EV maker Rivian stands by production target despite supply-chain snarls
By Akash Sriram and Tina Bellon
(Reuters) -Rivian Automotive Inc on Wednesday reaffirmed its annual manufacturing forecast of 25,000 models, saying ongoing provide chain disruptions and materials prices prevented the electrical car maker from reaching its unique goal of fifty,000 automobiles.
The Irvine, California-based firm’s shares rose 5% in prolonged buying and selling after closing the day down 9.6%.
“We stay centered on ramping manufacturing all through 2022. We consider that the availability chain constraints will proceed to be the limiting issue of our manufacturing,” Rivian mentioned in a letter to shareholders, including that it might have the ability to double its annual output absent provide constraints.
Rivian had halved its 2022 forecast in March because it struggled to safe the chips wanted to make its R1T pickup truck, R1S SUV and electrical supply van for Amazon.com Inc.
Traders have been upset with the corporate’s progress, and Rivian shares got here underneath rising stress this week as the corporate’s post-IPO lockup interval expired. Ford Motor Co offered eight million Rivian shares for $124 million, a Tuesday submitting confirmed.
At round $18.5 billion, Rivian’s market valuation has plummeted because it went public in November. The corporate is now valued roughly consistent with the $17 billion it holds in money and money equivalents.
That made Rivian a possible acquisition goal by Amazon, its second-largest shareholder, “or a standard automaker in search of a bolt-on EV acquisition,” CFRA Analysis analyst Garrett Nelson mentioned.
Rivian, which at present operates a single plant in Illinois, is planning to speculate $5 billion to construct a brand new manufacturing plant in Georgia. An organization spokeswoman final week mentioned Rivian aimed to open that plant in late 2024, however Rivian on Wednesday mentioned it was a 2025 launch date.
Rivian mentioned it had sufficient money available to open the Georgia manufacturing facility. That was a “huge plus,” mentioned Redburn analyst Charles Coldicott, including that analysts had anticipated the corporate to lift further capital in 2024.
Rivian is one in all a number of EV startups going through a crowded area of rivals, together with market chief Tesla Inc. Different giant, incumbent automakers have pledged billions in investments on new expertise and EV vegetation.
Whereas Rivian is sitting on a bigger money pile than a lot of its smaller rivals, the corporate’s operations are utilizing up important capital. Working actions within the first quarter burned round $1 billion in web money, and Rivian final quarter mentioned it continued to count on destructive gross margins all through 2022.
Rivian delivered 1,227 automobiles within the first quarter, up from 909 models within the earlier quarter.
It mentioned it has obtained greater than 90,000 pre-orders in the USA and Canada for its R1S SUV and R1T pickup truck as of Might 9.
The corporate reported first-quarter income of $95 million, beneath analysts’ estimates of $130.5 million, in line with Refinitiv information.
Its web loss widened to $1.59 billion from $414 million a 12 months earlier.
(Reporting by Akash Sriram in Bengaluru; Modifying by Devika Syamnath, Bernard Orr and Invoice Berkrot)
