Rivian Sticks With 2022 EV Production Target Despite Supply-Chain Snags
Rivian Automotive Inc. jumped the most in almost six months after reaffirming its plan to build 25,000 electric vehicles this year despite lingering supply-chain snags.
Rivian Automotive Inc. jumped the most in almost six months after reaffirming its plan to build 25,000 electric vehicles this year despite lingering supply-chain snags.
The company built 7,363 vehicles in the third quarter, up 67% from the prior period, according to a statement late Wednesday. Rivian, which has a plant in Normal, Illinois, said that demand remains strong and preorders for its R1 vehicles climbed to 114,000 from about 98,000 in the second quarter.
Rivian also delayed the launch of its R2 platform by one year, to 2026, as it reconsiders capital allocation while boosting production rates for the existing vehicle lines. The company has been looking for cost-saving opportunities through steps such as layoffs and a joint production agreement with Mercedes-Benz AG.
“Rivian’s results are benefiting from both thrifting and from a throttling back of certain investments, including the push-out of spending to support the more mass-market R2 family of vehicles,” Ryan Brinkman, an analyst with JPMorgan Chase, said in a note.
Rivian’s shares jumped 14% at 9:41 a.m. Thursday in New York after a gain of 18%, the biggest intraday advance since May 12. The stock fell 73% this year through Wednesday’s close, after its November 2021 listing was the sixth biggest in US history.
What Bloomberg Intelligence Says:
Production of almost 7,400 vehicles, up 67% sequentially, puts the year-to-date total at 14,300, requiring 45% growth over 3Q to reach the 25,000 annual target. Pressure from rising battery costs is unlikely to ease, compromising an already strained margin outlook.
— Kevin Tynan, transportation analyst
The reaffirmed guidance gave investors a measure of relief after Rivian stumbled earlier in the year with production issues. The company, which counts Amazon. com Inc. as a major backer and customer, is trying to scale up to take on EV market leader Tesla Inc.
“The demonstrated production rates within our Normal factory continue to give us confidence in our systems, equipment and team members’ ability to ramp our production lines,” the Irvine, California-based company said in the statement. “However, we believe that supply-chain constraints will continue to be the limiting factor of our production.”
The gains came even as the company reported quarterly revenue of $536 million, which was below analysts’ average expectation of $561 million.
Rivian Automotive Inc. jumped the most in almost six months after reaffirming its plan to build 25,000 electric vehicles this year despite lingering supply-chain snags.
Rivian Automotive Inc. jumped the most in almost six months after reaffirming its plan to build 25,000 electric vehicles this year despite lingering supply-chain snags.
The company built 7,363 vehicles in the third quarter, up 67% from the prior period, according to a statement late Wednesday. Rivian, which has a plant in Normal, Illinois, said that demand remains strong and preorders for its R1 vehicles climbed to 114,000 from about 98,000 in the second quarter.
Rivian also delayed the launch of its R2 platform by one year, to 2026, as it reconsiders capital allocation while boosting production rates for the existing vehicle lines. The company has been looking for cost-saving opportunities through steps such as layoffs and a joint production agreement with Mercedes-Benz AG.
“Rivian’s results are benefiting from both thrifting and from a throttling back of certain investments, including the push-out of spending to support the more mass-market R2 family of vehicles,” Ryan Brinkman, an analyst with JPMorgan Chase, said in a note.
Rivian’s shares jumped 14% at 9:41 a.m. Thursday in New York after a gain of 18%, the biggest intraday advance since May 12. The stock fell 73% this year through Wednesday’s close, after its November 2021 listing was the sixth biggest in US history.
What Bloomberg Intelligence Says:
Production of almost 7,400 vehicles, up 67% sequentially, puts the year-to-date total at 14,300, requiring 45% growth over 3Q to reach the 25,000 annual target. Pressure from rising battery costs is unlikely to ease, compromising an already strained margin outlook.
— Kevin Tynan, transportation analyst
The reaffirmed guidance gave investors a measure of relief after Rivian stumbled earlier in the year with production issues. The company, which counts Amazon. com Inc. as a major backer and customer, is trying to scale up to take on EV market leader Tesla Inc.
“The demonstrated production rates within our Normal factory continue to give us confidence in our systems, equipment and team members’ ability to ramp our production lines,” the Irvine, California-based company said in the statement. “However, we believe that supply-chain constraints will continue to be the limiting factor of our production.”
The gains came even as the company reported quarterly revenue of $536 million, which was below analysts’ average expectation of $561 million.
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