Rivian may be losing money hand over fist, but the electric vehicle company also has customer orders coming in so quickly that it cannot keep up.
If a customer places an order now for a vehicle, the soonest the customer could receive it is 2023, according to the company’s chief executive, who flagged production glitches.
On the same day Rivian confirmed it will build a facility in Georgia to make electric trucks, SUVs and vans, the California-based startup issued its first earnings report as a publicly traded company.
For the three-month period that ended Sept. 30, Rivian’s net loss widened to $1.23 billion from a $288 million loss in the same period a year ago. Higher expenses were the main driver of the loss, related to product research and development, hiring sales staff, adding new office locations and a loss tied to some promissory notes.
But Wall Street analysts expected Rivian to record a quarterly loss. During a Thursday afternoon conference call, analysts instead peppered Rivian executives with questions about the rate of new customer orders and for progress updates on production-line issues.
Investors weren’t happy with all of the answers, after Rivian warned it will fall “a few hundred vehicles short” of its 2021 production target of 1,200 vehicles. The company’s stock price fell 14% in early trading Friday, pushing its valuation to around $80 billion from more than $100 billion a few weeks ago.
Orders have been soaring, CEO RJ Scaringe said during the call. Rivian has received a total of 71,000 orders in the U.S. and Canada for its pickup truck and SUV through Dec. 15, up from 55,400 orders last month.
“What we are finding is that early customers are excited to take rides and to invite their family and friends to take rides” in their new Rivian vehicles once they’re delivered, he said.
However, “orders are coming in at a rate that exceeds our current rate of production,” he said.
Rivian has delivered 386 vehicles to date, largely to its own employees, and plans to deliver its first vans to Amazon this month.
The company has tried to ramp up production at its one existing plant in Illinois as quickly as possible, Scaringe said, but it’s hit some roadblocks. One is the supply chain crisis that’s hit the global economy.
The development of Rivian’s manufacturing processes caused another delay. Earlier this year, Rivian adjusted one of its Illinois production lines from making trucks to making SUVs.
“That proved to be more challenging than we anticipated but we managed through it,” said Scaringe, adding the company is “trying to have both those products in the market as quickly as possible.”
Rivian has ambitious goals for growth and that’s where Georgia comes in. The Georgia plant will manufacture up to 400,000 vehicles yearly, while Rivian’s Illinois plant will make 200,000. Those will contribute to Rivian’s ultimate goal of making 1 million vehicles yearly by 2029.
But the Georgia factory won’t be helping reduce the order backlog any time soon.
Rivian will break ground on its 2,000-acre site between Covington and Madison this summer and expects to begin production in 2024.
Cox Enterprises, owner of The Atlanta Journal-Constitution, owns a 4.7% stake in Rivian and supplies services to Rivian. Sandy Schwartz, a Cox executive who oversees the AJC, is on Rivian’s board of directors and holds stock personally. He does not take part in the AJC’s coverage of Rivian.
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