Rivian, the electric vehicle maker that went public last year with high ambitions of tackling Tesla and others, said on Wednesday that supply chain problems hindered it in the first quarter, but it met its forecasts. production for this year.
Shares in the company fell more than 80% this year as investors got nervous about its prospects. The price rose 7% in after-hour trading Wednesday as quarterly results largely met expectations.
Rivian detailed persistent problems in obtaining semiconductors and other parts. And since the end of March, the company said, shortages have forced it “to stop production for longer periods than expected, resulting in the loss of about a quarter of planned production time due to supplier constraints.”
Rivian said it planned to produce 25,000 vehicles this year, a forecast made in March. Without supply constraints, the company said in March it could produce twice as much.
Production so far amounts to 5,000. “We did all of this in one of the toughest operating environments in decades,” said RJ Scarringe, Rivian’s chief executive, during a call with analysts following the release of the quarterly results.
All automakers face supply chain constraints, but smaller ones like Rivian that lack long-term supplier relationships may have a hard time making it. The difficulties pose a greater risk to newer automakers, who may struggle to capture a significant share of the electric vehicle market before more established companies introduce dozens of products in the coming years.
Given such hurdles, investors will be watching for any signs that Rivian may not be up to its 2022 production target. “It’s still achievable, but it could be a stretch,” said Garrett Nelson, an analyst at research firm CFRA. dealing with Rivian. He added that the collapse in the value of Rivian’s stock market could make it an acquisition target for a company that wanted to enter the electric vehicle market.
Rivian posted a net loss of $ 1.6 billion in the first quarter on sales of just $ 95 million. In the first quarter of last year, Rivian posted no sales and a loss of $ 414 million. The company is reporting large losses because it is spending large sums to increase production of its three vehicles: a truck designed primarily for recreation, an SUV and a delivery van from Amazon, one of Rivian’s first investors and a major shareholder. .
The company said it received more than 90,000 orders for its truck and SUV, up from about 83,000 in March.
Amazon has ordered 100,000 delivery vans, but Rivian has been reluctant to say how many it has shipped. On Wednesday, he only said that “he was increasing production and deliveries”. During the phone call with analysts, Scaring said he expects vans to make up about a third of the 25,000 vehicles in the 2022 production forecast.
In many ways, Rivian embodies the sharp move to the downside in the stock market this year.
In November, investors piled up in its initial public offering, in which the company raised $ 13.5 billion, and its shares then shot up, briefly giving Rivian a stock market value almost as large as the stock market. Ford Motor and General Motors combined.
But the stock plummeted this year after the company cut its production targets. The 80 percent drop in Rivian’s stock is much more marked than a 31 percent drop in Tesla’s stock over the same period and a 38 percent drop for Ford, which is introducing its own electric truck.
Rivian manufactures vehicles in Normal, Illinois, and plans another factory in Georgia. Building and operating assembly lines requires huge amounts of money, which is why new carmakers can find themselves in dire financial straits if production delays and sales aren’t up to par. Tesla, which sells more electric cars than any other company, has also found itself strapped for funds at times.
In the first quarter, Rivian used $ 1.45 billion in cash to run its business and invest in new facilities and equipment, far more than the $ 800 million it consumed in the first quarter of 2021. The company had 16.4 billion. dollars in cash on its balance sheet at the end of the first quarter, down from $ 18.1 billion at the end of last year.
The decline in Rivian shares reduced the value of the stakes held by its largest shareholders. Amazon’s 18% stake is worth $ 3.2 billion, down from $ 16.8 billion at the beginning of the year. Ford, another early investor, sold some of its stock on Monday and its remaining stake is worth $ 1.9 billion. It would have been worth $ 9.7 billion at the end of last year.
Rivian said it has received more than 10,000 orders for its truck and SUV after raising prices in March. Those orders had an average price of over $ 93,000, the company added.
But as Rivian’s vehicles are sold at relatively high prices, analysts have wondered how much demand there might be if inflation continues to consume household spending power. “It remains to be seen how much appetite consumers have for a Rivian price tag,” said Mr. Nelson.