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The all-American EV startup is cutting costs to survive.

America’s most interesting electric-vehicle company is about to have the defining year of its life.
On Wednesday, the company reported that it lost $1.58 billion in the fourth quarter of last year, bringing its net annual losses to $5.4 billion. It announced that it is laying off about 10% of its salaried employees, but — at the same time — promised that it has a plan to achieve a small profit by the end of this year.
Rivian does not seem to be in trouble — not quite yet, at least. But the earnings made clear what electric-vehicle observers have known for a long time: Either the company will emerge from this year poised to be a winner in the EV transition, or it will find itself up against the wall.
That’s partially because Rivian has a stomach-turning number of corporate milestones coming up. Over the next 11 months, it plans to unveil an entirely new line of vehicles, shut down its factory for several weeks for cost-saving upgrades, break ground on a new $5 billion facility in Georgia, and — most importantly — turn a profit for the first time. It also expects to manufacture and deliver roughly another 60,000 vehicles to customers.
Any one of these goals would be difficult to achieve in any environment. But Rivian is going to have to execute all of them during a time defined by “economic and geopolitical uncertainties” and especially high interest rates, its CEO R.J. Scaringe told investors on Wednesday. Since 2021, Rivian’s once robust stockpile of cash has been cut in half to about $7 billion; at its current burn rate, the company will run out of money in a little more than two years.
Although Rivian’s situation is dire, it’s not experiencing anything out of the ordinary. As I’ve written before, the electric truck maker is crossing what commentators sometimes call “the EV valley of death.” This is the challenging point in a company’s life cycle where it has developed a product and scaled it up to production — thereby raising its operating expenses to eye-watering levels — but where its revenue has not yet increased too.
During this vulnerable period, a company essentially burns through its cash on hand in the hope that more customers and serious revenue will soon show up. If those customers don’t arrive, then it either needs to raise more cash … or it runs out of money and goes bankrupt.
It’s a frightening time, but once a company crosses the valley of death, it can reach an idyll. Not so long ago, Tesla found itself in something like Rivian’s position as it prepared to launch the Model 3. Seven years later, it is the most valuable automaker in the world.
Once Rivian’s revenue exceeds its costs, its problems will get easier, or at least more straightforward: Instead of fighting for its survival and watching its cash reserves dwindle, Scaringe will be able to make more strategic trade-offs. Should the company cut costs to expand its profit margin and reward investors, or should it pass the savings along to customers in the form of lower prices, thus growing its market share? Scaringe can’t make these types of decisions until his firm is safely out of the valley.
Claire McDonough, Rivian’s chief financial officer and a former J.P. Morgan director, has a plan for crossing that canyon — an aptly if strangely named “bridge to profitability” that it will attempt to build this year. Rivian’s survival, she said, will depend above all on cutting the unit costs of producing its vehicles, including by using fewer materials to make every car. Other savings will come from making more vehicles faster. That’s what makes the shutdown plan, though it might seem extreme, worth it; McDonough said those improvements alone will get the company about 80% of the way to profitability.
Another 15% will come from marketing more “software-enabled products” to Rivian drivers and by selling air-pollution credits to other carmakers, whose vehicles are not as climate-friendly. This is a tried-and-true technique; Tesla first turned a profit in 2021 by selling regulatory credits needed to comply with federal and California state-level rules to other, dirtier automakers. But that same year, Tesla also debuted an entirely new vehicle: the Model Y crossover, which quickly became its top seller in the United States. Tesla, in other words, finally started to make money by cutting costs, finding new revenue sources, and releasing new products.
New products, however, are becoming a weak point for Rivian. The company says that high interest rates will keep demand for its vehicles flat this year. It expects to make about 60,000 of them, about 20,000 fewer than what it had once anticipated. The Rivian R1S, a three-row S.U.V., has become the company’s flagship; it is selling better and is cheaper to manufacture than Rivian’s pickup, the R1T. It also costs at least $75,000, or nearly $600 a month to lease. The highest-tier models can cost $99,000. Turns out, it’s difficult to sell a lot of $70,000 trucks when even the cheapest new-car loans hover around 6%.
Rivian once had a first-to-market advantage in the electric three-row SUV market, but that may be fizzling out, too. Kia is now selling its own all-electric three-row SUV, the EV9, for $18,000 less than the R1S; in fact, the Kia EV9’s most expensive trim costs $76,000, which is only slightly more than the cheapest R1S. The Kia SUV can also charge faster than the Rivian under ideal conditions. It remains an open question how many rich suburbanites are still interested in buying Rivians, especially now that the Tesla Cybertruck and Ford F-150 Lightning are competing directly with Rivian’s pickup truck.
The company’s hopes, in other words, rest on its next product line: the R2, which it will launch on March 7. We know almost nothing about the R2 line, except that it will probably include an SUV, that it will go on sale in 2026, and that it will fall somewhere in the $45,000 to $55,000 price range. (The median new car transaction in the United States now costs $48,200.) Last year, Scaringe told me that the R2’s timing was perfect because it would fit “beautifully with what we see as this big shift” in the American EV market. In today’s market, he said, “a lot of people ask themselves, Am I gonna get an electric car? Well maybe the next one.” He better hope they’ll start buying that next one in 2026.
Even if they do, Rivian may still have to confront the problem that Tesla has changed the EV market before Rivian could get there. When the first Tesla Model 3s were delivered in 2017, the sedan was instantly one of the best EVs on the market — because it was one of the only EVs on the market. Now every automaker in the world has plans to compete at the Model 3’s price point.
Rivian’s fortunes don’t rest entirely on American consumers; it also sells vans to commercial fleet operators, as well as delivery trucks to Amazon. (Amazon owns about 17% of Rivian.) But that business can be lumpy. Rivian’s vehicle growth slowed down last quarter, for instance, almost entirely because of a near pause in sales to Amazon, which sets up fewer new vehicles in the fourth quarter. If Amazon is willing to bail out Rivian, in other words, it’s not yet clear in the data.
None of this is to say that the company’s outlook is dire. Rivian was always going to find itself at a moment like this, when its expenses exceeded its revenue by such a large amount. The automaker already has devoted fans, and many people — myself included — are interested in the R2 as a potential first EV purchase.
And the company has shown that it can make strides in a single year. Twelve months ago, I had never seen a Rivian on the road before; today, one is regularly parked on my block. The company rocketed from a standing start to become the No. 5 best-selling electric car brand in America last year. What the company has done so far is impressive. But now it must prove that it can be great.
Editor's note: This story has been updated to correctly reflect Rivian's cash burn rate.
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Current conditions: Tropical Depression Two strengthened into Tropical Storm Bertha yesterday, recycling the name of the 1996 Atlantic hurricane season’s first major storm • Floods from the monsoon season killed at least four people in Vietnam and left as many missing • Lightning in Utah sparked the state’s latest wildfire, the Meeks Fire, near the Strawberry Reservoir.
President Donald Trump’s on-again, off-again feud with America’s northern neighbor is, as of Monday, back on again. The White House imposed 50% tariffs on most Canadian goods, accusing the nation’s geographically nearest ally and closest cultural bedfellow of unfairly discriminating against American automotives, alcohol, and dairy products. The move threatens to unleash what the Associated Press called “a new wave of economic chaos, with risks of higher inflation and further fraying of relations between two nations that had been closely woven together before Trump’s return” to office.
In its announcement, the Trump administration said the new tariffs would “apply to all covered goods regardless of whether a good originates under the U.S.-Mexico-Canada Agreement,” referring to the Trump-negotiated North American free trade agreement, which the U.S. opted this month not to renew. This struck my colleague Robinson Meyer as ominous. “If the White House now thinks it can levy taxes despite that pact,” he wrote in yesterday’s Heatmap Daily newsletter, “then the risks for Ford, General Motors, and their suppliers have increased.”
Perhaps the only thing growing faster than voters’ antipathy toward data centers is the market’s desire for more of them. Demand for data centers is ballooning at such a rapid clip that BloombergNEF just raised its total forecast for 2035 by a jaw-dropping 83%. The latest data outlining the best-case scenario from the energy consultancy, released Tuesday morning, shows the total installed capacity of U.S. data centers reaching 194 gigawatts in the next nine years. The surge reflects how quickly new server farms are flowing into the project pipeline. In a bid to hedge against the continued expansion, BNEF created a new scenario based on the implied power demand of forecast shipments of microchips for AI computers up to 2033. This scenario implies an even greater need for power: 229 gigawatts of demand from data centers in just the next seven years. And that doesn’t count the continued growth of demand from data centers carrying out non-AI functions, such as traditional cloud computing workloads. This comes as the latest Heatmap Pro polling shows that seven in 10 Americans now oppose data centers in their backyard, a marked shift from last September, when the same survey showed voters evenly split in support and opposition.
That ballooning demand is already showing up in power markets. Of the $16.4 billion in charges from PJM Interconnection’s most recent capacity auction, $6.3 billion — some 38% — stems from data centers. That’s what Joseph Bowring, president of PJM’s independent market monitor Monitoring Analytics, told Utility Dive last week. In the last four base capacity auctions the nation’s largest grid operator held, 46% of capacity charges were driven by data centers. “PJM is continuing to act like it’s business as usual,” Bowring told the trade publication Friday. “You have to open your eyes and recognize that it is really a paradigm shift, and failing to do that imposes costs on other customers.”

On a logical level, it’s a simple supply and demand problem. The supply of electricity is not growing as quickly as demand, all while the Trump administration eliminates subsidies that once buoyed investments in new supply. As a result, corporate electricity deals look poised to increase in price. But not for every generating source. New estimates from LevelTen, a marketplace for power purchase agreements, found that solar PPAs were 5% cheaper in the second quarter of this year compared to the first quarter. In a piece by my colleague Matthew Zeitlin, LevelTen attributed the decline to an especially steep drop in prices in California’s electricity market. Excluding CAISO, solar PPA prices nationwide dropped slightly less than 2%. While hyperscalers are still buying solar, LevelTen found that commercial and industrial buyers are pulling back, creating a “continued softening in the market’s buy-side.” “We saw a lot less corporate energy buyers in the space in 2025 — 40% less — and that is just due to the increase of hyperscalers and data centers getting projects and snapping them up quickly,” Sarah Wolf, LevelTen’s director of North American transactions, told Matthew.
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Ah, Germany. The land of the Autobahn. Diesel-powered industry. The purring engines of BMWs, Porsches, and Mercedes-Benzes. The nation’s automotive might makes its latest milestone particularly important: Electric vehicles just outsold gas and diesel cars for the first time. New data from the Federal Motor Transport Authority shows that Germans registered 84,057 new electric vehicles in June, a more than 78% year-over-year increase. Traditional hybrids, meanwhile, saw 83,315 registrations, followed by gasoline-powered cars with 60,796, diesel with 33,862, and plug-in hybrids with 32,212. “The automotive history books will need a new page sooner rather than later, after electric cars outsold every other fuel type in Germany for the first time,” InsideEVs reporter Iulian Dnistran wrote. “It’s a huge shift in Europe’s biggest car market, which has traditionally been associated with diesel-powered cars that could travel hundreds of miles at highway speeds without breaking a sweat.” The Tesla Model Y was by far the best-selling EV in Germany, with nearly twice as many registrations as the No. 2 vehicle, the Volkswagen ID.3.
Putting on my Mesopotamian metal merchant hat again: Copper prices are back up. The price of the metal needed for virtually all electrical infrastructure rose 1.3% to just under $14,000 per metric ton, according to Mining.com. The price ultimately hovered at the red metal’s record set in early June. The spike stems from data showing rising tightness in the Chinese market, namely a hike in the premium buyers will pay in Shanghai for shipments of the metal. The price hiked further after a series of storms halted production in Chile for a few days.
While the West dithers on hydrogen, China is making huge strides. It already may be too late to catch up to Beijing on manufacturing the key machinery needed to produce the zero-carbon fuel. The latest data point, via Hydrogen Insight: China just shipped its largest electrolyzer order yet to Europe, via Romania.
A new report from LevelTen Energy shows that advance purchase prices are down for solar but up for wind.
The renewables market is in a state of flux. On the one hand, the tax credits that were a key pillar of wind and solar project financing have started to expire, while the race to be up and running in time to claim those that remain is on.
At the same time the renewables industry is getting whacked by federal tax policy, it’s also getting a shot in the arm from hyperscalers and data center developers, many of whom are hungry for power that can be deployed quickly to the grid and complies with their clean energy pledges.
“There’s a massive onslaught of demand, not enough supply to meet that demand and then Trump’s administration effort to slow down certain types of supply,” Jon Powers, the president of solar and storage developer CleanCapital, told me, describing how data center buyers are snapping up whatever power they can.
So what does this mean for pricing in the market? LevelTen, a marketplace for power purchase agreements, looked at the data and, in a report released Tuesday, found that solar PPAs were almost 5% cheaper in the second quarter of this year compared to the first quarter.
LevelTen attributed this decline in part to an especially steep drop in prices in CAISO, the California electricity market; excluding CAISO, solar PPA prices dropped slightly less than 2%. And while those hyperscalers are still buying, LevelTen found, other commercial and industrial customers are pulling back — what the analysts described as a “continued softening in the market’s buy-side.”
“We saw a lot less corporate energy buyers in the space in 2025 — 40% less — and that is just due to the increase of hyperscalers and data centers getting projects and snapping them up quickly,” Sarah Wolf, LevelTen’s director of North American transactions, told me.
To explain California specifically, Wolf said that the market there tends to be more volatile than in the rest of the country due to the expense and regulatory hurdles to development. With fewer new projects coming online, especially as compared to a larger, more light-touch market like Texas, individual project pricing can swing average prices more.
The tax credit cliff is “creating this very competitive atmosphere, where buyers are feeling like — in order to safe harbor their equipment, to keep on the development timelines that they have — they need to get a PPA in place,” Wolf said. “They’re looking competitively for a buyer. That’s driving some pricing down.” The same holds for renewables developers, who have wanted to get a PPA in place as quickly as possible, giving leverage to buyers who can demand lower prices.
The other factor driving down prices LevelTen identified was potential revisions to standards issued by the Greenhouse Gas Protocol, which are currently the subject of a long and fraught overhaul process.
“We have many buyers who are fully leaning in and want to contract now,” Wolf said. “And we have buyers who are in a kind of a ’wait and see’ — they want to better understand what that’s going to be, so there’s not a risk that they might have to unwind something.”
As for wind, PPA prices have actually risen, according to LevelTen’s data — up 5.5% on the quarter and 17.5% on the year. “We’re also seeing wind just being less competitive than solar,” Wolf added.
The report attributed this to tariffs, gas prices pushing up delivery costs, and the “ongoing federal permitting bottleneck that has largely ground new-build wind development to a standstill.” That means specifically the Department of Defense’s efforts to hold up wind projects on potentially spurious national security grounds.
This has meant a “fast-dwindling pipeline of viable wind assets,” LevelTen’s report says, “and price premiums for fully permitted projects available for offtake.”
In short, the best news for individual wind developers may be bad news for the industry — and the climate — as a whole.
Cement, plywood, and some electronic equipment will face 50% levies. But the real cost is much higher.
Here we go again. The United States will impose new 50% tariffs on a slew of imports from Canada, the White House announced on Monday afternoon. The trade levies — which will hit more than 500 categories of goods, from anoraks, beer, and curtains, to yarn, wool, and whey protein — will take effect in 30 days.
The new tariffs don’t seem to be wildfire-related. President Trump threatened to impose new tariffs last week after smoke from Canadian wildfires drifted south over the northern U.S. border, but administration officials have claimed to CNN that these new levies were already in motion by then.
Even so, a few aspects of the announcement stand out. Most important, at least from a generalist perspective, is the legal mechanism that President Trump is using to apply them: Section 338 of the Smoot-Hawley Tariff Act. This passage, which has never been used by a previous president to levy tariffs, allows the United States to tax trade from countries that the president says have “discriminated against” U.S. commerce.
Significant, too, is the fact the White House asserts this new kind of tariff could apply to any kind of product — even those that would normally be covered by the North American free trade pact, the U.S.-Mexico-Canada Agreement. So far, the “Big Three” automakers — whose supply chains cross the Mexican or Canadian borders half a dozen times before a car is finally assembled — have avoided major tariff danger because auto parts and other inputs fall under the USMCA’s auspices. If the White House now thinks it can levy taxes despite that pact, then the risks for Ford, General Motors, and their suppliers have increased.
Energy and critical minerals are exempt from the new tariffs, so Canadian crude oil, gasoline, diesel, natural gas, and electricity will presumably keep flowing into the United States. (That explicit carve-out might be ominous in its own right, because energy had been protected by USMCA so far, too.) By omitting energy, Trump and his officials may be calculating they can avoid major inflationary hazards from this round of tariffs.
Who knows. In any case, to my eye, these tariffs do seem like they could aggravate construction costs and possibly contribute to wider U.S. inflation. There’s already some evidence that data centers are driving a new wave of inflation, for instance, by hiking construction input and labor costs. Yet data centers use a lot of cement — and cement will now face a 50% tariff under the new regime. So too will plywood, plaster, and paperboard, as well as industrial cooling equipment, chemicals, and some circuit boards.
I could keep listing the potential economic costs here — I could point out that overall inflation risk is rising or that average U.S. gas prices rose to $4 a gallon today on the Iran war news — but I think it’s important to look at least one step beyond the hits to commerce alone.
I mentioned earlier that these tariffs are meant to punish “discrimination.” In this case, some of the “discrimination” appears to be what some Canadian provinces did to retaliate against the president’s earlier tariffs. The state-owned liquor stores in Quebec and Ontario, for instance, stopped buying U.S.-made booze after Trump slapped 25% tariffs on Canada in March 2025; those boycotts are mentioned by name in today’s proclamation. Canada, you see, is not supposed to respond to Trump’s tariffs. It is just supposed to take it — just like it’s supposed to take the constant stream of falsehoods, abuse, belittling, and invasion threat.
Over the past few years, politicians and pundits have learned to respond to Trump’s policies by appealing to U.S. self-interest — by explaining how the president’s policies are making Americans poorer. It is a sensible strategy for a morally denuded era. A recent statement from Senate Minority Leader Chuck Schumer about Canada, for example, criticized the president for hurting “our closest ally and partner … right when summer tourism season is arriving.” I get the move here — and I think, in some sense, Schumer is trying to avoid polarizing Trump’s treatment of Canada along partisan lines — but Canadians are more than their tourism dollars.
For the past several years, Trump has threatened to strip Canada of its sovereignty and its dignity. He has treated what was once a deep and secure relationship as something to be bartered and mined and dissipated. It is a mucilaginous approach to statecraft, and as recent reporting has made clear, its long-term costs will exceed any simple accounting. We Americans have been robbed of an honorable friendship. Some losses cannot be counted in dollars.