Electric vehicle maker Rivian halves 2022 production outlook

Shares in Amazon-backed electrical automobile maker Rivian slid late on Thursday after the corporate warned provide chain issues would halve its manufacturing functionality to 25,000 items this yr.

Rivian instructed buyers the provision chain can be a “elementary limiting issue” and predicted its manufacturing potential had dropped from what may have been 50,000 autos in 2022.

The corporate, based in 2009, has produced 1,410 autos from the beginning of the yr till March 8. Rivian has 83,000 pre-orders for its pick-up and SUV fashions.

In 2021’s fourth quarter, its first as a public firm, the corporate booked income of $54mn from the supply of 909 autos. Analysts had been hoping for income of $60mn, in keeping with consensus information from S&P Capital IQ. Rivian’s internet loss for the interval was $2.5bn, whereas it had $18.4bn money readily available.

Within the present quarter, chief government RJ Scaringe stated the corporate had suffered “a number of headwinds” in manufacturing. They included: “a deliberate 10-day shutdown to fine-tune our manufacturing strains, vital provide chain limitations, a big spike in Covid-19 instances possible attributable to the Omicron variant, and extreme winter climate in central Illinois,” the place Rivian has its first manufacturing unit.

Trying forward, Scaringe stated that getting battery modules was a problem, in addition to a “small variety of components for which the provider isn’t ramping on the similar charge as our manufacturing strains”.

In buying and selling after markets had closed, Rivian’s inventory value fell by virtually 13 per cent to $35.87, down by greater than half from the $78 value at its preliminary public providing in November.

The corporate’s shares first faltered in January when Amazon introduced it will buy electrical vehicles for its fleet from Stellantis, the proprietor of Chrysler.

Whereas the total dimension of the order was not disclosed, Stellantis chief government Carlos Tavares instructed the Monetary Instances that estimates of “tens of hundreds” was “extraordinarily conservative” — suggesting the order was on par with Rivian’s present deal to offer the ecommerce large with 100,000 autos. Amazon holds an virtually 18 per cent stake in Rivian.

In a name with buyers on Thursday, Scaringe stated the corporate was growing manufacturing of Amazon’s vans, however he didn’t anticipate a “vital” variety of autos to be a part of the fleet till this yr’s second quarter on the earliest.

Buyers had been additional shaken earlier this month when Rivian introduced a value enhance for its flagship electrical pick-up truck and SUV, one which might have affected a lot of its pre-orders, blaming rising provide chain prices.

The rise various relying on automobile configuration, however represented an roughly 17 per cent rise for its pick-up truck and 20 per cent for its SUV.

“I’ve made a variety of errors since beginning Rivian greater than 12 years in the past, however this one has been probably the most painful,” wrote Scaringe in a follow-up letter asserting that the corporate wouldn’t impose the worth enhance on prospects who had pre-ordered autos. “I’m actually sorry and dedicated to rebuilding your belief.”

The episode has prompted a shareholder lawsuit, filed Monday, which accused the corporate of withholding details about the worth enhance.