All-electric vehicle manufacturer Rivian Automotive Inc. has had its investors quite satisfied thus far – until last week. Recently released quarterly earnings and slow production have caused stock to crash, and while analysts are remaining positive, the company’s operation woes are now evident. Rivian has, however, begun deliveries of its R1S SUV and has announced it is making moves to increase the production of its R1T pickup truck and its electric Amazon delivery vans. Let’s take a look at Rivian’s updates from last week.
Significant Quarterly Loss
Rivian competitor Tesla’s CEO Elon Musk previously stated that “high production and breakeven cash flow would be the true test for Rivian,” and that still seems to be the case. Shares of Rivian tanked almost 15% last Friday after the company posted a $1.2 billion loss for the quarter. The adjusted net loss totaled $776 million.
During a conference call, Rivian executive R.J. Scaringe commented on the loss, stating that “launching and ramping production of three different vehicles within a few months is an incredibly tough challenge.” He also said other factors like the labor shortage, the pandemic, and “short-term” issues regarding EV battery modules contributed to the loss. He added that Rivian’s solution is to ramp up production and get its vehicles made ahead of schedule.
R1S Deliveries Begin and Delays Continue
While deliveries of the R1T pickup truck began three months ago, Rivian announced it has delivered its first two R1S SUVs. The company did not confirm who they were delivered to, but its production and deliveries have been slow in general, which analysts say is normal for new auto manufacturers. Last month, Rivian announced deliveries would be delayed into 2022, and some buyers have reported their vehicles will not be delivered until the third quarter of next year – a drastic delay from the initial delivery date of January 2022.
|Related: Rivian stock falls as R1S deliveries pushed back by months and Ford collab dissolves|
Rivian has not avoided falling victim to the supply chain crisis, as it will not meet its goal of making 1,200 vehicles by the end of the year. Instead, it announced it would be “a few hundred vehicles short,” partially caused by disruptions in the ability to get required parts for the trucks and SUVs.
Slow production of R1S and R1T models may also be hindered by Rivian prioritizing Amazon delivery vans instead, as it previously signed an agreement to produce 100,000 of them and planned to start delivering them before the end of the year.
Demand is reportedly still increasing, though, with Rivian announcing that combined orders for R1S and R1T models increased from 55,400 in October to 71,000 by the middle of December.
In its recent letter to shareholders, Rivian noted it has plans to build another manufacturing plant in the state of Georgia, which it stated: “represents the largest economic development deal in Georgia’s history.” The new facility is expected to produce 400,000 vehicles per year and employ over 7,500 people. Current plans indicate vehicle production will start at the new facility in 2024, and Rivian has said it hopes to have built a total of one million vehicles or more by 2030.
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