R2 Excitement Builds; Ramp Remains the Risk

Research evidence excerpt

R2 Excitement Builds; Ramp Remains the Risk

IdeaMWe are increasing our 2026 estimates to reflect the low end the of the company's

delivery and adj. EBITDA guidance, reflecting our more bullish view on R2 demand

while recognizing ongoing risk related to the production ramp. However, we

modestly lower our 2027 estimates as we expect opex growth to accelerate as the

company focuses in on bringing higher levels of autonomy to market. As such, we

are maintaining our UW rating on the stock as we believe the next 6 months come

with heightened risk around the ramp and as we await clearer signals that the R2 is

achieving key cost milestones. We are increasing our price target to $14 (from $13),

which is comprised of $8/shr for auto, which is DCF-based and implies 1.5x 2027 EV/

Sales (slight discount to our TSLA auto valuation at 1.6x EV/Sales), and $6/shr for

software and services, which represents 13x 2030 EBITDA (a discount to our Tesla

Network Services valuation at 26x 2030 EBITDA).

Key Takeaways from the Call:

• Margins ahead of expectations, though the beat was largely driven by reg

credits (non-recurring) and IEEPA refund, with limited flow through to

guidance. RIVN recognized an adj. EBITDA loss of -$379m in 2Q, including

$108m of regulatory-credit revenue and an IEEPA tariff refund booked in

COGS; management said the 2Q receivable represented roughly half of total

IEEPA exposure previously sized in the “tens of millions”. Excluding the

$108m of regulatory-credit revenue and an estimated ~$15m IEEPA benefit,

adj. EBITDA would have been approximately -$500m, still +10%/+25% above

consensus at -$557m and MSe at -$659m. That said, RIVN only raised its adj.

EBITDA guidance $50m at the midpoint to $(2.0)–$(1.8)bn despite beating