Rivian confirms EV 2022 production target despite supply issues

Rivian, an electric vehicle maker that unveiled to the public last year with big ambitions to take Tesla and others, said Wednesday that supply chain issues hampered it in the first quarter, but it stood above production forecasts for this year.

Shares of the company have fallen more than 80 percent this year as investors worried about its prospects. Prices rose in after-hours trading on Wednesday as most of the quarterly results met expectations.

Rivian details outstanding problems in obtaining semiconductors and other components. And since the end of March, the company said, shortages have forced “shutdowns for longer than expected, resulting in about a quarter of planned production time due to supplier constraints.”

Rivian said he expects to have 25,000 cars this year, an estimate made last month. March. Without supply restrictions, the company said in March it could produce twice as many.

So far, it is worth 5,000. RJ Scaringe, Rivian’s chief executive, said in a call with analysts after the quarterly results: “We have done all of this in the most challenging operating environment in decades.”

All car companies are facing supply chain constraints, but small companies like Rivian that lack long-term relationships with suppliers may find it difficult to cope with. Difficulties pose a risk to new automakers, who may have trouble gaining a significant share of the electric vehicle market before more established companies introduce more products in the coming years.

Rivian reported a net loss of $ 1.6 billion in the first quarter from 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 huge losses because it is spending large sums of money to expand production of its three vehicles: trucks designed primarily for leisure seekers, sports cars and delivery vans for Amazon, early investors in Rivian and major shareholders.

The company said it had more than 90,000 orders for its trucks and SUVs, compared with about 83,000 in March.

Amazon has ordered 100,000 vans, but Rivian is hesitant to say how much it can ship. On Wednesday, it said only that it “accelerates production and delivery.” In a statement to analysts, Mr Scaringe said he expects vans to account for about a third of the 25,000 vehicles estimated for 2022 production.

In many ways, Rivian epitomizes sharp changes to bearishness in the stock market this year.

In November, investors entered into an initial public offering, in which the company raised $ 13.5 billion, and its shares rose, briefly, giving Rivian a market capitalization almost equal to that of Ford Motor Company and General Motors.

But the stock has fallen this year after the company cut its production target. An 80 per cent drop in Rivian shares was more than a 31 per cent drop in Tesla stock in the same period and a 38 per cent drop for Ford, which is introducing its own electric car.

Rivian manufactures vehicles in Normal, Ill., And plans another plant in Georgia. Construction and assembly lines require large sums of cash, which is why new car companies can run into serious financial difficulties if production delays and sales fall. Even Tesla, which sells more electric cars than any other company, sometimes finds itself underfunded.

In the first quarter, Rivian spent $ 1.45 billion in cash on its business and investment in new facilities and equipment, more than the $ 800 million it spent in the first quarter of 2021. The company had $ 16.4 billion 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 stock reduced the value of the stake held by the largest shareholder. Amazon’s 18 percent stake was valued at $ 3.2 billion, down from $ 16.8 billion at the beginning of the year. Ford, another major investor, sold some of its shares on Monday, and its remaining shares were valued at $ 1.9 billion. It will be worth $ 9.7 billion by the end of last year.

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