Rivian, the electric vehicle (EV) maker, has taken significant steps towards profitability, but the company is cautioning that 2025 could still be a challenging year. In its fourth-quarter and full-year 2024 financial results announced on Thursday, Rivian shared plans to deliver between 46,000 and 51,000 EVs across 2025. However, the company warned that "changes to government policies and regulations, and a challenging demand environment" could affect those results.

The uncertainty surrounding 2025 is largely attributed to the new Trump Administration, which has hinted at making changes to the $7,500 federal EV tax credit. Additionally, Vivek Ramaswamy, a friend of the Trump administration, has called for the $6.6 billion loan from the Department of Energy to be clawed back. This loan was finalized just three days before Trump took office.

Despite the uncertainty, Rivian has made significant progress in cutting costs. In 2024, the company laid off 10% of its workforce in February and introduced simplified, cheaper-to-make versions of its flagship EVs, the R1T pickup and the R1S SUV, in June. These efforts resulted in changes to 600 parts on those vehicles, driving down manufacturing costs. Rivian also revamped its electric architecture and software user interface.

The cost-cutting measures have started to bear fruit, with Rivian reporting $170 million of positive gross profit in the final quarter of 2024. Although $60 million of that came from software and services, the company's efforts to reduce manufacturing costs are clearly paying off.

Rivian reported $1.7 billion in revenue for the fourth quarter, a 32% increase from the same period in 2023. The bulk of its Q4 revenue – about $1.5 billion – came from the sale of 14,183 vehicles, as well as $299 million from the sale of zero-emissions regulatory credits to automakers. For the year, Rivian reported $325 million in revenues from the sale of regulatory credits.

Software revenue is increasingly playing a crucial role in Rivian's business. The company generated $214 million from software and services in the fourth quarter, double the amount from the same-year-ago period. Rivian reported $484 million in revenue for 2024 from software and services. This growth is largely driven by charging and subscriptions fees, repair and maintenance services, and new vehicle electrical architecture and software development services provided by the joint venture with Volkswagen Group.

Rivian's future is closely tied to its software business, particularly through its lucrative joint venture with Volkswagen Group. As the company continues to navigate the challenges of the EV market, its ability to adapt and innovate will be crucial to its long-term success.

Despite the uncertainty surrounding 2025, Rivian's progress towards profitability is a positive sign for the company and the EV industry as a whole. As the market continues to evolve, Rivian's ability to balance cost-cutting measures with innovation and software revenue growth will be key to its success.