Rivian Beats Earnings Expectations As October EV Sales Collapse 43% Following Tax Credit Expiration

Rivian Automotive posted better-than-expected third-quarter earnings Tuesday, reporting a narrowed adjusted loss and positive gross profit for the second time this year. But the electric vehicle maker’s stock surge couldn’t mask the harsh reality waiting just beyond the quarterly numbers: October EV sales plummeted 43% compared to the same month last year, according to automotive consultancy Urban Science, as the September 30 expiration of federal tax credits triggers the demand collapse EVXL predicted.

The Irvine-based company reported an adjusted loss of 65 cents per share for the quarter ending September 30, beating Wall Street’s expectation of a 71-cent loss, according to Bloomberg. Revenue hit $1.56 billion, topping the $1.5 billion estimate. But the actual reported loss told a different story: 96 cents per share, worse than the 88-cent loss analysts anticipated, Barron’s reported.

Positive Gross Profit Masks Temporary Tax Credit Surge

Rivian achieved $24 million in positive gross profit during Q3, significantly better than the $64 million loss Wall Street expected, according to CNBC. The company slashed automotive costs by nearly $19,000 per vehicle year-over-year, demonstrating progress on CEO RJ Scaringe’s aggressive cost-reduction program.

The improved numbers were driven largely by a 32% surge in deliveries to 13,201 vehicles compared to the same quarter last year. But that spike wasn’t organic growth—it was customers rushing to purchase before the $7,500 federal EV tax credit expired on September 30, 2025.

“Higher third-quarter EV deliveries helped boost revenue 78% from a year earlier to about $1.56 billion, topping Wall Street estimates,” Bloomberg reported. “The company sold more than 13,000 EVs in the period, helped by consumers rushing to secure the $7,500 US tax credit before it expired on Sept. 30.”

Rivian’s stock rose 3.4% in after-hours trading following the earnings release, with shares climbing to $13 despite declining less than 1% through Monday’s close for the year.

R2 Launch On Track As Tariff Impacts Ease

Scaringe emphasized progress on the company’s make-or-break R2 midsize SUV, scheduled for first-half 2026 deliveries at a targeted starting price of $45,000.

“R2 delivers on the adventurous spirit customers expect from Rivian,” Scaringe said in the shareholder letter. “It’s also a great daily driver that will fit so many different use cases for our customers.”

The company said it’s on track for R2 deliveries in the first half of 2026 and will launch with “features and a price to make the most people the most happy,” Scaringe told analysts on an earnings call, according to Bloomberg.

Rivian also disclosed reduced tariff impacts following policy changes. The company now expects tariff costs of “hundreds of dollars” per vehicle, down from the “couple thousand dollar hit it saw per car in the third quarter,” CNBC reported. Chief Financial Officer Claire McDonough attributed the improvement to expanded offset policies for certain imported parts on American-made vehicles.

October Sales Collapse Reveals Post-Credit Reality

The optimistic Q3 numbers stand in stark contrast to October’s performance. Consumer EV purchases dropped 43% compared to October 2024, according to data from automotive consultancy Urban Science cited in Bloomberg’s original reporting.

The timing directly follows the September 30 expiration of the $7,500 federal tax credit for new EVs and $4,000 credit for used models. Congress eliminated the incentive through President Trump’s “One Big Beautiful Bill,” cutting short a program originally scheduled to run through 2032.

“While we face near-term uncertainty from trade, tariffs, and regulatory policy, we remain focused on long-term growth and value creation,” Scaringe wrote in the shareholder letter, according to Rivian’s official release.

Rivian previously lowered its 2025 delivery guidance to between 41,500 and 43,500 vehicles, down from an earlier target of 46,000 units. Fourth-quarter deliveries are expected to drop approximately 30% year-over-year, with the company projecting around 10,000 vehicles for the period.

Mind Robotics Spinoff Raises $110 Million

In an unexpected announcement buried in the earnings release, Rivian revealed it established a new company called Mind Robotics in November 2025, securing approximately $110 million in external seed capital led by venture capital firm Eclipse, TechCrunch reported.

The industrial AI and robotics venture will focus on “the advancement of industrial AI to reshape how physical world businesses operate and leverage Rivian operations data as the foundation for a robotics data flywheel,” according to the shareholder letter. Scaringe will serve as chairman of Mind Robotics’ board of directors.

The launch marks Rivian’s second major spinoff in 2025, following the March creation of ALSO Inc., a micromobility company that develops electric bikes and quadricycles.

EVXL’s Take

Let’s be clear about what just happened: Wall Street applauded Rivian’s Q3 “beat” while completely ignoring that those deliveries were artificially inflated by customers racing to claim tax credits before they vanished. Now that temporary surge has evaporated, and October’s 43% sales collapse reveals the brutal reality facing every EV maker in the post-subsidy era.

We’ve been tracking this exact scenario for months. Back in July, we covered the impending tax credit expiration and warned about the demand cliff that would follow. In October, we reported on Rivian’s third round of layoffs in four months—600 jobs cut, primarily in sales, marketing, and customer service. The same day, Rivian announced a $250 million settlement of an IPO fraud lawsuit alleging the company deliberately concealed pricing problems during its 2021 public offering.

Here’s the disconnect that should worry investors: Rivian is cutting the very teams it needs most to launch the R2 successfully. As we noted in our analysis of CEO RJ Scaringe’s layoff memo, the company is slashing sales and marketing staff right when it needs massive consumer education and aggressive outreach to move beyond early adopters. The R2 launch will determine whether Rivian survives or joins the graveyard of EV startups that couldn’t scale.

The positive gross profit deserves credit—it shows Rivian can theoretically build vehicles profitably. But “theoretically” doesn’t pay the bills when you’re burning over $1 billion per quarter and sitting on less than $6 billion in remaining cash. The $110 million Mind Robotics spinoff, while potentially valuable long-term, feels like rearranging deck chairs when the ship needs all hands focused on the R2 launch.

Context matters here. GM just laid off 3,300 EV workers following the tax credit expiration, idling massive battery plants barely two months after the subsidy ended. Ford’s October EV sales dropped 25% year-over-year. Toyota sold just 18 units of its BZ electric vehicle in October, down from 1,401 a year earlier. This isn’t a Rivian problem—it’s an industry-wide reckoning.

The R2 represents Rivian’s last chance to prove it can compete in the mass market. Starting at $45,000 without any federal incentives, it needs to be compelling enough to convince mainstream buyers to choose electric over comparable gas SUVs that cost $10,000 less. Analysts estimate automakers need around 400,000 annual sales to achieve positive operating income—a target that remains distant even if the R2 succeeds.

Wall Street may be celebrating cost cuts and improved margins, but the real test arrives in early 2026 when the R2 hits the market. Will Rivian’s adventure-focused brand resonate with budget-conscious families? Can a company that just gutted its sales force effectively market to mass-market buyers? And most critically: will there be enough “natural demand” for EVs without subsidies to support a pure-play electric vehicle company?

We’ll find out soon enough. Either Rivian establishes itself as a legitimate Tesla alternative, or 2026 becomes the year it joins Lordstown Motors, Fisker, and other cautionary tales about the brutal economics of EV manufacturing.

What do you think? Share your thoughts in the comments below.