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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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Rob talks New Jersey past, present, and future with Employ America’s Skanda Amarnath.
Electricity prices are the biggest economic issue in the New Jersey governor’s race, which is perhaps next month’s most closely watched election. Mikie Sherrill, the Democratic candidate and frontrunner, has pledged to freeze power prices for state residents after getting elected. Can she do that?
On this week’s episode of Shift Key, Rob talks to Skanda Amarnath, the executive director of Employ America, a center-left think tank that aims to encourage a “full-employment, robust-growth economy.” He’s also a nearly lifelong NJ resident. They chat about how New Jersey got such expensive electricity, whether the nuclear construction boom is real, and what lessons nuclear companies should take from economic history.
Shift Key is hosted by Robinson Meyer, the founding executive editor of Heatmap, and Jesse Jenkins, a professor of energy systems engineering at Princeton University. Jesse is off this week.
Subscribe to “Shift Key” and find this episode on Apple Podcasts, Spotify, Amazon, YouTube, or wherever you get your podcasts.
You can also add the show’s RSS feed to your podcast app to follow us directly.
Here is an excerpt from our conversation:
Robinson Meyer: Is there a nuclear bubble? … As people who are interested in long-term decarbonization, number one, this is quite reminiscent of the environment that hit clean energy companies right as Biden was taking office. And number two, is there a nuclear bubble, and what does this mean for how we should think about nuclear going forward? Because at the end of this, I think the only way that any of this helps the climate is if we build a lot more plants.
Skanda Amarnath: We are definitely in a moment when there’s a lot of froth. I don’t want to say everything — it’s always like, it’ll feel unfair and not accurate to go after every single proposition that’s in markets. Like for example, Rick Perry’s Fermi America, they did an IPO and raised a lot of capital pretty successfully. And they have a plan for how they want to build a lot of stuff out — gas, solar, batteries. They want to build four AP1000s, the large, light-water reactors that are seen as the most recent that we’ve built in the United States, and they think they could do them at the same speed that China builds those same reactors.
On the surface of it, there are parts of it that seem interesting and promising. On the other hand, there’s also parts of it that feel very much wrapped up in the speculative frenzy. It gets more exaggerated when you get to like examples like Oklo. They seem to be very politically connected, specifically to Chris Wright. That plus some very small milestone successes in the fuel supply chain are now being sort of magnified into, They’re going be very successful in building out there first of a kind technology. And even in the space of small modular reactors, what they’re offering seems at least substantially more risky than what may be — outside of the space, so even compared to GE’s proposition for a small boiling water reactor, the technology that’s involved with like Oklo is kind of out there.
And one of the things, the lessons of nuclear, if you look through the history, is the more new stuff you’re doing, the harder it is, the more likely it is that you will get heartburn in terms of cost, in terms of schedule, and you never want to do this again. And it’ll involve a lot of bankruptcy, as it did with the case of the Georgia reactors that were built in the last decade. And so this is a sign that there’s clearly a lot of hype and a lot of willingness to take risk, and it’s not really backed up by fundamentals. That can be sometimes overrated in a boom. But that is something that people will look to in a bust and say, what were we doing here? Why was the price of the stock so high?
Mentioned:
How Electricity Got So Expensive
New Jersey’s Next Governor Probably Can’t Do Much About Electricity Prices, by Matt Zeitlin for Heatmap
Previously on Shift Key: The Last Computing-Driven Electricity Demand Boom That Wasn’t
Meta lays off 600 workers
Amazon lays off 14,000 workers
This episode of Shift Key is sponsored by …
Hydrostor is building the future of energy with Advanced Compressed Air Energy Storage. Delivering clean, reliable power with 500-megawatt facilities sited on 100 acres, Hydrostor’s energy storage projects are transforming the grid and creating thousands of American jobs. Learn more at hydrostor.ca.
A warmer world is here. Now what? Listen to Shocked, from the University of Chicago’s Institute for Climate and Sustainable Growth, and hear journalist Amy Harder and economist Michael Greenstone share new ways of thinking about climate change and cutting-edge solutions. Find it here.
Music for Shift Key is by Adam Kromelow.
The storm currently battering Jamaica is the third Category 5 to form in the Atlantic Ocean this year, matching the previous record.
As Hurricane Melissa cuts its slow, deadly path across Jamaica on its way to Cuba, meteorologists have been left to marvel and puzzle over its “rapid intensification” — from around 70 miles per hour winds on Sunday to 185 on Tuesday, from tropical storm to Category 5 hurricane in just a few days, from Category 2 occurring in less than 24 hours.
The storm is “one of the most powerful hurricane landfalls on record in the Atlantic basin,” the National Weather Service said Tuesday afternoon. Though the NWS expected “continued weakening” as the storm crossed Jamaica, “Melissa is expected to reach southeastern Cuba as an extremely dangerous major hurricane, and it will still be a strong hurricane when it moves across the southeastern Bahamas.”
So how did the storm get so strong, so fast? One reason may be the exceptionally warm Caribbean and Atlantic.
“The part of the Atlantic where Hurricane Melissa is churning is like a boiler that has been left on for too long. The ocean waters are around 30 degrees Celsius, 2 to 3 degrees above normal, and the warmth runs deep,” University of Redding research scientist Akshay Deoras said in a public statement. (Those exceedingly warm temperatures are “up to 700 times more likely due to human-caused climate change,” the climate communication group Climate Central said in a press release.)
Based on Intergovernmental Panel on Climate Change reports, the National Oceanic and Atmospheric Administration concluded in 2024 that “tropical cyclone intensities globally are projected to increase” due to anthropogenic climate change, and that “rapid intensification is also projected to increase.”
NOAA also noted that research suggested “an observed increase in the probability of rapid intensification” for tropical cyclones from 1982 to 2017 The review was still circumspect, however, labeling “increased intensities” and “rapid intensification” as “examples of possible emerging human influences.”
What is well known is that hurricanes require warm water to form — at least 80 degrees Fahrenheit, according to NOAA. “As long as the base of this weather system remains over warm water and its top is not sheared apart by high-altitude winds, it will strengthen and grow.”
A 2023 paper by hurricane researcher Andra Garner argued that between 1971 and 2020, rates of intensification of Atlantic tropical storms “have already changed as anthropogenic greenhouse gas emissions have warmed the planet and oceans,” and specifically that the number of these storms that intensify from Category 1 or weaker “into a major hurricane” — as Melissa did so quickly — “has more than doubled in the modern era relative to the historical era.”
“Hurricane Melissa has been astonishing to watch — even as someone who studies how these storms are impacted by a warming climate, and as someone who knows that this kind of dangerous storm is likely to become more common as we warm the planet,” Garner told me by email. She likened the warm ocean waters to “an extra shot of caffeine in your morning coffee — it’s not only enough to get the storm going, it’s an extra boost that can really super-charge the storm.”
This year has been an outlier for the Atlantic with three Category 5 storms, University of Miami senior research associate Brian McNoldy wrote on his blog. “For only the second time in recorded history, an Atlantic season has produced three Category 5 hurricanes,” with wind speeds reaching and exceeding 157 miles per hour, he wrote. “The previous year was 2005. This puts 2025 in an elite class of hurricane seasons. It also means that nearly 7% of all known Category 5 hurricanes have occurred just in this year.” One of those Category 5 storms in 2005 was Hurricane Katrina.
Jamaican emergency response officials said that thousands of people were already in shelters amidst storm surge, flooding, power outages, and landslides. Even as the center of the storm passed over Jamaica Tuesday evening, the National Weather Service warned that “damaging winds, catastrophic flash flooding and life-threatening storm surge continues in Jamaica.”
With Trump turning the might of the federal government against the decarbonization economy, these investors are getting ready to consolidate — and, hopefully, profit.
Since Trump’s inauguration, investors have been quick to remind me that some of the world’s strongest, most resilient companies have emerged from periods of uncertainty, taking shape and cementing their market position amid profound economic upheaval.
On the one hand, this can sound like folks grasping at optimism during a time when Washington is taking a hammer to both clean energy policies and valuable sources of government funding. But on the other hand — well, it’s true. Google emerged from the dot-com crash with its market lead solidified, Airbnb launched amid the global financial crisis, and Sunrun rose to dominance after the first clean tech bubble burst.
The circumstances may change, but behind all of these against-the-odds successes are investors who saw opportunity where others saw risk. In the climate tech landscape of 2025, well-capitalized investors are eyeing some of the more mature sectors being battered by federal policy or market uncertainty — think solar, wind, biogas, and electric transportation — rather than the fresh-faced startups pursuing more cutting edge tech.
“History does not repeat, but it certainly rhymes,” Andrew Beebe, managing director at Obvious Ventures, told me. He was working as the chief commercial officer at the solar company Suntech Power when the first climate tech bubble collapsed in the wake of the 2008 financial crisis. Back then, venture capital and project financing dried up instantly, as banks and investors faced heavy losses from their exposure to risky assets. This time around, “there’s plenty of capital at all stages of venture,” as well as infrastructure investing, he said. That means firms can afford to swoop in to finance or acquire undervalued startups and established companies alike.
“I think you’re gonna see a lot of projects in development change hands,” Beebe told me.
Investors don’t generally publicize when the companies or projects that they’re backing become “distressed assets,” i.e. are in financial trouble, nor do they broadcast when their explicit goal is to turn said projects around. But that’s often what opportunistic investing entails.
“As investors in the energy and infrastructure space — which is inherently in transition — we take it as a very important point of our strategy to be opportunistic,” Giulia Siccardo, a managing director at Quinbrook, told me. (Prior to joining the investment firm, Siccardo was director of the Department of Energy’s Office of Manufacturing & Energy Supply Chains under President Biden.)
Quinbrook sees opportunities in biogas and renewable natural gas, a sector that once enjoyed “very cushioned margins” thanks to investor interest in corporate sustainability, Siccardo told me, but which has lately gone into a “rapid decline.” But she’s also looking at solar and storage, where developers are rushing to build projects before tax credits expire, as well as grid and transmission infrastructure, given the dire need for upgrades and buildout as load growth increases.
As of now, the only investment Quinbrook has explicitly described as opportunistic is its acquisition of a biomethane facility in Junction City, Oregon. When it opened in 2013, the facility used food waste — which otherwise would have emitted methane in a landfill — to produce renewable biogas for clean electricity generation. But after Shell acquired the plant, it switched to converting cow manure and agricultural residue into renewable natural gas for heavy-duty transportation fuels, a process that it’s operated commercially since 2021. Siccardo declined to provide information about the plant’s performance at the time of Quinbrook’s acquisition, though presumably, it has yet to reach its total production capacity of 730,000 million British thermal units per year — enough to supply about 12,000 U.S. households.
The extension of the clean fuel production tax credit, plus the potential for hyperscalers to purchase RNG credits, are still driving demand, however. And that’s increased Siccardo’s confidence in pursuing investments and acquisitions in the space. “That’s a market that, from a policy standpoint, has actually been pretty stable — and you might even say favored — by the One Big Beautiful Bill relative to other technologies,” she explained.
Solar, meanwhile, is still cheap and quick to deploy, with or without the tax credits, Siccardo told me. “If you strip away all subsidies, and are just looking at, what is the technology that’s delivering the lowest cost electron, and which technology has the least supply chain bottlenecks right now in North America —- that drives you to solar and storage,” she said.
Another leading infrastructure investment firm, Generate Capital, is also looking to cash in on the moment. After replacing its CEO and enacting company-wide layoffs, Generate’s head of external affairs, Jonah Goldman, told me that “managers who understand the [climate] space and who can take advantage of the opportunities that are underpriced in this tougher market environment are set up to succeed.”
The firm also sees major opportunities when it comes to good old solar and storage projects. In an open letter, Generate’s new CEO, David Crane, wrote that “for the first time in nearly four decades, the U.S. has an insatiable need for more power: as much as we can produce, as soon as we can, wherever and however we can produce it.”
Crane sees it as the duty of Generate and other investors to use mergers and acquisitions as a tool to help clean tech scale and mature. “If companies across our subsectors were publicly traded, the market itself would act as a centripetal force towards industry consolidation,” he wrote. But because many clean energy companies are privately funded, Crane said “it is up to us, the providers of that private capital, to force industry improvement, through consolidation and otherwise.”
Helping solar companies accelerate their construction timelines to lock in tax credit eligibility has actually become an opportunistic market of its own, Chris Creed, a managing partner at Galvanize Climate Solutions and co-head of its credit division, told me. “Helping those companies that need to start or complete their projects within a predetermined time frame because of changes in the tax credit framework became an investable opportunity for us,” Creed told me. “We have a number of deals in our near term pipeline that basically came about as a result of that.”
Given that some solar companies are bound to fare better than others, he agreed that mergers and acquisitions were likely — among competitors as well as involving companies working in different stages of a supply chain. “It wouldn’t shock me if you saw some horizontal consolidation or some vertical integration,” Creed told me.
Consolidation can only go so far, though. So while investors seem to agree that solar, storage, and even the administration’s nemesis — wind — are positioned for a long and fruitful future, when it comes to more emergent technologies, not all will survive the headwinds. Beebe thinks there’s been “irrational exuberance” around both green hydrogen and direct air capture, for example, and that seasoned investors will give those spaces a pass.
Electric mobility — e.g. EVs, electric planes, and even electrified shipping — and grid scalability — which includes upgrades to make the grid more efficient, flexible, and optimized — are two sectors that Beebe is betting will survive the turmoil.
But for all investors that have the capability to do so, for now, “the easy bet is just to move your money outside the U.S.” Beebe told me.
We might be starting to see just that. Quinbrook also invests in the U.K. and Australia, and just announced its first Canadian investment last week. It acquired an ownership stake in Elemental Clean Fuels, an energy developer making renewable fuels such as RNG, low-carbon methanol, and — yes — clean hydrogen.
Last week, Generate announced that it had closed $43 million in funding from the Canadian company Fiera Infrastructure Private Debt for its North American portfolio of anaerobic digestion projects, which produce renewable natural gas — Generate’s first cross-currency, cross-border deal.
Creed still has confidence in the U.S. market, however, telling me he’s “very bullish on American innovation.” He certainly acknowledges that it’s a tough time out there for any investor deciding where to park their money, but thinks that ultimately, “that volatility should manifest itself as excess returns to investors who are able to figure out their investment strategy and deploy in this environment.”
Exactly what firms will manage this remains an open question, and the opportunities may be short-lived — but it’s a race that plenty of investors are getting in on.