Rivian has blamed the ongoing impact of the Covid-19 pandemic and shortages of key components for production halts that have crippled its planned output so far this year.
“Supply chain continues to be the bottleneck of our production,” said the company in its earnings letter to shareholders. Semiconductor makers are struggling to keep up with increased demand for goods needing computer chips, affecting many industries.
This has compounded shutdowns and delays in production in 2021 due to the pandemic. “Since March 31, 2022, we have been forced to stop production …. resulting in approximately a quarter of the planned production time being lost due to supplier constraints,” said the carmaker.
Rivian, which makes the R1T electric pickup (ute) and R1S electric SUV, burst onto the tech-focussed Nasdaq in 2021 as the sixth most valuable carmaker with a share value of $US129.95.
Rivian’s value has plummeted since then, down to just $US20.60 last close, despite a brief rebound after the results were released this week. Having revised its annual production outlook from 50,000 down to 25,000, Rivian made 2,553 vehicles and delivered just 1,227 vehicles in the first quarter.
EV startup financing woes
Rivian’s first-quarter earnings report revealed on Wednesday (US time) showed that it generated $US95 million ($A137 million) in revenue. However, it also reported a huge $US1.59 billion ($A2.3 billion) loss.
Rivian is not the only EV startup with big losses this quarter. Like Tesla before them, Lucid, Nikola, Fisker, Canoo and Lordstown have all burned through cash or indicated they need more to keep going as they seek to ramp up production.
Lucid has started making its Air series and has burnt through $US600,000 doing so. It says it has 30,000 orders on its books but in the first quarter delivered just 360 vehicles. With a production capacity of 12,000-14,000 a year there is a more than two-year wait for current orders.
Nikola started making electric semi-trailers at the beginning of May, and was $US151 million out of pocket in the first quarter. With $385 million cash in hand at the end of the quarter and another $200 million investment under the belt, it says it will deliver 300-500 electric semis by the end of 2022.
Fisker is singular in that it has a production deal with Magna International and does not need to spend money on factories. With plans to start production in November, it has reported a $US122 million net loss in the first quarter.
Meanwhile, Lordstown says it needs $US200 million more before it can start producing vehicles. Canoo is looking for $US600 million more to achieve volume production.
Production ramp struggles
Rivian’s struggles are not unexpected. Even without a pandemic and supply chain challenges, Tesla struggled to ramp up production of its Model 3.
Tesla boss Musk weighed in on Rivian’s woes at the Financial Times Car of the Future conference on Tuesday.
“What I see with some of these car companies are they are jumping into the deep end and create a high volume vehicle when they have never made a vehicle before,” said Musk.
“This is not practising your (sport) and then going to the Olympics … this is crazy.”
For its part, Rivian says it expects it will achieve its production outlook of 25,000 vehicles for the latest fiscal year.
Also, it is already looking forward to a second production facility. In early May, the EV maker announced it has secured $US2 billion for a new factory in Georgia powered by solar.
It said it has “optimised its product roadmap” and operating expenses so it can launch the new factory in 2025. The deal with Georgia is said to be the largest in the state’s history and offers Rivian total incentives of $US1.5 billion.
Bridie Schmidt is associate editor for The Driven, sister site of Renew Economy. She has been writing about electric vehicles since 2018, and has a keen interest in the role that zero-emissions transport has to play in sustainability. She has participated in podcasts such as Download This Show with Marc Fennell and Shirtloads of Science with Karl Kruszelnicki and is co-organiser of the Northern Rivers Electric Vehicle Forum. Bridie also owns a Tesla Model 3 and has it available for hire on evee.com.au.