Colossal losses, supply problems, and a production line that is idling: the young manufacturer Rivian has a series of disappointments. The brand is forced to lower its production target for the year 2022.
While the first models were to leave the chains initially in 2020, it took until September 2021 for the first deliveries to take place. The brand’s order book is however full with more than 83,000 pre-orders just for the R1 T (pickup) and R1 S (SUV). Except that the production tool, the supply difficulties (in semiconductors and raw materials) and the health context have largely hampered the ambitions of the start-up.
Rivian was only able to deliver 1,015 vehicles at the end of 2021, for an estimated 1,200. Its forecasts are also revised downwards for the year 2022, now counting on 25,000 vehicles produced by the end of the year. The Illinois plant should however be able to produce up to 130,000 vehicles, and even up to 200,000 units by 2023, according to the brand’s announcements. Amazon, which has invested heavily in the company, expects 100,000 electric delivery trucks ordered from the start-up. The pressure is important.
The price increase that rocked Rivian
1er March 2022, Rivian announced that it was going to have to increase its sales prices, including to those who pre-booked their models from 2018. An increase in the price of models which could reach up to 20% of the price.
This announcement did not go smoothly as disgruntled customers began abandoning their bookings, forcing CEO and Founder RJ Scaringe to backpedal two days later. The increase will ultimately only concern new orders.
The fall in the stock market
The financial results for the year 2021 are not good. It must be said that Rivian’s net loss reached $4.7 billion for the year 2021. A substantial amount which will not prevent Rivian from moving forward, since it has enough liquidity for the coming months. But these financial results, combined with the brand’s recent announcements, have given the market doubts.
While on its IPO, Rivian had managed to exceed the valuation of the Volkswagen group, the situation has changed. The euphoria of the beginnings has given way to economic reality. The decline in the action has been especially visible since the end of 2021. It even recorded a 15% drop in recent days at the start of March 2022.
However, it is good to put into perspective that all this is not necessarily a sign that the company will not be able to flourish in the coming years. We can forget it, but Tesla has experienced very similar situations in its history. But if Tesla was a pioneer in electric models, the competition is much more developed now. It is not said that American customers are not turning to electric models from traditional manufacturers (GM, Ford) which will be able to meet more acceptable deadlines for customers.