Rivian Automotive
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Rivian CEO: Supply Chain Loosening Up In ‘Powerful Ways’

Nov. 29, 2022
RJ Scaringe also told an investor conference his team’s second shift in Illinois should be at full capacity by spring.

Slower growth in some parts of the economy is easing supply chain pain for electric vehicle maker Rivian Automotive Inc., founder and CEO RJ Scaringe said Nov. 29.

Speaking to an investor conference hosted by research firm Redburn, Scaringe said the work his team has been doing to solidify and grow relationships with suppliers is being helped by demand softening in some sectors, especially for chips.

“The supply chain being less overpressurized is actually helpful, particularly with semiconductors,” Scaringe said. “We’ve seen that space and across the various stages of supply chain start to loosen up in powerful ways that we think are going to alleviate a lot of the challenges that we had throughout this year.”

A reduction in supply chain snags is welcome news for California-based Rivian, which lost five days of production early this quarter because of a shortage of chips and is targeting growth of 45% from Q3 to meet its full-year goal of making 25,000 vehicles at its Normal, Illinois, plant—versus 1,015 in 2021. Scaringe said Rivian’s suppliers have stepped throughout 2022, sometimes with help from the company, to meet that higher output goal and he added that Rivian executives now feel confident about the outlook for 2023 and beyond.

“Each supplier has to go through their own associated challenges with ramping,” he said. “We’ve seen those ramps occur and we’ve seen our confidence grow with those suppliers and vice versa.”

On the Redburn call, Scaringe also discussed:

- Rivian’s medium-term plans to built its own battery cells alongside a growing supplier network—the company has signed some yet-to-be-announced deals—and wider range of batteries. Boosted by passage of the Inflation Reduction Act, he said, Rivian should be making some of its own batteries in the second half of this decade.

-  That the company’s second shift in Illinois, which was launched a few months ago, should be running at 100% capacity by the end of the first quarter.

- Rivian’s opportunity to hike prices for its R1S SURV and R1T truck models, which are lower than several similar products on the market. Scaringe admitted that the vehicles were “clearly underpriced” when they were first launched—an attempt last year to hike prices, including for customers who had already placed orders, backfired—and that the company’s dual-motor and quad-motor options will allow it to lift prices and narrow its losses.

Shares of Rivian (Ticker: RIVN) rose nearly 1% Nov. 29 to close at $28.85. Over the past six months, they have fallen about 8%, trimming the company’s market valuation to about $25 billion.

About the Author

Geert De Lombaerde | Senior Editor

A native of Belgium, Geert De Lombaerde has been in business journalism since the mid-1990s and writes about public companies, markets and economic trends for Endeavor Business Media publications, focusing on IndustryWeek, FleetOwner, Oil & Gas JournalT&D World and Healthcare Innovation. He also curates the twice-monthly Market Moves Strategy newsletter that showcases Endeavor stories on strategy, leadership and investment and contributes to other Market Moves newsletters.

With a degree in journalism from the University of Missouri, he began his reporting career at the Business Courier in Cincinnati in 1997, initially covering retail and the courts before shifting to banking, insurance and investing. He later was managing editor and editor of the Nashville Business Journal before being named editor of the Nashville Post in early 2008. He led a team that helped grow the Post's online traffic more than fivefold before joining Endeavor in September 2021.

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