Rivian announced a significant milestone today, reporting its first “positive gross profit” in its fourth quarter earnings for 2024. It was a sign that the struggling company’s efforts to slash costs through the gut overhaul of its R1 electric vehicles is starting to yield some positive results. But dark clouds loom ahead, as the company said it expects to sell fewer vehicles in 2025 than last year.

Rivian reported $170 million in positive gross profits, which includes production and sales but does not factor in other expenses, for the three-month period that ended December 31, 2024. That was based on $1.7 billion in revenues. The company said its net loss for the fourth quarter was $743 million, as compared to $1.5 billion in net losses in the same period in 2023.

Rivian earned $4.5 billion in revenue for the full year 2024, based on the delivery of 51,579 vehicles. It record a net loss of $4.7 billion, compared to $5.4 billion in 2023. Rivian cited increased revenue from the sale of regulatory credits to other automakers, which is also a primary revenue driver for Tesla. The company said it saw a $260 million increase in regulatory credit sales in the fourth quarter year over year.

“Our variable cost reductions were driven by the launch of our second generation R1 vehicles, which included significant engineering design optimizations, supply chain driven cost reductions, and improvement in commodity costs,” the company said in a note to shareholders.

For the year ahead, Rivian said it expects to sell 46,000-51,000 vehicles, citing “changes to government policies and regulations, and a challenging demand environment.” Despite this, the company says it expects to achieve “modest gross profit” for the full year.

“While uncertainties persist, we remain focused on executing against our key value drivers and are confident in electrifying the world in the long term,” Rivian said. “Our guidance represents management’s current view on potential adjustments to incentives, regulations, and tariff structures.”

Rivian is certainly facing tougher months ahead, with the Trump administration promising to apply tariffs to a range of auto parts, as well as rolling back Biden-era EV incentives. On the plus side, the company has a $5.8 billion joint venture with Volkswagen on software and vehicle development.