Just off – Rivian missed production target for 2022

Rivian did not meet its production target of 25,000 vehicles for 2022. This ended a difficult year for the electric car startup. According to CEO RJ Scaringe, production of more than 700 vehicles was delayed waiting for parts or other work.

By Sean McLain
The Wall Street Journal
Translation: Laura Markus

Rivian told authorities that the company completed 10,020 vehicles in the last 3 months of 2022. The total number of vehicles produced this year was 24,337. The company delivered 20,332 of these vehicles to customers.

In an email to employees, CEO RJ Scaringe explained that global supply chain issues are to blame for the missed production target.

Because of these supply chain issues, Rivian’s only plant in Normal, Illinois, had to close for 20 days last year. It was also closed early for another 50 days.

Foto: Brian Cassella/picture alliance/ZUMAPRESS.com

Investors have been closely following the fledgling company’s production target of 25,000 vehicles. Rivian began production of its first model, the R1T pickup truck, in late 2021. During this time, there were bottlenecks and interruptions in the supply chain worldwide. The company is also building an electric SUV called the R1S and an electric delivery van for Amazon. The e-commerce giant is also a key investor.

The company wanted to prove to investors that it could mass-produce its vehicles and deliver the more than 100,000 vehicles on order. In early 2022, it lowered its production forecast for the year to 25,000 from 50,000.

However, Rivian is not the only electric car manufacturer struggling with production problems. Tesla also missed its delivery target for 2022. The reasons for this are corona-related plant closures in China and a change in the production and delivery of vehicles to customers. Lucid, another young EV startup, has lowered its production target this year, citing supply chain and logistics issues.

Based in Irvine, California, Rivian reported a net loss of $5 billion for the first 9 months of last year. The company struggled to ramp up production at the Normal plant and suffered from rising raw material costs. Company executives attribute some of the losses to the inefficiency of not running a car factory at full capacity. According to the company, the plant has a production capacity of around 150,000 vehicles per year.

Since going public in late 2021, Rivian has seen its cash holdings shrink. The company spent a lot of money to expand its production while struggling with rising raw material costs. At the end of September, the company had $13.8 billion in cash and cash equivalents. At the end of June it was still $15.46 billion.

Rivian stock skyrocketed after its IPO in November 2021, but has plummeted over the past year amid manufacturing issues and a deteriorating economic outlook. The stock is down more than 80 percent from its peak to close at $17.34 on Tuesday. That equates to a market cap of around $15.3 billion.

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