Rivian confirms EV production target for 2022 despite supply issues


Electric car maker Rivian, which went public last year with big ambitions to acquire Tesla and others, said Wednesday it was hampered in the first quarter by supply chain problems. However, the production forecast for this year remained the same.

The company’s stock has fallen more than 80% this year as investors become uneasy about the company’s outlook. In after-hours trading on Wednesday, prices rose as quarterly results largely met expectations.

Rivian detailed the ongoing challenges in obtaining semiconductors and other components. And from the end of March, supply shortages have resulted in “production shutdowns for longer than expected, resulting in the loss of about a quarter of planned production time due to supplier constraints,” the company said.

Rivian expects to produce 25,000 vehicles this year, a forecast for March. Without supply constraints, the company said it could produce double that in March.

So far, the total output is 5,000. “We’ve been doing all of this in one of the toughest operating environments in decades,” Rivian CEO RJ Scaringe said in a call with analysts after the quarterly results were released.

All automakers face supply chain constraints, but smaller companies like Rivian, which lack long-term relationships with suppliers, may find it more difficult to cope. These difficulties pose a greater risk to new automakers who may struggle to gain a significant share in the electric vehicle market before more incumbents launch dozens of products in the next few years.

Rivian reported a net loss of $1.6 billion in the first quarter on revenue of $95 million. In the first quarter of last year, Rivian had no sales and posted a loss of $414 million. The company is reporting heavy losses as it is spending huge sums to expand its production of trucks, sport utility vehicles and delivery vans from Amazon, designed primarily for recreational activities, and three vehicles that Rivian is an early investor and major shareholder of.

The company said orders for trucks and SUVs jumped from about 83,000 in March to more than 90,000.

Amazon ordered 100,000 delivery vans, but Rivian was reluctant to say how many vans were shipped. He only said on Wednesday that he was “increasing production and shipping.” In a call with analysts, Scaring said he expects vans to account for roughly a third of the 25,000 vehicles in production forecasts for 2022.

In many ways, Rivian exemplifies a sharp decline in the stock market this year.

In November, investors flocked to the company’s $13.5 billion initial public offering (IPO), after which the stock soared for a short time, making Rivian’s stock market value nearly equal to Ford Motor and General Motors combined.

But this year, the stock has plummeted as the company lowered its production target. Rivian’s fall of 80% is even steeper than Tesla’s 31% fall and Ford, which introduced its own electric truck, fell 38% over the same period.

Rivian builds vehicles in Normal, Illinois, and plans another plant in Georgia. Because building and operating an assembly line requires huge amounts of cash, new car companies can face serious financial difficulties in case of production delays and lack of sales. Even Tesla, which sells more electric vehicles than any other company, finds it sometimes short of funds.

In the first quarter, Rivian spent $1.45 billion to run its business and invest in new facilities and equipment, far more than the $800 million it spent in the first quarter of 2021. It decreased from $18.1 billion at the end of last year to the end of the first quarter.

The decline in Rivian stock reduced the value of the stake held by the largest shareholder. Amazon’s 18% stake fell to $3.2 billion from $16.8 billion at the beginning of the year. Another early investor, Ford, sold some shares on Monday, with the remaining stake worth $1.9 billion. At the end of last year, it was worth $9.7 billion.

Leave a Comment