(Bloomberg) — Electric-pickup maker Rivian Automotive Inc. said its plans to accelerate production are being constrained by overstretched supply chains, extending its stock slide after the startup’s rough start to the year.
Rivian said it expects to build 25,000 vehicles in 2022, a figure weighed down in part by component shortages. Without those hurdles, its factory would have capacity to build about 50,000 vehicles, Rivian said Thursday in a letter to shareholders as it reported quarterly results.
“We are not immune to the supply-chain issues that have challenged the entire industry,” Rivian said in the letter. “Those issues, which we believe will continue through at least 2022, have added a layer of complexity to our production ramp-up.”
The growing pains mark the latest setback for Rivian, as the onetime EV darling stumbles in its early days as a public company. After notching one of the biggest initial public offerings in U.S. history last year, the company missed its 2021 production forecast, temporarily suspended work at its plant and upset customers with a price hike.
Read more: Rivian Is Ramping Production of Pickups After Late 2021 Woes
The shares fell 14% at 6:03 p.m. after regular trading Thursday in New York. The automaker, which counts Amazon.com Inc. as a major shareholder and customer, had already fallen 60% this year through Thursday’s close.
Rivian reported fourth-quarter revenue of $54 million, below analyst consensus estimates of $64 million. The Irvine, California-based company recorded an adjusted loss per share of $2.43, wider than the $2.05 loss analysts were expecting.
The startup ended the quarter with $18.4 billion in cash, cash equivalents and restricted cash, excluding additional lines of credit.
What Bloomberg Intelligence Says
“Rivian’s expectations for Ebitda and capital spending make a cash burn of more than $7 billion worse than our prior expectations.”
— Joel Levington, BI credit analyst
After starting production in September, Rivian produced 1,015 vehicles the rest of the year, short of its target. Following Covid-19 disruptions and a planned shutdown of assembly lines on New Year’s Day, first reported by Bloomberg on Jan. 26, Rivian has built another 1,410 this year.
Rivian recently hit a rate of production that was two times what it achieved in the fourth quarter, indicating improvements on assembly lines.
Chief Executive Officer R.J. Scaringe lamented the component shortages that are hampering production, saying on a conference call with analysts that factory lines are “sitting still far more often than we’d like.” He pointed a finger at suppliers and said his company would be “increasingly aggressive” in chasing them to meet orders.
Reservations for Rivian’s consumer EVs stood at 83,000 as of March 8, the company said. The company said last week that it plans to raise prices for new customers by 17% for the R1T pickup and 20% for the R1S SUV. That announcement marked another stumble for Rivian, which was forced to roll back the price hike for prior customers following a backlash, saying it made a “mistake” in applying it broadly.
Scaringe said on the call that there was no “mass cancellation” following the decision to raise prices. After the reversal, more than half of those who did cancel reinstated their order, Chief Growth Officer Jiten Behl said.
(Updates with CEO comments from call in 10th paragraph)
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