STOCK-BASED COMPENSATION

12 Months Ended

Dec. 31, 2024

Share-Based Payment Arrangement [Abstract]

Stock Plans

The Company's 2015 Long-Term Incentive Plan ("2015 Stock Plan") and 2021 Incentive Award Plan (“2021 Stock Plan” and, together, “Stock Plans”) permit the grant of stock options, restricted stock units (“RSUs”), and other stock-based awards to employees, non-employee directors, and consultants. The Company’s stock options have seven- or ten-year contractual terms, and unvested stock options and RSUs generally are forfeited upon the termination of a grantee’s service. The Company has elected to recognize forfeitures as an adjustment to compensation expense for options and RSUs in the same period as the forfeitures occur. As of December 31, 2024, 56 million and 161 million shares were reserved for issuance under the 2015 Stock Plan and 2021 Stock Plan, respectively.

Generally, the Company’s RSUs vest in quarterly installments based on a requisite service period of 2 to 4 years of continuous service. Stock options generally vest in annual installments based on a requisite service period of four years of continuous service. RSUs and options may contain performance conditions related to production and other targets. Expense is recognized on an accelerated basis for awards granted prior to the Company's November 2021 initial public offering (“IPO”) as the IPO was a performance condition. For awards granted after the IPO, the Company has elected to use the straight-line expense recognition on awards with only service conditions.

Starting in the year ended December 31, 2022, the Company approved the payment of bonus incentives to be made under the 2021 Stock Plan in the form of stock-based awards, which vest immediately upon grant in the first quarter of each year. The bonus incentives are subject to certain performance conditions related to production and other targets. As of December 31, 2023 and 2024, the total amount of accrued stock-based bonus incentives was $188 million and $49 million within the “Payroll and related costs” component of “Accrued liabilities” on the Consolidated Balance Sheets. Refer to Note 11 "Accrued Liabilities" for more information about Accrued liabilities.

The following table summarizes the Company’s restricted stock unit and stock option activity during the year ended December 31, 2024:


	RSUs			Stock Options
	Number of Shares (in millions)	Weighted-Average Grant-Date Fair Value		Number of Shares (in millions)	Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Life (in years)	Aggregate Intrinsic Value (in millions)
Outstanding at December 31, 2023	56	$	22.36	62	$	13.49
Granted	78	10.50		2	11.13
Vested / Exercised	(59)	16.12		(3)	3.87
Forfeited / Cancelled	(14)	18.90		(1)	25.26

Outstanding at December 31, 2024	61	$	14.10	60	$	13.60	5.2	$	249
Vested and expected to vest at December 31, 2024	61	$	14.10	60	$	13.60	5.2	$	249
Exercisable at December 31, 2024	—	$	—	32	$	7.14	4.1	$	243

The weighted-average grant-date fair value of RSUs granted during the years ended December 31, 2022 and 2023 was $35.87 and $15.25, respectively. The total fair value of RSUs vested during the years ended December 31, 2022, 2023 and 2024 was $566 million, $630 million and $720 million, respectively.

The weighted-average grant-date fair value of stock options granted during the years ended December 31, 2022, 2023 and 2024 was $21.64, $10.49, and $6.91, respectively. The aggregate intrinsic value of stock options exercised during the years ended December 31, 2022, 2023 and 2024 was $105 million, $29 million, and $28 million, respectively. The weighted-average grant-date fair value of stock options outstanding at December 31, 2023 and 2024 was $9.94 and $10.05, respectively. The weighted-average grant-date fair value of stock options exercisable at December 31, 2024 was $11.16.

The following table summarizes the Company’s stock-based compensation expense for the Stock Plans and 2021 Employee Stock Purchase Plan (“ESPP”) by line item in the Consolidated Statements of Operations (in millions):


	Years Ended December 31,
	2022		2023		2024
Cost of revenues	$	60	$	85	$	62
Research and development	437		408		360
Selling, general, and administrative	490		328		270
Total stock-based compensation expense	$	987	$	821	$	692

As of December 31, 2024, the Company’s unrecognized stock-based compensation expense for unvested awards was approximately $858 million, which is expected to be recognized over a weighted-average period of 5.0 years for stock options and 1.8 years for RSUs.

Fair Value Assumptions

The exercise price of all stock options granted during the years ended December 31, 2022, 2023 and 2024 was equal to or greater than the fair market value of Rivian's stock at the date of grant. The Company generally estimates the grant-date fair value of stock options using a Black-Scholes option pricing model. Expected volatility is based on a weighted-average of historical volatility rates of peer companies and the Company’s implied volatility. The dividend yield is estimated based on the rate at which the Company expects to provide dividends. The risk-free rate is based on the United States Treasury yield curve for zero-coupon Treasury notes with maturities approximating the respective expected term of the stock option. The expected term represents the average time the Company’s stock options are expected to be outstanding. As the Company’s stock options were not exercisable prior to the IPO in November 2021, there is not sufficient historical exercise data to provide a reasonable basis upon which to estimate expected term. As a result, the expected term is estimated based on the weighted-average midpoint of expected vest date and expiration date.

The weighted-average assumptions used in the Black-Scholes option pricing model for stock options granted were as follows:


	Years Ended December 31,
	2022		2023		2024
Volatility	55.5	%	61.4	%	62.5	%
Dividend yield	—	%	—	%	—	%
Risk-free rate	2.9	%	4.0	%	4.2	%
Expected term (in years)	6.8		6.3		6.3

The grant-date fair value of RSUs is equal to the closing trading price of the Company‘s common stock on the grant date.

Employee Stock Purchase Plan

The ESPP is designed to allow eligible employees to purchase shares of Class A common stock at a 15% discount, generally at intervals of approximately six months, with their accumulated payroll deductions. The number of shares of Class A common stock authorized for sale under the ESPP is equal to the sum of (i) 22 million shares of Class A common stock and (ii) an annual increase on the first day of each year beginning on January 1, 2022 and ending on January 1, 2031, equal to the lesser of (A) 1% of the aggregate number of shares of all classes of common stock outstanding on the last day of the immediately preceding year and (B) such smaller number of shares of Class A common stock as determined by the board of directors; provided, however, that no more than 185 million shares of Class A common stock may be issued under the ESPP. As of December 31, 2024, 36 million shares were reserved for issuance under the ESPP.