Rivian, which has had a rocky trip within the inventory market after a blockbuster preliminary public providing, solid an additional shadow over its outlook on Thursday, reporting that offer chain issues may severely constrain its manufacturing of electrical autos.
The firm mentioned it will have the ability to produce solely 25,000 autos this 12 months, half the quantity it mentioned it may make if the provision chain weren’t a “fundamental limiting factor.”
Problems securing components and supplies are affecting all automakers, however they’re hitting Rivian when it has bought only a few autos and faces competitors from bigger firms.
“Like the rest of the industry, we anticipate supply chain challenges to persist through 2022,” Rivian mentioned in a letter to shareholders that detailed its monetary outcomes for final 12 months. On a name with Wall Street analysts on Thursday, R.J. Scaringe, Rivian’s chief govt, mentioned the issues centered on a “small number of parts.”
Rivian makes a high-end truck — designed extra as an off-road automobile than as a cargo hauler — and a sport utility automobile. Rivian additionally has an settlement to make electrical supply vans for a giant shareholder, Amazon, which has ordered 100,000. When Rivian went public, buyers noticed it as a attainable competitor to Tesla, the biggest electrical automobile maker.
A Critical Year for Electric Vehicles
The recognition of battery-powered automobiles is hovering worldwide, whilst the general auto market stagnates.
Rivian mentioned that as of Tuesday, it had produced 1,410 autos this 12 months, a small fraction of the 83,000 orders submitted. The firm didn’t say what number of vans it had delivered to Amazon this 12 months.
Stock analysts mentioned Rivian’s report was disappointing, and its inventory plunged 12 % in after-hours buying and selling after the corporate launched its outcomes.
“It’s been a very frustrating name,” mentioned Dan Ives, analyst and managing director at Wedbush Securities, “and these results show that Rivian still has a lot more wood to chop.” He mentioned he had initially anticipated Rivian to make 40,000 autos this 12 months, effectively above the corporate’s newest forecast, including that analysts had anticipated orders for Rivian autos to be larger than the 83,000 reported.
Along with different E.V. makers, Rivian should deal with rising costs for lithium and nickel, that are utilized in making batteries. Russia is a giant exporter of nickel, and fears that the metallic’s provide may very well be constrained have pushed up its value.
“We hope the inflation that we’ve seen with nickel pricing very recently is short-lived,” Mr. Scaringe mentioned.
Rivian went public in November, elevating $13.5 billion — money it might want to develop its factory in Normal, Ill., and construct one in Georgia. The inventory soared at first, giving Rivian a market worth exceeding that of General Motors, however it’s now buying and selling at roughly half its I.P.O. value.
The shares declined in current months after Rivian said it was facing production challenges, then tumbled additional in a buyer relations debacle over pricing. Rivian mentioned final week that it will enhance the costs of its autos, even these already ordered. Facing a backlash, Rivian backtracked and utilized the will increase solely to new orders, and Mr. Scaringe apologized in a letter to prospects.
Before the worth change, Rivian’s truck and automotive may value as a lot as $83,000. After the introduction of latest choices, the worth may attain $95,000.
Rivian had income of $55 million final 12 months and a internet lack of $4.7 billion. It used up $4.4 billion of money operating its enterprise and investing in new services and gear, and had $18 billion of money on its stability sheet on the finish of final 12 months. The firm mentioned it anticipated a loss this 12 months of $4.75 billion beneath a measurement of earnings generally known as adjusted earnings earlier than curiosity, taxes, depreciation and amortization.
Mr. Ives mentioned buyers may additionally balk on the excessive degree of prices, particularly in the event that they had been anticipating larger order numbers. “The cost overruns are a lot more than the Street expected,” he mentioned. “If preorders were on pace, the Street would be fine with it.”
The govt overseeing Rivian’s operations left final 12 months as the corporate was attempting to ramp up manufacturing. On Thursday, Mr. Scaringe mentioned the corporate would announce a brand new chief working officer subsequent week.