Rivian, the electric-vehicle company that went public in 2021 with great hopes to compete against Tesla and others, said on Wednesday that supply-chain issues hampered it in the first quarter, but that it was sticking to its output forecast for this year.
The company’s stock has dropped more than 80% in 2022 as investors have become concerned about its prospects. On Wednesday (11 May), in after-hours trading, the stock rose 7% as the quarterly earnings largely met expectations.
Rivian detailed the ongoing difficulties in acquiring semiconductors and other components. The shortages have prompted the company to “halt production for longer times than anticipated,” according to the corporation, resulting in “roughly a quarter of the intended production time being wasted owing to supplier restrictions.”
Rivian forecasted 25,000 vehicles this year, up from 20,000 in March. The company stated in March that it may produce twice as many without the supply constraints. So far, 5,000 units have been produced. Rivian’s chief executive, R.J. Scaringe, remarked in a conference call with analysts after quarterly earnings were disclosed, “We have done all of this in one of the toughest operating situations in decades.”
Smaller car companies, such as Rivian, which lack long-term relations with suppliers, may find it more difficult to cope. The difficulties are more of a concern for newer carmakers, who may struggle to gain a significant proportion of the electric vehicle (EV) market before more proven companies launch a slew of products in the years ahead.
Given these challenges, investors will be looking for signs that Rivian will miss its 2022 production goal. “It’s still possible, although it could be a stretch,” said Garrett Nelson, a Rivian analyst at CFRA. He went on to say that Rivian’s stock price drop could end up making it a takeover aim for a company looking to enter the electric vehicle market.
Rivian had a $1.6 billion net loss during the first quarter on revenues of only $95 million. Rivian had no revenues and a $414 million loss during the first quarter of the year 2021. The firm is losing a lot of money because it is spending a lot of money to ramp up production of its 3 vehicles: a truck for a sport utility vehicle (SUV), leisure pursuits, and a delivery van for Amazon, which was an early investor as well as a major shareholder in Rivian.
According to the company, it has received over 90,000 orders for its SUV and truck, up from around 83,000 in March. Amazon did order 100,000 delivery vans, although Rivian has refused to say how many have been delivered. It only said on Wednesday that it was “ramping up production and deliveries.” On a conference call with analysts, Mr. Scaringe predicted that vans would account for approximately a third of the 25,000 vehicles planned for production in 2022.