Rivian, the electric vehicle maker that went public last year with big ambitions to take on Tesla and others, said on Wednesday that supply chain issues had hampered it in the first quarter but stood by its production forecast for this year.
The company’s shares have fallen more than 80 percent this year as investors have become nervous about its prospects. The price rose in after-hours trading on Wednesday as quarterly results largely met expectations.
Rivian detailed persistent problems in sourcing semiconductors and other parts. And since the end of March, the company said, shortages have forced it to “halt production for longer periods than anticipated, resulting in the loss of about a quarter of planned production time due to product limitations.” providers”.
Rivian said it expects to build 25,000 vehicles this year, a forecast it made in March. Without the supply constraints, the company said in March that it could produce twice as much.
Production so far amounts to 5,000. “We’ve done all of this in one of the most challenging operating environments in decades,” Rivian CEO RJ Scaringe said in a call with analysts after the quarterly results were released.
A critical year for electric vehicles
As the overall automotive market stagnates, the popularity of battery-powered cars is skyrocketing around the world.
All auto companies face supply chain constraints, but smaller ones like Rivian, which lack long-term relationships with suppliers, may have a harder time dealing with them. The difficulties pose a greater risk to newer automakers, which may struggle to gain a significant share of the electric vehicle market before more established companies introduce dozens of products in the coming years.
Rivian reported a $1.6 billion net loss in the first quarter on sales of just $95 million. In the first quarter of last year, Rivian had no sales and a loss of $414 million. The company is reporting big losses because it is spending large sums to ramp up production of its three vehicles: a truck designed primarily for leisure activities, a sport utility vehicle and a delivery van for Amazon, an early investor in Rivian and one of the main shareholders.
The company said it had more than 90,000 orders for its truck and SUV, compared with 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, she said only that she was “increasing production and deliveries.” On the call with analysts, Scaringe said she expected trucks to make up about a third of the 25,000 vehicles in the 2022 production forecast.
In many ways, Rivian epitomizes the sharp turn to bear in the stock market this year.
In November, investors flocked to its initial public offering, in which the company raised $13.5 billion, and then its shares soared, briefly giving Rivian a stock market value that was almost as great as Ford’s. Motor and General Motors combined.
But the shares have plunged this year after the company lowered its production targets. The 80 percent drop in Rivian shares is much steeper than a 31 percent drop in Tesla shares over the same period and a 38 percent drop for Ford, which is introducing its own electric truck.
Rivian makes vehicles in Normal, Ill., and plans another factory in Georgia. Building and operating assembly lines requires huge amounts of cash, which is why new car companies can find themselves in dire financial straits if production is delayed and sales fall short. Even Tesla, which sells more electric cars than any other company, has sometimes run out of funds.
In the first quarter, Rivian used $1.45 billion of cash to run its business and invest in new facilities and equipment, far more than the $800 million it used in the first quarter of 2021. The company had $16.4 billion of cash on its balance sheet in at the end of the first quarter, down from $18.1 billion at the end of last year.
Rivian’s stock decline sharply reduced the value of the holdings held by its major shareholders. Amazon’s 18 percent stake is worth $3.2 billion, down from $16.8 billion at the start of the year. Ford, another early investor, sold some of his shares on Monday and his remaining stake is worth $1.9 billion. It would have been worth $9.7 billion at the end of last year.