe weather events and other natural conditions above certain financial thresholds, certain carbon offsets, and renewable energy credits or certificates.

The standard is effective for the Company's 2025 Annual Report on Form 10-K.

In April 2024, the SEC released an order staying this final rule pending judicial review of all the petitions challenging the rule.

The Company is in the process of analyzing the expected impact of the rule and related litigation on the Company‘s disclosures.

RIVIAN AUTOMOTIVE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table disaggregates revenue by major source (in millions):

Years Ended December 31,

2022 2023 2024

New electric vehicles $ 1,554 $ 4,059 $ 4,161

Regulatory credits — 73 333

Software and services 104 302 476

Total revenues $ 1,658 $ 4,434 $ 4,970

New Electric Vehicles

New EV revenues are primarily derived from the sale of consumer and commercial EVs, and related promises that meet the definition of a performance obligation, including over-the-air (“OTA”) vehicle software updates.

Revenue from the sale of EVs is recognized at the point in time when control transfers to the customer, which generally occurs upon delivery.

Revenue from the sale of Electric Delivery Vans (“EDVs”) is recognized in accordance with a bill and hold arrangement, under which revenue is recognized when risk of ownership has been transferred to the customer, but pick-up is delayed at the request of the customer.

In such cases, the Company does not have the ability to sell the EDVs to another customer, and they are separately identified as belonging to and ready for pick-up by the customer.

Payment for EV sales is typically received at or prior to delivery or according to payment terms customary to the business.

Sales tax is excluded from the measurement of the transaction price.

During the year ended December 31, 2024, approximately 37 %, of the Company’s revenues were from new EV sales to Chase Bank, with Chase Bank entering into leasing arrangements for purchased vehicles.

The Company has an obligation to share a portion of the difference between the residual value realized by Chase Bank at the end of the lease term and the residual value determined at lease inception.

This obligation is recorded upon delivery of vehicles to Chase Bank as an RVRS liability in “Other non-current liabilities” on the Consolidated Balance Sheets .

The RVRS liability is recorded as a reduction to the transaction price and is estimated at the amount the Company is expected to pay to Chase Bank at the end of the lease term.

The estimate is based on third-party residual value publications and estimated future prices.

While the Company reevaluates the adequacy of the RVRS liability on a regular basis and makes revisions when necessary, the estimate is inherently uncertain, especially given the limited history of Rivian leases, and more historical experience or updates to benchmarks and projections may cause changes to the RVRS liability in the future.

As of December 31, 2024 the RVRS liability was not material.

The transaction price is allocated among the performance obligations in proportion to the standalone selling prices.

Regulatory Credits

The Company generates tradable credits from various regulatory standards, including standards related to zero-emission vehicles (ZEVs”) and greenhouse gas.

The Company sells regulatory credits to third parties, and revenue is recognized at the point in time that control of the regulatory credits is transferred to the purchasing party.

Payment is typically received within one quarter or less of transfer of control of the credits to the customer.

Software and Services

Software and services revenues consist primarily of sales of vehicle trade-ins (“remarketing”) and vehicle repair and maintenance services, as well as new services provided by the Joint Venture to further develop, customize, and enhance Rivian’s existing vehicle electrical architecture technology and software for use in the customer’s future vehicle programs.

RIVIAN AUTOMOTIVE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Remarketing revenue is recognized at a point in time when vehicle title and risk of loss transfer to the customer.

Revenues for vehicle repair and maintenance services are recognized over time as services are provided.

Because the services provided by the Joint Venture involve significant modification and customization of Rivian’s existing vehicle electrical architecture technology and software for the customer, the intellectual property licensed to the customer and the ongoing development services are combined into a single performance obligation in the contract with the customer.

Revenue for the combined performance obligation is recognized over time, using an input-based measure of progress, because the customer has the ability to both direct the use of and obtain substantially all of the remaining benefits from the technology and software as it is being developed, customized, and enhanced for the customer.

The combined performance obligation is satisfied over time, until the vehicle electrical architecture technology and software promised to the customer is completed.

In addition to ongoing payments to fund the Joint Venture’s development services, revenue recognized for the combined performance obligation includes the following consideration transferred by the customer:

• $ 1,295 million received for a license of intellectual property related to Rivian’s existing vehicle electrical architecture and software technology

• Variable consideration in the form of the $ 250 million to be received as part of the Financial Milestones payment, which the Company has determined is probable of receipt (see Note 1 "Presentation and Nature of Operations" )

• The $ 210 million to be received no later than January 3, 2028 as part of the Start of Production Milestone payment (see Note 1 "Presentation and Nature of Operations" ), and

• The $ 201 million in noncash consideration paid by Volkswagen Group in the form of a loan commitment (see Note 10 "Debt" ).

Each of the above components of the consideration transferred by the customer is included in the transaction price for the combined performance obligation because they were all negotiated as a package with a single commercial objective (i.e., bringing next-generation electrical architecture technology and best-in-class software to future Volkswagen Group vehicle programs).

The majority of the transaction price is included in the Company’s contract liabilities as of December 31, 2024.

As of December 31, 2024, the Company expects to recognize the corresponding revenue over approximately four years , with the amount of revenue recognized each period gradually increasing over time as the Joint Venture ramps its operations and the level of effort increases.

It is reasonably possible that the Company’s expectations could change over time, according to the pattern of progress toward satisfaction of the combined performance obligation to develop, customize, and enhance Rivian’s existing vehicle electrical architecture technology and software for use in the customer’s future vehicle programs.

Accordingly, the pattern of revenue recognized could be adjusted over time and ultimately differ from current expectations.

Payment for vehicle electrical architecture and software development services is generally due in advance.

Payment for remarketing and vehicle repair and maintenance services is typically received when control transfers to the customer or due in accordance with payment terms customary to the business.

Contract Liabilities

The Company recognizes contract liabilities when payments are received or due before the related performance obligation is satisfied.

The Company’s contract liabilities are primarily comprised of the $ 1,295 million received and the $ 201 million in noncash consideration discussed above, which will be reduced over time as revenue is recognized.

Contract liabilities also include payments for vehicles collected prior to delivery of the EV, generally satisfied within one quarter or less, OTA vehicle software updates, generally satisfied over the estimated useful life of the EV , and extended vehicle repair and maintenance contracts, satisfied over the coverage period.

The Company’s contract liabilities exclude fully-refundable customer deposits.

The following table summarizes the Company’s contract liabilities recorded by line item on the Consolidated Balance Sheets (in millions):

December 31, 2023 December 31, 2024

Current portion of deferred revenues, lease liabilities, and other liabilities $ 88 $ 552

Other non-current liabilities 133 1,288

Total contract liabilities $ 221 $ 1,840

Revenues recognized from contract liability balances as of December 31, 2022 and 2023 were not material for the years ended December 31, 2023 and 2024.

RIVIAN AUTOMOTIVE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Cost of Revenues

Cost of revenues primarily relates to new vehicles and includes direct materials and labor costs, including stock-based compensation;

manufacturing overhead (e.g., depreciation of machinery and tooling);

shipping and logistics costs;

and reserves, including for estimated warranty costs and adjustments to write down the carrying value of inventory when it exceeds its estimated net realizable value (“NRV”), as well as cost reductions resulting from the generation of refundable manufacturing-related tax credits accounted for as government grants.

Cost of revenues for software and services also includes the cost of vehicle electrical architecture and software development services funded by Volkswagen Group (see Note 1 "Presentation and Nature of Operations" and Note 19 "Variable Interest Entities" for more information).

WARRANTY AND FIELD SERVICE ACTIONS

The Company provides a manufacturer’s warranty on new consumer vehicles.

A warranty reserve is recorded at the time of sale and once a specific field service action has been identified.

The amount reserved is comprised of an actuarial estimate of the projected costs to repair, replace, or adjust defective component parts under the applicable warranty period and the estimated cost of identified field service actions.

These estimates are based on an analysis of actual claims incurred to date and future expectations about the nature, frequency, and cost of future claims by vehicle cohort, which may leverage benchmark data.

The Company re-evaluates the adequacy of the warranty reserve on a regular basis and makes revisions when appropriate.

Warranty estimates are inherently uncertain, especially given the Company’s limited history of sales, and more historical experience or updates to projections and benchmarks may cause material changes to the warranty reserve in the future.

The following table summarizes the Company’s warranty reserve recorded by line item on the Consolidated Balance Sheets (in millions):

December 31, 2023 December 31, 2024

Current portion of deferred revenues, lease liabilities, and other liabilities $ 91 $ 146

Other non-current liabilities 184 327

Total warranty reserve $ 275 $ 473

Warranty expense is recorded as a component of automotive cost of revenues in the Company’s Consolidated Statements of Operations .

The Company’s warranty and field service action activity for the year ended December 31, 2022 was primarily for warranties issued during the period.

The following table presents the warranty and field service action activity within the reserve for the years ended December 31, 2023 and 2024 (in millions):

Year Ended December 31,

Beginning balance $ 100 $ 275

Warranties issued in period 233 261

Adjustments to pre-existing warranties ( 22 ) 5

Warranty costs incurred ( 36 ) ( 68 )

Ending balance $ 275 $ 473

FAIR VALUE MEASUREMENTS

Cash and cash equivalents include cash in banks and highly liquid investments with maturities of three months or less recorded in “Cash and cash equivalents” on the Consolidated Balance Sheets .

Short-term investments are available-for-sale debt securities and term deposits with maturities over three and up to twelve months recorded in “Short-term investments” on the Consolidated Balance Sheets .

The Company’s available-for-sale debt securities are measured at fair value with unrealized gains and losses recorded in “Other comprehensive (loss) income” on the Consolidated Statements of Comprehensive Loss with reclassification to net loss upon maturity or sale of the security.

Cash and cash equivalents include cash in banks, highly liquid investments, and term deposits with maturities of three months or less recorded in “Cash and cash equivalents” on the Consolidated Balance Sheets .

Short-term investments are available-for-sale debt securities and term deposits with maturities over three months recorded in “Short-term investments” on the Consolidated Balance Sheets .

As the Company views these securities as available to support current operations, highly liquid securities with maturities beyond 12 months are classified as current assets.

The Company’s available-for-sale debt securities are measured at fair value with unrealized gains and losses recorded in “Other comprehensive (loss) income” in the Consolidated Statements of Comprehensive Loss and reclassified to net loss upon maturity or sale of the security.

Term deposits are recorded at cost, which approximates fair value due to their short time to maturity.

Interest receivable on cash equivalents and short-term investments is recorded in “Other current assets” on the Consolidated Balance Sheets and was not material of December 31, 2022 and 2023.

Cash and cash equivalents that are restricted as to withdrawal or use under the terms of certain contractual agreements are classified as restricted cash and are recorded primarily in “Other non-current assets” on the Company’s Consolidated Balance Sheets .

Total restricted cash was $ 531 million and $ 0 as of December 31, 2022 and 2023, respectively.

Restricted cash consisted of the balance of an account under the dominion and control of the administrative agent under the ABL Facility.

In April 2023, all of the Company’s restricted cash associated with the ABL Facility was released due to expanded assets in the borrowing base in conjunction with the ABL Facility amendment.

See Note 8 “Debt” for more information on the ABL Facility.

Interest receivable on cash

RIVIAN AUTOMOTIVE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

equivalents and short-term investments is recorded in “Other current assets” on the Consolidated Balance Sheets and was not material of December 31, 2023 and 2024.

A three-level valuation hierarchy, based upon observable and unobservable inputs, is used for fair value measurements.

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United States Treasury securities 1 25 1 60

Certificates of deposit 1 150 —

Other items 1

Total cash and cash equivalents $ 7,857 $ 5,294

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Term deposits 2 450 2 475

Commercial paper — — 2 378

Corporate bonds — — 2 374

Certificates of deposit — — 2 141

Other items 2

Total short-term investments 3

$ 1,511 $ 2,406

Total cash and cash equivalents and short-term investments $ 9,368 $ 7,700

1 Includes certificates of deposit, corporate bonds, and yankee bonds.

2 Includes yankee bonds and agency discount notes.

3 As of December 31, 2024, $ 289 million is due between 12 and 18 months.

As of December 31, 2023 and 2024, the fair value of cash equivalents and short-term investments approximated their cost.

Fair value measurements classified within Level 2 of the fair value hierarchy are determined using observable inputs other than quoted prices for identical assets in active markets.

Refer to Note 2 “Summary of Significant Accounting Policies” and Note 10 "Debt" for more information about the fair value of the Company’s derivative instruments and debt, respectively.

RIVIAN AUTOMOTIVE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Refer to Note 2 “Summary of Significant Accounting Policies” and Note 8 "Debt" for more information about the fair value of the Company’s derivative instruments and debt, respectively.

INVENTORY AND INVENTORY VALUATION

Inventory is stated at the LCNRV and consists of raw materials, work in progress, finished goods, and service parts.

The Company primarily calculates inventory value using standard cost, which approximates actual cost on the first-in, first-out (“FIFO”) basis.

Inventory is stated at the lower of cost or net realizable value (“LCNRV”) and consists of raw materials, work in progress, finished goods, and service parts.

The Company primarily calculates the carrying value of inventory using standard cost, which approximates actual cost on the first-in, first-out (“FIFO”) basis.

NRV is the estimated selling price of inventory in the ordinary course of business, less estimated costs of completion.

The Company assesses the valuation of inventory and periodically adjusts its value for estimated excess and obsolete inventory based upon expectations of future demand and market conditions, as well as damaged or otherwise impaired goods.

The Company assesses the valuation of inventory and periodically adjusts its carrying value for estimated excess and obsolete inventory based upon expectations of future demand and market conditions, as well as damaged or otherwise impaired goods.

The following table summarizes the components of “Inventory” on the Consolidated Balance Sheets (in millions):

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Total inventory $ 2,620 $ 2,248

The balance of the Company’s inventory was written down by $ 582 million and $ 319 million from its cost to its NRV as of December 31, 2022 and 2023, respectively.

Additionally, the Company has a liability for LCNRV losses related to firm purchase commitments which were $ 338 million and $ 126 million as of December 31, 2022 and 2023, respectively, and are reflected in the “Inventory” component of “Accrued liabilities” on the Consolidated Balance Sheets .

The carrying value of the Company’s inventory was written down by $ 319 million and $ 66 million from its cost to its NRV as of December 31, 2023 and 2024, respectively.

Additionally, the Company has a liability for LCNRV losses related to firm purchase commitments of $ 126 million and $ 5 million as of December 31, 2023 and 2024, respectively, which is reflected in the “Inventory” component of “Accrued liabilities” on the Consolidated Balance Sheets .

Refer to Note 11 "Accrued Liabilities" for more information about Accrued liabilities.

The impact of inventory LCNRV write-downs and the change in liability for LCNRV losses on firm purchase commitments was $ 95 million, $ 920 million, and $ 107 million during the years ended December 31, 2021, 2022, and 2023, respectively, and is recorded in “Cost of revenues” in the Company’s Consolidated Statements of Operations .

The net impact of LCNRV write-downs and the change in accrued liabilities for losses on firm purchase commitments was $ 920 million and $ 107 million during the years ended December 31, 2022 and 2023, respectively, and recorded in automotive cost of revenues in the Consolidated Statements of Operations .

Because the $ 121 million year-over-year decrease in losses on firm purchase commitments exceeded the $ 66 million LCNRV write-down on the carrying value of inventory as of December 31, 2024, the Company did not have a net non-cash loss for inventory LCNRV write-downs and losses on firm purchase commitments during the year ended December 31, 2024;

that is, the net loss for inventory LCNRV write-downs and losses on firm purchase commitments was realized into cash losses.

RIVIAN AUTOMOTIVE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

PROPERTY, PLANT, AND EQUIPMENT, NET

Property, plant, and equipment are recorded at cost, net of accumulated depreciation and impairments.

Costs of routine maintenance and repair are expensed when incurred.

Costs of routine maintenance and repair are recognized as expenses when incurred.

The Company capitalizes certain qualified costs incurred in connection with the development of software used internally.

Costs incurred during the application development stage are evaluated to determine whether the costs meet the criteria for capitalization.

Costs related to preliminary project activities and post implementation activities that are not incremental upgrades, including maintenance, are expensed as incurred.

Costs related to preliminary project activities and post implementation activities that are not incremental upgrades, including maintenance, are recognized as expenses as incurred.

Property, plant, and equipment are primarily depreciated using the straight-line method over the estimated useful life of the asset.

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Land, buildings, and building improvements 10 to 30 years

$ 972 $ 1,085

Leasehold improvements Shorter of 10 years or lease term

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Total property, plant, and equipment, net $ 3,874 $ 3,965

RIVIAN AUTOMOTIVE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Depreciation and amortization expense was $ 197 million, $ 647 million, and $ 917 million for the years ended December 31, 2021, 2022 and 2023, respectively.

The Company leases real estate, machinery, equipment, and vehicles under agreements with contractual periods ranging from 1 month to 24 years.

Depreciation and amortization expense for property, plant, and equipment was $ 647 million, $ 917 million, and $ 1,000 million for the years ended December 31, 2022, 2023 and 2024, respectively.

The Company leases real estate, machinery, equipment, and vehicles under agreements with contractual periods ranging from approximately 1 month to 24 years.

Leases generally contain extension or renewal options, and some leases contain termination options.

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Right-of-use assets are measured at the amount of the lease liability, adjusted for prepaid or accrued lease payments, lease incentives, and initial direct costs incurred, as applicable.

Leases that are economically similar to the purchase of an asset are classified as finance leases.

The Company’s carrying value of finance leases is not material for the years ended December 31, 2021 and 2022.

The Company and the State of Georgia and the Joint Development Authority of Jasper County, Morgan County, Newton County and Walton County (“JDA”) entered into a development agreement in May 2022 to build the manufacturing facility near Atlanta, Georgia (“ Stanton Springs North Facility”).

In November 2023, the Company and the JDA entered into a rental agreement, a bond purchase agreement, and an option agreement (the “Project Agreements”) pursuant to which the JDA is leasing land to the Company in exchange for the Company making rent payments totaling $ 309 million over the lease term.

The noncancelable lease term is four years with automatic extensions reasonably certain to be utilized.

The lease expires in December 2047 unless earlier terminated per the terms of the agreement.

The lease is classified as a finance lease as the Company is reasonably certain to exercise the purchase option at expiration.

Under the Project Agreements, the Company is required to make capital expenditures in the project of at least $ 5 billion by December 31, 2030 in exchange for various development incentives, tax credits and exemptions, and government grants.

The Company, the State of Georgia, and the Joint Development Authority of Jasper County, Morgan County, Newton County and Walton County (“JDA”) entered into a development agreement in May 2022 to build the Stanton Springs North Facility.

In November 2023, the Company and the JDA entered into a rental agreement, a bond purchase agreement, and an option agreement, pursuant to which the JDA is leasing land to the Company in exchange for the Company making rent payments

RIVIAN AUTOMOTIVE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

totaling $ 309 million over the lease term.

The noncancelable lease term is four years , with automatic extensions that are reasonably certain to be utilized.

The lease expires in December 2047 unless earlier terminated per the terms of the agreements.

The lease is classified as a finance lease as the Company is reasonably certain to exercise a purchase option at expiration.

Lease expense for operating leases is comprised of rent expense recognized on a straight-line basis over the lease term and amortization of right-of-use assets recognized as the difference between rent expense and imputed interest on the liability using the effective interest method.

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Instead, expense representing the rent payments is recognized on a straight-line basis over the lease term.

RIVIAN AUTOMOTIVE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Lease assets are recorded net of accumulated amortization.

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Operating lease assets, net $ 356 $ 416

Current portion of lease liabilities and other current liabilities $ 68 $ 85

Long-term lease liabilities 311 324

Current portion of deferred revenues, lease liabilities, and other liabilities $ 85 $ 98

Non-current lease liabilities 324 379

Total operating lease liabilities $ 409 $ 477

Finance Leases December 31, 2023

Finance Leases December 31, 2023 December 31, 2024

Property, plant, and equipment, net $ 76 $ 82

Current portion of lease liabilities and other current liabilities $ 3

Current portion of deferred revenues, lease liabilities, and other liabilities $ 3 $ 2

Other non-current liabilities 76 85

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Total lease liabilities $ 477 $ 87

RIVIAN AUTOMOTIVE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The future minimum lease payments for operating and finance leases that have not yet commenced are not material.

The leases will commence in 2025 and 2026 with lease terms ranging from 5 to 10 years.

Total lease cost for the year ended December 31, 2021 was no t material.

Total lease cost for the years ended December 31, 2022 and 2023 was $ 86 million and $ 134 million, respectively, was comprised primarily of operating lease cost and recorded in “Selling, general, and administrative”, “Research and development”, and “Cost of revenues” in the Consolidated Statements of Operations .

Total lease cost for the years ended December 31, 2022, 2023 and 2024 was $ 86 million, $ 134 million, and $ 180 million, respectively, comprised primarily of operating lease cost, and recorded in “Selling, general, and administrative”, “Research and development”, and “Cost of revenues” in the Consolidated Statements of Operations .

The weighted average remaining lease term and weighted average discount rate for leases were as follows:

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Weighted average finance lease discount rate Not material 10.7 % 11.4 %

RIVIAN AUTOMOTIVE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Supplemental cash flow information related to leases is as follows (in millions):

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(in millions) Effective Interest Rate

Long-term debt

2026 Notes 2026 $ 1,250 12.0 % $ 1,250 11.0 %

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Long-term debt, less unamortized discount and debt issuance costs $ 4,431 $ 4,441

Current portion — —

Total long-term debt, less current portion $ 1,231 $ 4,431

Term Facility

In April 2018, the Company entered into a variable rate Term Facility Agreement for a committed facility to be used towards the Company’s operating expenses and capital expenditures (“Term Facility”).

In February 2021, the Company paid all outstanding amounts related to the Term Facility.

Interest on the Term Facility was paid based on LIBOR plus 4.3 %.

The Company’s obligations under the Term Facility were backed by guarantees, including from an affiliate of a stockholder of the Company.

In connection with the Term Facility Agreement, the Company issued common stock warrants to the affiliate of the stockholder on the date thereof.

The common stock warrants were classified as a debt issuance cost, recorded as an increase to Additional paid-in capital, and subsequently amortized over the periods the Term Facility was outstanding.

2021 Convertible Notes

In July 2021, the Company issued $ 2,500 million aggregate principal amount of unsecured senior convertible promissory notes due July 2026 in a private offering (“2021 Convertible Notes”) and made an irrevocable election to account for the 2021 Convertible Notes under the Fair Value Option in accordance with Accounting Standards Codification Topic 825, Financial Instruments.

As a result, the 2021 Convertible Notes were initially recognized as a liability measured at issue-date estimated fair value and subsequently re-measured to estimated fair value as of September 30, 2021.

The 2021 Convertible Notes accrued interest quarterly at a rate of (i) zero percent ( 0 %) from the date of issuance to, and including, June 30, 2022 and (ii) five percent ( 5 %) after June 30, 2022.

The Company made no interest payments on the 2021 Convertible Notes during the year ended December 31, 2021.

Upon the Company’s IPO, the 2021 Convertible Notes converted into 38 million shares of Class A common stock at a conversion price equal to $ 66.30 per share.

During the year ended December 31, 2021, the loss on the 2021 Convertible

In May 2021, the Company entered into an ABL Facility with a syndicate of banks that may be used for general corporate purposes, maturing April 2028 (unless due earlier pending the maturity of certain debt exceeding $ 200 million).

The $ 1,500 million revolving commitment of the facility has an annual interest rate between 1.25 % and 1.75 %, plus the daily Secured Overnight Financing Rate (“SOFR”), plus a credit spread adjustment of 0.10 %, subject to a 0.00 % floor.

In addition, the Company is required to pay a quarterly commitment fee between 0.20 % and 0.25 % per annum based on the unused portion of the ABL Facility.

Availability under the ABL Facility is based on the lesser of the borrowing base and the committed $ 1,500 million cap and is reduced by borrowings and the issuance of letters of credit, with a letter of credit sub-limit of $ 1,000 million.

In April 2023, all the restricted cash associated with the ABL Facility was released.

The ABL Facility is secured by certain assets of the Company and contains certain affirmative and negative covenants and conditions to borrowing or taking other actions that restrict certain of the Company’s subsidiaries’ ability to, among other things, incur debt, grant liens, make investments, enter into certain transactions with affiliates, pay dividends, and prepay junior or unsecured

RIVIAN AUTOMOTIVE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Notes was recognized in “Loss on convertible notes, net” in the Consolidated Statement of Operations and was calculated as follows (in millions):

Year Ended December 31, 2021

Fair value of shares issued upon conversion Unpaid principal balance

Loss on convertible notes, net

2021 Convertible Notes $ 2,941 $ 2,500 $ ( 441 )

In May 2021, the Company entered into an ABL Facility with a syndicate of banks that may be used for general corporate purposes.

In April 2023, the Company amended and restated the credit agreement governing the ABL Facility which extended the maturity date to April 2028 (unless due earlier pending the maturity of certain debt exceeding $ 200 million).

The revolving commitment of the facility doubled to $ 1,500 million and has an annual interest rate between 1.25 % and 1.75 %, plus daily Secured Overnight Financing Rate (“SOFR”), plus 0.10 % credit spread adjustment, subject to a 0.00 % floor.

In addition, the Company is required to pay a quarterly commitment fee between 0.20 % and 0.25 % per annum based on the unused portion of the ABL Facility.

Availability under the ABL Facility is based on the lesser of the borrowing base and the committed $ 1,500 million cap and is reduced by borrowings and the issuance of letters of credit.

The letter of credit sub-limit increased from $ 500 million to $ 1,000 million and the eligibility of assets in the borrowing base expanded allowing for the release of all restricted cash associated with the ABL Facility.

indebtedness, subject to certain exceptions.

The covenants include a minimum liquidity requirement and fixed charge coverage ratio calculated quarterly.

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In March 2023, the Company issued $ 1,500 million principal amount of the 2029 Green Convertible Notes at a discount of $ 15 million in a private offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act.

The 2029 Green Convertible Notes were issued pursuant to, and are governed by, an indenture dated March 10, 2023, between the

RIVIAN AUTOMOTIVE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Company and U.S.

Bank Trust Company, National Association.

The 2029 Green Convertible Notes accrue interest at a rate of 4.625 % per annum, payable semi-annually in arrears on March 15 and September 15 .

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The 2029 Green Convertible Notes contain a number of customary covenants.

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The 2029 Green Convertible Notes are classified within Level 2 of the fair value hierarchy because they are valued using quoted prices for identical assets in markets that are not active.

As of December 31, 2023, the fair value of the 2029 Green Convertible Notes was $ 2,110 million.

As of December 31, 2023 and 2024, the fair value of the 2029 Green Convertible Notes was $ 2,110 million and $ 1,591 million, respectively.

2030 Green Convertible Notes

In October 2023, the Company issued $ 1,725 million principal amount of the 2030 Green Convertible Notes at a discount of $ 15 million in a private offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act.

The 2030 Green Convertible Notes were issued pursuant to, and are governed by, an indenture dated October 11, 2023, between the Company and U.S.

Bank Trust Company, National Association.

The 2030 Green Convertible Notes accrue interest at a rate of 3.625 % per annum, payable semi-annually in arrears on April 15 and October 15.

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The 2030 Green Convertible Notes contain a number of customary covenants.

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The 2030 Green Convertible Notes are classified within Level 2 of the fair value hierarchy because they are valued using quoted prices for identical assets in markets that are not active.

As of December 31, 2023, the fair value of the 2030 Green Convertible Notes was $ 2,121 million.

As of December 31, 2023 and 2024, the fair value of the 2030 Green Convertible Notes was $ 2,121 million and $ 1,611 million, respectively.

The Company intends to use the net proceeds from the 2029 Green Convertible Notes and 2030 Green Convertible Notes (together the “Green Convertible Notes”) to finance, refinance, or make direct investments in, in whole or in part, one or more new or existing eligible green projects, as described in the Company’s green financing framework.

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The Capped Calls cover, subject to customary anti-dilution adjustments, the aggregate number of shares of the Company’s Class A common stock that initially underlie the 2030 Green Convertible Notes, and are expected generally to reduce potential dilution to the Company’s Class A common stock upon any conversion of the 2030 Green Convertible Notes and/or offset any cash payments the Company is required to make in excess of the principal amount of converted 2030 Green Convertible Notes, as the case may be, with such reduction and/or offset subject to a cap, based on the cap price of the Capped Calls.

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The Capped Calls are separate transactions entered into by the Company and the applicable counterparties, and are not part of the terms of the 2030 Green Convertible Notes, and do not affect any holder’s rights under the 2030 Green Convertible Notes or the indenture.

Holders of the 2030 Green Convertible Notes do not have any rights with respect to the Capped Calls.

As the Capped Calls are indexed to the Company’s own stock and qualified for equity classification, they were not accounted for as derivatives and were recorded as a reduction of the Company’s “Additional paid-in capital” on the C onsolidated B alance S heets and will not be remeasured.

As the Capped Calls are indexed to the Company’s own stock and qualified for equity classification, they were not accounted for as derivatives and were recorded as a reduction of the Company’s “Additional paid-in capital” on the Consolidated Balance Sheets and will not be remeasured.

2026 Convertible Note

In June 2024, the Company issued a $ 1,000 million principal amount unsecured convertible promissory note due June 2026 (“2026 Convertible Note”) in a private placement pursuant to, and governed by, a convertible promissory note purchase agreement dated June 25, 2024, between the Company and Volkswagen International America Inc (“Volkswagen Group”).

The 2026 Convertible Note accrued interest at 4.75 % per annum, payable semi-annually in arrears on June 15 and December 15.

As the Company elected not to pay accrued interest in cash, such accrued interest was capitalized to the unpaid principal balance.

The 2026 Convertible Note converted into shares of the Company’s Class A common stock in December 2024.

Half of the then outstanding principal amount converted at a price of $ 10.8359 per share, and the remaining half converted at a price of $ 10.5733 per share, based on the Company’s 45 -trading day volume-weighted average price prior to the conversion date.

The 2026 Convertible Note was eligible for prepayment and contained a number of affirmative and restrictive covenants.

Upon issuance, the Company made an irrevocable election to account for the 2026 Convertible Note as a single hybrid instrument under the Fair Value Option (“FVO”).

Under the FVO, the 2026 Convertible Note was initially recognized as a liability measured at issue-date estimated fair value and subsequently re-measured at estimated fair value on a recurring basis at each reporting date prior to conversion with the change in fair value recognized in “Fair value gain (loss) on convertible note, net” in the Consolidated Statements of Operations .

Interest was accrued in “Interest expense” in the Consolidated Statements of Operations .

During the year ended December 31, 2024, the gain/(loss) on the 2026 Convertible Note was recognized in “Loss on convertible notes, net” in the Consolidated Statements of Operations and was calculated as follows (in millions):

Year Ended December 31, 2024

Fair value of shares issued upon conversion $ 1,133

Unpaid principal balance plus accrued interest 1,021

Loss on conversion $ 112

Interest Expense

“Interest expense” recorded in the Consolidated Statements of Operations was primarily contractual interest expense.

“Interest expense” recorded in the Consolidated Statements of Operations during the year ended December 31, 2024 was primarily contractual interest expense.

Volkswagen Group Loan Commitment

In conjunction with the formation of the Joint Venture, the Company, together with Joint Venture Equityholder, and Volkswagen Group also entered into Loan Agreements providing for a committed $ 1,000 million term loan facility, available to the Joint Venture in a single draw on any business day during the period beginning on October 1, 2026 and ending on October 30, 2026, subject to customary conditions to funding.

When and if funded, the proceeds would be concurrently loaned by the Joint Venture to the Joint Venture Equityholder to be used by the Company for general corporate purposes.

The Company’s loan would mature on the tenth anniversary of the funding date.

Beginning on the third anniversary of the funding date, $ 100 million of principal would be repaid each year in biannual installments of $ 50 million, with the balance of the principal amount due on the final maturity date.

The loan may be prepaid at any time, in whole or in part, without any

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

prepayment premium or penalty.

Interest on the loan will accrue at a fixed rate per annum that is determined at the time of funding.

The per annum rate will be equal to (a) the interpolated all-in yield for United States dollar-denominated debt securities of Volkswagen International America, Inc., Volkswagen AG, and their affiliates, having a maturity of seven years on date of determination, plus (b) 25 basis points.

Interest on the loan will be paid on a semi-annual basis, except that the first interest payment will be due on the second anniversary of the funding date.

If and when funded, the per annum rate of interest on the loan is expected to be lower than a loan with comparable terms funded by a large financial institution.

Accordingly, upon execution of the Loan Agreements, the $ 201 million fair value of the below-market funding commitment was included within Other non-current assets and Other non-current liabilities on the Consolidated Balance Sheets , as noncash consideration in the form of an advance payment for the services provided by the Joint Venture to develop, customize, and enhance Rivian’s existing vehicle electrical architecture and software technology for use in the customer’s future vehicle programs.

See Note 4 "Revenues" for more information.

If and when funded, the fair value of the below-market funding commitment will be recognized as “Interest expense” in the Consolidated Statements of Operations over the term of the loan.

The below-market funding commitment is classified within Level 3 of the fair value hierarchy because it is valued using a discounted cash flow model containing unobservable inputs, including estimated yield curves applicable to both parties.

Department of Energy Loan

On January 16, 2025, Rivian New Horizon, LLC (the “Borrower”) and Rivian Automotive, Inc.

(the “Sponsor”) entered into a Loan Arrangement and Reimbursement and Sponsor Support Agreement (the “LARSSA”) with the United States DOE, pursuant to which the DOE has agreed to arrange a multi-draw term loan facility, comprised of two tranches, with the first tranche aggregate principal amount of up to approximately $ 3,355 million (the “Note A Loan”) and the second tranche aggregate principal amount of up to approximately $ 2,620 million (the “Note B Loan”, and together with the Note A Loan, the “DOE Loan”), to be provided by the FFB to the Borrower under DOE’s Advanced Technology Vehicles Manufacturing Program (the “ATVM Program”).

The proceeds from advances under the DOE Loan will be used to support the development of the Stanton Springs North Facility, which will be built in two production capacity blocks (the “Project”).

The Borrower may request advances under the DOE Loan for purposes of funding certain eligible Project costs, subject to the Borrower’s satisfaction of the conditions under the Loan tranche that is designated for the relevant Block.

Such conditions include the Sponsor maintaining positive gross margin for certain periods prior to the first Note A Advance, the Borrower achieving certain vehicle sales metrics prior to the first Note A Advance and first Note B Advance, making of required base equity contributions to fund certain Project costs, the granting to DOE of security over, among other things, Project assets and the execution of related security documents, the Borrower’s entry into agreements necessary for the development, design, engineering, construction and operation of the Project, delivery of a Project execution plan, and a bring-down of representations and warranties.

Note A Advances may be requested, upon the satisfaction of certain conditions, from January 16, 2025 through April 16, 2031, and the loans comprised of Note A Advances will mature on March 15, 2045 (the “Note A Maturity Date”).

The principal amount of the Note A Advances will be payable in quarterly installments commencing on March 15, 2031, through the Note A Maturity Date.

Interest payments on the Note A Advances will begin on June 15, 2030, and will be payable quarterly in arrears.

Note B Advances may be requested, upon the satisfaction of certain conditions, from January 16, 2025 through May 15, 2032, and the loans comprised of Note B Advances will mature on June 15, 2041 (the “Note B Maturity Date”).

The principal amount of the Note B Advances will be payable in quarterly installments commencing on June 15, 2032, through the Note B Maturity Date.

Interest payments on the Note B Advances will begin on June 15, 2032, and will be payable quarterly in arrears.

The interest rate associated with an ATVM Program loan is equal to the United States Treasury-equivalent yield curve with 0 % credit spread, set at each advance.

The LARSSA contains representations and warranties, as well as informational, affirmative, and negative covenants that include, among others, requirements with respect to the construction and operation of the Project, compliance with all requirements of the ATVM Program, and limitations on the ability to incur indebtedness, incur liens, make investments or loans, enter into mergers or acquisitions, dispose of assets (including intellectual property with respect to the Project), pay dividends or make distributions on capital stock, prepay indebtedness, pay management, advisory or similar fees to affiliates, enter into certain material agreements and affiliate transactions, enter into new lines of business or enter into certain restrictive agreements.

Certain covenants apply starting on the date that the LARSSA is signed, while other covenants,

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

including certain of the negative covenants, do not apply until the date of the first Note A Advance.

The LARSSA also contains customary events of default, as well as customary notice periods and remedies with respect to the occurrence of an event of default.

Inter-creditor agreements must be executed, and the terms of the ABL Facility and the 2026 Notes must be amended and/or refinanced in order for the Company to access the funds from this loan.

ACCRUED LIABILITIES

The carrying value of “Accrued liabilities” on the Consolidated Balance Sheets included the following components (in millions):

The carrying value of “Accrued liabilities” on the Consolidated Balance Sheets includes the following components (in millions):

December 31, 2023 December 31, 2024

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Other products and services 169 93

Other 144 150

Total accrued liabilities $ 1,145 $ 835

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During the years ended December 31, 2022, 2023 and 2024, certain restructuring actions occurred in order to reduce costs and improve efficiency.

As a result, $ 39 million , $ 38 million, and $ 48 million of severance expenses were recognized during the years ended December 31, 2022, 2023 and 2024, respectively.

Accrued liabilities for severance expenses were not material as of December 31, 2024.

Components of Income Taxes

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The Company measures deferred tax assets and liabilities using enacted tax rates that will apply in the years in which the temporary differences are expected to be recovered or paid.

In determining whether a valuation allowance is needed, the Company considers all available evidence, both positive and negative.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In determining whether a valuation allowance is needed, all available evidence is considered, both positive and negative.

If, based on the weight of available evidence, it is more likely than not that the deferred tax assets will not be realized, a valuation allowance is recorded.

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The Company continues to monitor the realizability of the United States deferred tax assets considering multiple factors, including results of operations.

The Company shall continue maintaining a full valuation allowance on United States deferred tax assets until there is sufficient evidence to support the reversal of all or some portion of these allowances.

Release of all, or a portion, of the valuation allowances would result in the recognition of certain deferred tax assets and a decrease to income tax expense for the period the release is recorded.

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A full valuation allowance on United States deferred tax assets will be maintained until there is sufficient evidence to support the reversal of all or some portion of the allowance.

Release of all, or a portion, of the valuation allowance would result in the recognition of certain deferred tax assets and a decrease to income tax expense for the period the release is recorded.

A reconciliation of the provision for income taxes to its components at the United States statutory rate is shown below (in millions):

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Permanent items 5 ( 5 ) 17

Nondeductible charitable contributions 172 — —

Nondeductible loss on convertible debt 118 — —

Nondeductible stock-based compensation and 162(m) Limitation 70 63 74

Tax credits ( 264 ) ( 202 ) ( 177 )

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Provision for income taxes $ 4 $ 1 $ 5

*The prior periods have been recast to conform to current period presentation.

The Company’s effective tax rate was 0 % for the years ended December 31, 2022, 2023 and 2024.

Provision for income taxes relates to current taxes on foreign operations for the years ended December 31, 2021, 2022 and 2023.

Provision for income taxes relates primarily to current taxes on foreign operations for the years ended December 31, 2022, 2023 and 2024.

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Components of Deferred Tax Assets and Liabilities

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Accrued liabilities 81 142

R&D capitalization 369 804

Research and development capitalization 804 925

Total deferred tax assets 5,047 6,486

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Operating lease assets ( 86 ) ( 103 )

Loan commitment asset — ( 51 )

Other ( 1 ) ( 29 )

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Additionally, the Company has $ 12,637 million of carryforwards for state NOLs.

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Under Sections 382 and 383 of the Internal Revenue Code of 1986 (“Code”), if a corporation undergoes an “ownership change,” the corporation’s ability to use its pre-change net operating loss carryforwards and other pre-change tax attributes (such as R&D tax credits) to offset its post-change income may be limited.

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The Company records uncertain tax positions using a two-step process.

by determining whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position, and second;

First, by determining whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position;

for those tax positions that meet the more-likely-than-not recognition threshold, by recognizing the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority.

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The Company had no accrued interest or penalties as of December 31, 2023 and 2024.

The Company’s unrecognized tax benefits related to the Company’s United States R&D tax credit.

Because a full valuation allowance is maintained in the United States, there is no impact to the consolidated balance sheet and, if recognized, no ne of the unrecognized tax benefit would impact the Company’s effective tax rate.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Company’s unrecognized tax benefits relate to the Company’s United States R&D tax credit.

Because a full valuation allowance is maintained in the United States, there is no impact to the Consolidated Balance Sheets , and if recognized, none of the unrecognized tax benefit would impact the Company’s effective tax rate.

The Company had the following activity related to unrecognized tax benefits (in millions):

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As of December 31, 2024, 56 million and 161 million shares were reserved for issuance under the 2015 Stock Plan and 2021 Stock Plan, respectively.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Generally, the Company’s stock options vest in annual installments based on a requisite service period of four years of continuous service and may contain performance conditions related to production and other targets.

RSUs generally vest in quarterly installments based on a requisite service period of 2 to 4 years of continuous service.

Expense is recognized on an accelerated basis for awards granted prior to the IPO due to the IPO as a performance condition.

Generally, the Company’s RSUs vest in quarterly installments based on a requisite service period of 2 to 4 years of continuous service.

Stock options generally vest in annual installments based on a requisite service period of four years of continuous service.

RSUs and options may contain performance conditions related to production and other targets.

Expense is recognized on an accelerated basis for awards granted prior to the Company's November 2021 initial public offering (“IPO”) as the IPO was a performance condition.

For awards granted after the IPO, the Company has elected to use the straight-line expense recognition on awards with only service conditions.

In January 2021, the Company granted a stock option covering 27 million shares valued at $ 241 million to its CEO.

A portion of the stock option contains only a service condition, which vests over a requisite service period of six years following the IPO.

The other portion of the stock option contains both a service and a market condition, which vests in installments based on the achievement of share price goals following the IPO, measured over a specified period ending on the 10th anniversary of the award.

During June 2021, the Company modified the service-based vesting terms of approximately 17 million RSUs.

As achievement of the performance condition of the RSUs was not considered probable both before and after the modification, the fair value of the RSUs was remeasured on the date of modification, which resulted in an increase in unrecognized stock-based compensation cost of approximately $ 322 million.

During October 2021, the Company modified the service-based vesting terms of approximately 5 million stock options.

As achievement of the performance condition of the stock options was not considered probable both before and after the modification, the fair value of the stock options was remeasured on the date of modification, which resulted in an increase in unrecognized stock-based compensation cost of approximately $ 275 million.

Starting in the year ended December 31, 2022, the Company approved the payment of bonus incentives to be made under the 2021 Stock Plan in the form of stock-based awards, which vest immediately upon grant in the first quarter of each year.

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Refer to Note 11 "Accrued Liabilities" for more information about Accrued liabilities.

The following table summarizes the Company’s stock option and restricted stock unit activity during the year ended December 31, 2023:

Stock Options RSUs

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table summarizes the Company’s restricted stock unit and stock option activity during the year ended December 31, 2024:

RSUs Stock Options

Number of Shares

(in millions) Weighted-Average Grant-Date Fair Value Number of Shares

(in millions) Weighted-Average Exercise Price Weighted-Average Remaining Contractual Life

(in years) Aggregate Intrinsic Value (in millions) Number of Shares

(in millions) Weighted-Average Grant-Date Fair Value

(in years) Aggregate Intrinsic Value (in millions)

Outstanding at December 31, 2023 56 $ 22.36 62 $ 13.49

Granted 78 10.50 2 11.13

Exercised / Vested ( 2 ) 4.53 ( 35 ) 23.80

Vested / Exercised ( 59 ) 16.12 ( 3 ) 3.87

Forfeited / Cancelled ( 14 ) 18.90 ( 1 ) 25.26

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Exercisable at December 31, 2024 — $ — 32 $ 7.14 4.1 $ 243

The weighted-average grant-date fair value of RSUs granted during the years ended December 31, 2022 and 2023 was $ 35.87 and $ 15.25 , respectively.

The total fair value of RSUs vested during the years ended December 31, 2022, 2023 and 2024 was $ 566 million , $ 630 million and $ 720 million, respectively.

The weighted-average grant-date fair value of stock options granted during the years ended December 31, 2022, 2023 and 2024 was $ 21.64 , $ 10.49 , and $ 6.91 , respectively.

The aggregate intrinsic value of stock options exercised during the years ended December 31, 2022, 2023 and 2024 was $ 105 million, $ 29 million, and $ 28 million, respectively.

The weighted-average grant-date fair value of RSUs granted during the years ended December 31, 2021 and 2022 was $ 43.94 and $ 35.87 , respectively.

There were no RSUs vested during the year ended December 31, 2021.

The total fair value of RSUs vested during the years ended December 31, 2022 and 2023 was $ 566 million and $ 630 million, respectively.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table summarizes Company’s stock-based compensation expense for the Stock Plans and 2021 Employee Stock Purchase Plan (“ESPP”) by line item in the Consolidated Statements of Operations (in millions):

The weighted-average grant-date fair value of stock options outstanding at December 31, 2023 and 2024 was $ 9.94 and $ 10.05 , respectively.

The weighted-average grant-date fair value of stock options exercisable at December 31, 2024 was $ 11.16 .

The following table summarizes the Company’s stock-based compensation expense for the Stock Plans and 2021 Employee Stock Purchase Plan (“ESPP”) by line item in the Consolidated Statements of Operations (in millions):

Years Ended December 31,

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As of December 31, 2024, the Company’s unrecognized stock-based compensation expense for unvested awards was approximately $ 858 million, which is expected to be recognized over a weighted-average period of 5.0 years for stock options and 1.8 years for RSUs.

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Fair Value Assumptions

The fair value of the stock options granted to the CEO in January 2021 was estimated using a Monte Carlo simulation capturing scenarios of the Company's projected stock price over the ten-year time horizon, with the resulting intrinsic value at maturity of the stock options in each scenario discounted to present value.

The assumptions used in the Monte Carlo simulation were as follows:

Year Ended December 31, 2021

Volatility 50.0 %

Dividend yield — %

Risk-free rate 1.1 %

Maturity (in years) 10.0

Initial stock price $ 21.72

The exercise price of all stock options granted during the years ended December 31, 2022, 2023 and 2024 was equal to or greater than the fair market value of Rivian's stock at the date of grant.

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The expected term represents the average time the Company’s stock options are expected to be outstanding.

As the stock options were not exercisable prior to the IPO, the Company does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate expected term.

As a result, for stock options, the expected term is estimated based on the weighted-average midpoint of expected vest date and expiration date.

As the Company’s stock options were not exercisable prior to the IPO in November 2021, there is not sufficient historical exercise data to provide a reasonable basis upon which to estimate expected term.

As a result, the expected term is estimated based on the weighted-average midpoint of expected vest date and expiration date.

The weighted-average assumptions used in the Black-Scholes option pricing model for stock options granted were as follows:

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Expected term (in years) 6.8 6.3 6.3

Prior to the Company’s IPO, the stock price input to the estimated fair value of stock options and the fair value of RSUs was measured on the grant date (or modification date, if appropriate) based on an independent appraisal of the fair market value of the Company’s common stock.

The independent appraisal used a market approach with an adjustment for lack of

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

marketability given that the shares underlying the awards were not publicly traded.

This assessment required complex and subjective judgments regarding the Company’s projected financial results.

The appraisal incorporated a backsolve method to the Company’s most recent equity issuance and a probability-weighted expected return method “(PWERM)” that estimated equity value in an IPO scenario.

The fair value of a share of the Company’s common stock was estimated by weighting the backsolve and PWERM valuation methods based on the anticipated probability of an IPO as of each valuation date.

In light of initial information received in estimation of the Company’s IPO price range and the proximity of stock-based awards granted from July 20, 2021 to the IPO, the Company established the fair value of a share of the Company’s common stock applicable to stock options and RSUs granted from July 20, 2021 onward using a straight-line interpolation from the July 20, 2021 fair value estimated using an independent appraisal to the midpoint of the initial price range in order to calculate unrecognized stock-based compensation expense.

The grant-date fair value of RSUs granted after the IPO is equal to the closing trading price of the Company‘s common stock on the grant date .

The grant-date fair value of RSUs is equal to the closing trading price of the Company‘s common stock on the grant date.

Employee Stock Purchase Plan

In November 2021, the Company adopted the ESPP.

The ESPP is designed to allow eligible employees to purchase shares of Class A common stock at a 15 % discount, generally at intervals of approximately six months , with their accumulated payroll deductions.

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RELATED PARTY TRANSACTIONS

Stock Warrants

In February 2019, the Company entered into a commercial letter agreement with Amazon.com, Inc.

and its affiliates (“Amazon”), and in September 2019, the Company entered into a related framework agreement with Amazon Logistics, Inc.

(“Logistics”).

The Company refers to these agreements, together with any work orders, purchase orders, related agreements, and amendments thereunder or thereto, collectively, as the “EDV Agreement.” Under the EDV Agreement, the Company and Logistics have agreed to collaborate to design, develop, manufacture, and supply EDVs and/or certain component parts and related services for use in Amazon’s last mile delivery operations.

In connection with the EDV Agreement, the Company provided a share-based sales incentive to Amazon, a principal stockholder, in the form of warrants to purchase preferred stock.

These were converted to warrants to purchase an equivalent number of shares of Class A common stock upon the close of the Company’s IPO.

The carrying value of the warrants was not material as of December 31, 2022 and 2023 and is amortized as an offset against revenues as Electric Delivery Vans (“EDVs”) are sold.

The offset against revenues for the years ended December 31, 2022 and 2023 was not material.

2021 Convertible Notes

In July 2021, the Company issued the 2021 Convertible Notes to principal stockholders of the Company at that time, including:

Amazon with $ 490 million principal amount, Ford Motor Company (“Ford”) with $ 415 million principal amount, and certain funds and accounts advised by T.

The 2026 Notes were issued to certain new and existing principal stockholders, including T.

Rowe Price Associates, Inc.

Rowe Price”) with an aggregate $ 400 million principal amount.

Upon the Company’s IPO, the 2021 Convertible Notes converted into 38 million shares of Class A common stock at a conversion price equal to $ 66.30 per share (refer to Note 8 "Debt" for more information about the 2021 Convertible Notes).

Rowe Price”), with an aggregate $ 285 million principal amount (refer to Note 10 "Debt" for more information about the 2026 Notes).

Until May 2024, T.

Rowe Price was a principal stockholder and related party of the Company as a beneficial owner of more than 10 percent of the Company’s voting interests.

Rowe Price is no longer a related party.

Revenues and Stock Warrants

The Company recorded $ 343 million , $ 823 million, and $ 1,040 million in revenues from Amazon.com, Inc.

and its affiliates (“Amazon”) for the years ended December 31, 2022, 2023, and 2024 in the Consolidated Statements of Operations , primarily within the automotive segment and related to the sale of EDVs.

As of December 31, 2023 and 2024, the uncollected amounts related to these revenues in “Accounts receivable, net” on the Consolidated Balance Sheets were $ 6 million and $ 68 million,

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The 2026 Notes were issued to certain new and existing principal stockholders, including T.

Rowe Price with an aggregate $ 285 million principal amount (refer to Note 8 "Debt" for more information about the 2026 Notes).

The Company recorded $ 343 million and $ 823 million in revenues from Amazon for the years ended December 31, 2022 and 2023, within “Revenues” in the Consolidated Statements of Operations , primarily related to the sale of EDVs in accordance with the EDV Agreement.

As of December 31, 2022 and 2023, the uncollected amounts related to these revenues in “Accounts receivable, net” on the Consolidated Balance Sheets were $ 60 million and $ 6 million, respectively.

respectively.

As of December 31, 2023 and 2024, contract liabilities related to these revenues, primarily related to extended service contracts, were $ 72 million and $ 135 million, respectively.

Refer to Note 2 "Summary of Significant Accounting Policies" for more information about revenue.

Refer to Note 4 "Revenues" for more information.

The Company has provided a share-based sales incentive to Amazon in the form of warrants to purchase shares of Class A common stock.

The carrying value of the warrants was not material as of December 31, 2023 and 2024 and is amortized as an offset against revenues as EDVs are sold.

The offset against revenues for the years ended December 31, 2022, 2023, and 2024 was not material.

Operating Expenses

The Company obtained prototyping, engineering, and other R&D services from a wholly-owned subsidiary of Ford.

The Company obtained prototyping, engineering, and other R&D services from a wholly-owned subsidiary of Ford Motor Company (“Ford”).

Until May 2022, Ford was a principal stockholder and related party of the Company as a beneficial owner of more than 10 percent of the Company’s voting interests.

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The Company obtains data services, including hosting, storage, and compute from Amazon.

During the year ended December 31, 2021, expenses related to these services were no t material.

During the years ended December 31, 2022 and 2023, expenses related to these services of $ 60 million and $ 63 million, respectively, were recorded in “Research and development” and “Selling, general, and administrative” in the Consolidated Statements of Operations .

During the years ended December 31, 2022, 2023 and 2024, expenses related to these services of $ 60 million, $ 63 million, and $ 94 million, respectively, were recorded in “Research and development” and “Selling, general, and administrative” in the Consolidated Statements of Operations .

As of December 31, 2023 and 2024, the unpaid amounts related to these services were not material.

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STOCKHOLDERS’ EQUITY

Initial Public Offering

In November 2021, the Company completed its IPO of approximately 176 million shares of Class A common stock at a public offering price of $ 78.00 per share, which included the exercise in full by the underwriters of their option to purchase from the Company an additional 23 million shares of the Company’s Class A common stock.

The net proceeds to the Company from the IPO, after deducting underwriting discounts and commissions and estimated offering expenses payable by the Company, were $ 13,530 million.

Upon the close of the IPO, (i) 102 million shares of common stock outstanding converted into an equal number of shares of Class A common stock, (ii) 8 million shares of Class A common stock held by an affiliate of the Company’s CEO were exchanged for an equivalent number of shares of Class B common stock, (iii) all outstanding shares of contingently redeemable convertible preferred stock converted into an aggregate 576 million shares of Class A common stock, (iv) a warrant outstanding for the purchase of 4 million shares of Series C preferred stock, with an exercise price of $ 9.09 per share, converted to a warrant to purchase an equivalent number of shares of Class A common stock, (v) outstanding warrants to purchase fewer than 1 million shares of Class A common stock, with a weighted-average exercise price of $ 5.66 per share, terminated unexercised, and (vi) the 2021 Convertible Notes converted into 38 million shares of Class A common stock at a conversion price equal to $ 66.30 per share.

The Company also amended and restated its certificate of incorporation to (i) authorize the issuance of 3,500 million shares of Class A common stock and 8 million shares of Class B common stock and (ii) authorize the issuance of 10 million shares of preferred stock.

RIVIAN AUTOMOTIVE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Contingently Redeemable Convertible Preferred Stock

Since the preferred stock outstanding prior to the IPO was contingently redeemable upon a Deemed Liquidation Event as defined in the Company ’s Certificate of Incorporation, it was classified as mezzanine equity prior to the IPO .

During the year ended December 31, 2021 , approximately 72 million shares of Series F contingently redeemable convertible preferred stock were issued for $ 2,650 million .

The Company has two classes of common stock:

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Any shares of Class B common stock that are no longer owned by the Company ’s CEO or their affiliates will automatically convert into an equal of shares of Class A common stock upon transfer of ownership.

RIVIAN AUTOMOTIVE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Stock Warrants

As of December 31, 2021, 2022, and 2023, the Company had 12 million shares of common stock warrants outstanding and exercisable with a weighted-average exercise price of $ 6.84 .

As of December 31, 2022, 2023, and 2024, the Company had warrants outstanding and exercisable to purchase 12 million shares of Class A common stock, with a weighted-average exercise price of $ 6.84 .

The weighted-average remaining contractual life of common stock warrants outstanding and exercisable as of December 31, 2022, 2023, and 2024 is 6 years, 5 years, and 4 years, respectively.

There were no common stock warrants granted during the years ended December 31, 2022, 2023, and 2024.

There was no activity for the year ended December 31, 2023.

COMMITMENTS AND CONTINGENCIES

Legal Proceedings and Loss Contingencies

Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties, and other sources are recorded within “Accrued liabilities” on the Consolidated Balance Sheets .

The Company accrues contingencies when management believes that a loss is probable and the amounts can be reasonably estimated, while contingent gains are recognized only when realized.

In the event any losses are sustained in excess of accruals, they are charged against income in the period they occur.

In evaluating loss contingencies, management takes into consideration factors such as historical experience with matters of similar nature, specific facts and circumstances, and the likelihood of prevailing.

Management evaluates and updates accruals as matters progress over time.

It is reasonably possible that some of the matters for which accruals have not been established could be decided unfavorably to the Company and could require recognizing future expenditures.

Loss contingencies arise from claims, assessments, litigation, fines, penalties, and other sources and are recognized as accrued liabilities when management believes that a loss is probable and the amount can be reasonably estimated.

Gain contingencies are recognized only when realized.

In the event any losses are sustained in excess of accrued liabilities, they are charged against income in the period in which they occur.

Accrued liabilities for loss contingencies are evaluated and updated as matters progress over time.

It is reasonably possible that some of the loss contingencies for which accrued liabilities have not been established could be resolved unfavorably to the Company and could require recognizing future expenditures.

Legal costs related to contingencies are recognized as expenses as they are incurred.

The Company is involved in legal proceedings and evaluates other loss contingencies, primarily related to supplier contract claims and employment matters which may result in obligations of the Company.

The Company believes it has valid defenses

RIVIAN AUTOMOTIVE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

with respect to these matters.

However, as of December 31, 2023, the Company has accrued approximately $ 80 million for probable losses related to these matters.

It is reasonably possible that losses could occur in excess of amounts accrued.

As of December 31, 2023, the Company estimates its reasonably possible risk of loss to be up to approximately $ 160 million, which includes the amounts accrued.

We expect the majority of the matters to be resolved within the next 12 months.

The Company is involved in legal proceedings and evaluates other loss contingencies primarily comprised of supplier disputes, which can be, for example, a result of changing demand forecasts or design modifications, along with commercial litigation including product liability claims which may result in liabilities of the Company.

Although the Company believes it has valid defenses with respect to these matters, as of December 31, 2023 and 2024, the Company recorded approximately $ 80 million and $ 110 million, respectively, for estimated probable losses related to these matters in “Accrued liabilities” on the Consolidated Balance Sheets .

As of December 31, 2024, the Company estimates it is reasonably possible that losses in excess of the accrued liability could occur, up to approximately $ 230 million, or an excess of $ 120 million over the accrued liability recorded.

The Company expects the majority of the matters to be resolved within the next 12 to 24 months.

Unconditional Purchase Obligations

During the year ended December 31, 2023, the Company entered into unrecognized commitments that require the future purchase of goods or services (“unconditional purchase obligations”).

The Company has entered into unrecognized commitments that require the future purchase of goods or services (“unconditional purchase obligations”).

The Company’s unconditional purchase obligations primarily relate to inventory purchase requirements, varying by vendor, and data services, including hosting, storage, and compute from Amazon.

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Total Future Payments

2028 and thereafter 42

NET LOSS PER SHARE

The Company's basic net loss per share is calculated by dividing net loss by the weighted-average number of shares of common stock outstanding for the period, after allocating losses to equity awards deemed to be participating securities pursuant to the two-class method.

Upon completion of the IPO during November 2021, all outstanding shares of common stock and contingently redeemable convertible preferred stock automatically converted into an equal number of shares of Class A common stock, and approximately 8 million shares of Class A common stock were exchanged for an equivalent number of shares of Class B common stock.

Except with respect to voting and conversion, the rights, including liquidation and dividend rights, of the holders of Class A and Class B common stock are identical (see Note 15 "Stockholders' Equity" ).

Accordingly, the undistributed earnings are allocated on a proportionate basis and as a result, net loss per share attributable to common stockholders is the same for Class A and Class B common stock, whether on an individual or combined basis.

Prior to the IPO, the Company considered shares of contingently redeemable convertible preferred stock to be participating securities because they participated in any dividends declared on the Company's common stock on an “if-converted to common stock” basis.

Holders of contingently redeemable convertible preferred stock did not participate in the net loss per share with common stockholders, as they did not have a contractual obligation to share in the Company's losses.

Diluted net loss per share is computed by giving effect to all potential shares of common stock, to the extent dilutive, including shares underlying the Green Convertible Notes, stock options, unvested RSUs, shares underlying the Company’s ESPP, other stock-based awards, and stock warrants.

Potential shares of common stock are excluded from the computation of diluted net loss per share if their effect would have been anti-dilutive for the periods presented or if the issuance of shares is contingent upon events that did not occur by the end of the period, in the case of Green Convertible Notes, stock options with a market condition, and other stock-based awards.

The following table presents the number of potential shares of

RIVIAN AUTOMOTIVE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

common stock outstanding as of the end of each period that were excluded from the computation of diluted net loss per share for each period (in millions):

Potential shares of common stock are excluded from the computation of diluted net loss per share if their effect would have been anti-dilutive for the periods presented, the issuance of shares is contingent upon events that did not occur by the end of the period (in the case of Green Convertible Notes), or stock options contain a market condition.

The following table presents the number of potential shares of common stock outstanding as of the end of each period that were excluded from the computation of diluted net loss per share for each period (in millions):

Years Ended December 31,

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Capped Calls are excluded from the calculation of diluted earnings per share as they would be antidilutive.

However, upon conversion, there will be no economic dilution from the 2030 Green Convertible Notes unless the market price of the Company’s Class A common stock exceeds the cap price as exercise of the Capped Calls offsets any dilution from the 2030 Green Convertible Notes from the conversion price up to the cap price.

However, upon conversion, there will be no economic dilution from the 2030 Green Convertible Notes unless the market price of the Company’s Class A common stock exceeds the cap price because exercise of the Capped Calls offsets any dilution from the 2030 Green Convertible Notes from the conversion price up to the cap price.

A reconciliation of the numerator and denominator used in the calculation of basic and diluted net loss per share is as follows (in millions, except per share data):

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RIVIAN AUTOMOTIVE, INC.

Changes in and Disagreements With Accountants on Accounting and Financial Disclosures

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SEGMENT INFORMATION

The Company defines its segments on the basis by which internally reported financial information is regularly reviewed by the CODM to evaluate financial performance, make operating decisions, and allocate resources.

The Company’s Chief Executive Officer (“CEO”) has been identified as the CODM.

As a result of this change, the Company analyzes the results of the business through the following reportable segments:

Automotive and Software and Services.

The Company's CODM assesses each segment's performance (i.e., progress against goals and overall cost management) using gross profit compared to prior period results and internal forecasts.

This assessment includes the drivers of changes in gross profit by segment, including changes in volume and mix and in net pricing and cost categories at constant volume and mix.

Gross profit is comprised of revenues and cost of revenues.

The Automotive reportable segment derives its revenues and cost of revenues from the production and sale of new EVs and the sale of regulatory credits generated by the production and sale of EVs.

Software and Services

The Software and services reportable segment derives its revenues and cost of revenues primarily from remarketing, vehicle repair and maintenance services, and vehicle electrical architecture and software development services.

Subscriptions, extended service contracts, sales of vehicle accessories and regulatory credits not generated by the production and sale of EVs, and other items are also included.

As of and for the year ended December 31, 2024, the Company’s assets and revenues are primarily in the United States.

The CODM does not receive segment asset information as it is not used to assesses each segment's performance.

There are no inter-segment revenues.

The tables below provide a reconciliation from the Company’s gross profit by segment to consolidated gross profit (in millions):

Year Ended December 31, 2024

Automotive Software and Services Consolidated

Revenues $ 4,486 $ 484 $ 4,970

Cost of revenues 5,693 477 6,170

Gross profit $ ( 1,207 ) $ 7 $ ( 1,200 )

Year Ended December 31, 2023

Automotive Software and Services Consolidated

Revenues $ 4,132 $ 302 $ 4,434

Cost of revenues 6,150 314 6,464

Gross profit $ ( 2,018 ) $ ( 12 ) $ ( 2,030 )

Year Ended December 31, 2022

Automotive Software and Services Consolidated

Revenues $ 1,554 $ 104 $ 1,658

Cost of revenues 4,666 115 4,781

Gross profit $ ( 3,112 ) $ ( 11 ) $ ( 3,123 )

RIVIAN AUTOMOTIVE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

VARIABLE INTEREST ENTITIES

Rivian and VW Group Technology, LLC

In November 2024, the Company established a joint venture, Rivian and VW Group Technology, LLC, with Volkswagen Group.

The Joint Venture was established as an electrical architecture technology company with a focus on software, electronic control units and related network architecture design and development.

The Company and Volkswagen Group each contributed working capital, certain assets, and personnel to the Joint Venture in exchange for 50 % each of the equity interests in the Joint Venture.

The ”Non-controlling Interest” in the Joint Venture recorded in the Statement of Changes in Stockholders’ Equity was based on the carrying value of the net assets of the Joint Venture immediately before the $ 92 million in net assets were contributed by Volkswagen Group.

The Joint Venture’s operations are funded through development fees to be paid by the Company and Volkswagen Group.

Fees payable for development services that benefit the general technology stack usable by both the Company and Volkswagen Group are paid 75 % by VW and 25 % by the Company, through 2028.

Starting from 2029, the parties will bear such fees equally, with Volkswagen Group paying $ 100 million per year in excess of its equal share in contemplation of its comparatively larger vehicle portfolio.

Development fees for the benefit of one specific party will be borne entirely by such party.

The Joint Venture is a separate legal entity with its own management and board of directors.

The Joint Venture’s board of directors consists of four directors, with the Company and Volkswagen Group each appointing two directors.

The Joint Venture is managed day-to-day by two Co-CEOs, with each of the Company and Volkswagen Group appointing one Co-CEO.

The Joint Venture may be terminated by the mutual agreement of both parties.

Either party will become entitled to purchase all Joint Venture equity held by the party upon the occurrence of certain events, such as material breaches after a party’s change of control or events indicating impending insolvency of a party.

The Joint Venture is a separate legal entity that is a Variable Interest Entity (“VIE”), and the Company’s equity interest in the Joint Venture is a variable interest requiring consolidation because the Company has determined that it is the primary beneficiary of the Joint Venture.

The Company is the primary beneficiary of the Joint Venture as a result of several factors, including that the Co-CEO appointed by the Company is the Chief Software Officer of the Company, as well as the Chief Technology Officer of the Joint Venture.

In this role, the Co-CEO appointed by the Company directs the overall technical strategy of the Joint Venture, as well as its execution, which are key activities of the Joint Venture.

Additionally, a portion of the Joint Venture’s workforce performs services exclusively for the Company.

The equity interests held by Volkswagen Group and its 50 % portion of net income are reflected in stockholders’ equity on the Consolidated Balance Sheets as “Non-controlling interest” and in the Consolidated Statements of Operations as “Net income attributable to noncontrolling interest”, respectively.

As of December 31, 2024, the assets and liabilities of the Joint Venture were approximately $ 250 million and $ 155 million and primarily comprised of cash and current portion of deferred revenue, respectively.

Total revenues and expenses of the Joint Venture were not material for the year ended December 31, 2024.

Changes in and Disagreements With Accountants on Accounting and Financial Disclosure

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data