Shares of Rivian Automotive Inc. jumped more than 20% May 12 after the company’s executives said they are confident in the 25,000-unit 2022 production target they committed to in March and noted that a number of their supply chain challenges “have been resolved.”
California-based Rivian produced 2,553 vehicles in the first quarter and delivered 1,227. That produced $95 million in revenue, although the company’s sizable investments – capex for the quarter was $418 million – mean it booked net and operating losses of nearly $1.6 billion. Rivian finished March with more than $16 billion of cash and equivalents.
The company has now produced more than 5,000 vehicles and booked more than 90,000 R1 pre-orders. Those numbers are up from 2,425 and 83,000, respectively, two months ago. Amazon Inc. also has ordered 100,000 electric delivery vans.
And while supply chain bottlenecks have been a big problem – the Rivian team early this year cut their production goal in half and said this week the company has lost about a quarter’s worth of production time – founder and CEO RJ Scaringe said he is “very confident” in the supplier relationships his team has built and the better visibility it now has on that front.
“We believe we’ve seen really the worst of it,” Scaringe said of supply chain snarls while lauding Rivian’s suppliers for their efforts to ramp up. “We have very high levels of visibility into what the allocations will be on a go-forward basis and that gives us the confidence of what the ramp will look like as we look out through the remainder of this year.”
Scaringe also noted that Rivian’s plant in Normal, Illinois, has improved its overall production rate more than threefold since the end of 2021 as its teams have honed their processes. He and CFO Claire McDonough said that those efficiency gains and others still being worked will help them build out the Normal plant’s capacity and let them pace other capital investments in coming quarters.
In late-morning trading May 12, Rivian’s stock (Ticker: RIVN) was changing hands around $25.40, up more than 23% from its prior close. But it is still down 75% year to date, a fall that spilled over into the earnings of investors Ford Motor Co. and Amazon, which needed to book unrealized losses on their holdings of $5.4 billion and $7.6 billion, respectively, in the first quarter. Ford executives this week filed papers with regulators saying they had recently sold 8 million of their roughly 102 million shares for about $26.80 apiece.