Rivian, which has had a tough run on the stock market after a successful IPO, cast a further shadow over its outlook on Thursday, signaling that supply chain issues could significantly limit its production of electric vehicles.
The company said it would only be able to produce 25,000 vehicles this year, half the number it could have produced if the supply chain were not a “fundamental limiting factor”.
Issues with securing parts and materials affect all automakers, but they hit Rivian after it has sold very few vehicles and faces competition from big companies.
“Like the rest of the industry, we expect supply chain challenges to persist well into 2022,” Rivian said in a letter to shareholders detailing its financial results for the past year. In a call with Wall Street analysts on Thursday, RJ Scaringe, Rivian’s chief executive, said the issues centered on a “small number of coins.”
Rivian makes a premium truck – designed more as an off-road vehicle than a cargo hauler – and a sport utility vehicle. Rivian also has a deal to make electric delivery vans for a big shareholder, Amazon, which has ordered 100,000. When Rivian went public, investors saw it as a possible competitor to Tesla, the biggest automaker. electric vehicles.
A critical year for electric vehicles
The popularity of battery-powered cars is skyrocketing around the world, even as the global car market stagnates.
Rivian said as of Tuesday it had produced 1,410 vehicles this year, a small fraction of the 83,000 orders submitted. The company did not say how many vans it had delivered to Amazon this year.
Stock analysts said Rivian’s report was disappointing and its stock plunged 12% in after-hours trading following the company’s earnings release.
“It’s a very frustrating name,” said Wedbush Securities analyst and managing director Dan Ives, “and these results show that Rivian still has a lot of wood to cut.” He said he had originally expected Rivian to manufacture 40,000 vehicles this year, well above the company’s latest forecast, adding that analysts expected orders for Rivian vehicles to be higher. to the reported 83,000.
Along with other electric vehicle makers, Rivian is grappling with rising prices for lithium and nickel, which are used to make batteries. Russia is a big exporter of nickel, and fears of a tight supply of the metal have driven its price up.
“We’re hoping the inflation we’ve seen very recently with nickel prices will be short-lived,” Scaringe said.
Rivian went public in November, raising $13.5 billion — money it will need to expand its plant in Normal, Illinois, and build one in Georgia. The stock initially soared, giving Rivian a higher market value than General Motors, but it now trades at around half its IPO price.
Shares have fallen in recent months after Rivian said it faced production issues, then fell further in a customer relations debacle over pricing. Rivian said last week that it would raise prices for its vehicles, even those already on order. Faced with a backlash, Rivian backtracked and only applied the increases to new orders, and Mr Scaringe apologized in a letter to customers.
Prior to the price change, Rivian’s truck and car could cost as much as $83,000. After the introduction of new offers, the price could reach $95,000.
Rivian had revenue of $55 million last year and a net loss of $4.7 billion. It used $4.4 billion in cash to run its business and invest in new plant and equipment, and had $18 billion in cash on its balance sheet at the end of last year. The company said it expected a loss this year of $4.75 billion based on a measure of earnings known as adjusted earnings before interest, taxes, depreciation and amortization.
Mr Ives said investors might also balk at high costs, especially if they expected higher order numbers. “The cost overruns are way bigger than the street expected,” he said. “If pre-orders were on pace, the street would agree.”
The executive overseeing Rivian’s operations left last year as the company tried to ramp up production. On Thursday, Mr Scaringe said the company would announce a new chief operating officer next week.