Rivian, the startup electric truck manufacturer, announced Thursday it has built 2,425 trucks to date, but the production ramp-up at its downstate Normal plant continues to be stuck in first gear, constrained in large part by supply chain issues.
During a fourth quarter earnings call, the California-based company reported that 1,410 vehicles have rolled off the line this year through March 8, a modest acceleration from its first full quarter of production last year, but with many miles to go to hit a new target of 25,000 vehicles in 2022.
“Not surprisingly, our highest priority for the remainder of 2022 is ramping production of our Normal, Illinois manufacturing facility,” Rivian CEO R.J. Scaringe said during the call. “The biggest constraints we now face really lie with the supply chain, and it’s really a small number of parts for which the supplier isn’t ramping.”
Scaringe said Rivian has the capacity to produce upward of 50,000 R1T trucks and R1S SUVs this year, but set its target lower due to supply chain uncertainties roiling the auto industry at large.
Rivian, which launched production in September, completed 1,015 vehicles last year, coming up short of its 1,200-unit production target for 2021. Six months later, it’s been something of a bumpy ride for the company, which raised $13.7 billion through a massive initial public offering, but has been struggling to keep up with demand for its $70,000 EV trucks.
Rivian went public in November at $78 per share, with investors betting the EV startup would become the Tesla of trucks, pushing its valuation north of $100 billion — more than Ford or General Motors. But the stock has taken a beating this year amid investor concerns about vehicle production issues, dropping from a high of $179.47 in mid-November to its closing price Thursday of $41.16 a share, near its all-time low. That has cut Rivian’s market cap down to about $36 billion.
In February, Rivian brought in a new vice president of manufacturing operations at its Normal plant, replacing Erik Fields with Tim Fallon, both former Nissan executives.
Rivian has 83,000 preorders for its R1T and R1S models as of March 8, meaning anyone who puts money down now will have to wait until 2023 to take delivery. The company announced in December it is building a second $5 billion assembly plant in Georgia to keep up with anticipated future demand.
Recent missteps include announcing and then backtracking on a price increase for reservation holders earlier this month after customers complained and in some cases, canceled their orders. Scaringe apologized to customers in a letter, and addressed the issue again during the investor call Thursday.
“We failed to appreciate that customers view their configuration as price-locked,” Scaringe said. “We recognized this as a mistake and quickly move to honor the original configured pricing for our pre-March 1 preorders.”
Founded in 2009 by Scaringe, a 39-year-old MIT grad, Rivian is building an electric truck and SUV, as well as 100,000 custom EV delivery vans for Amazon, an investor in the company. Rivian has raised about $10.5 billion from investors since 2019, a roster that also includes Ford Motor Co. and T. Rowe Price.
Rivian delivered its first electric delivery van to Amazon last year, but isn’t expected to ramp up significant production until the second quarter, Scaringe said Thursday.
Electric vehicle sales gained ground in 2021, making up 2.6% of the U.S. auto market, up from 1.9% the previous year, according to Edmunds. As new models come online and production ramps up, Edmunds projects the U.S. EV market share will climb to 4% in 2022, surpassing 600,000 vehicles sold.
Surging gas prices, which hit another record high Thursday at $4.32 per gallon amid crude oil supply disruptions and Russian sanctions, have generated even more interest in EVs. Edmunds said on-site shopper consideration of so-called green vehicles — hybrid, plug-in hybrid and battery electric — jumped 39% over the past month.
Rivian is facing increased competition in the nascent EV truck space, with the Ford F-150 Lightning set to launch in the spring, starting at just under $40,000. Last month, Chicagoans got their first in-person look at the 2024 Chevrolet Silverado EV pickup truck at the Chicago Auto Show. The truck, which starts at $40,000, is expected to launch in fall 2023.
Rivian has 4,750 employees working at its sole production facility in Normal, a college town about 130 miles south of Chicago. The company, which has more than 11,500 employees overall, plans to break ground on the Georgia plant this summer and begin production by 2024. The Georgia plant will employ 7,500 workers with an eventual production capacity of 400,000 vehicles per year.
Total revenues for the fourth quarter were $54 million, driven by the delivery of 909 vehicles, the company reported. Rivian lost $383 million for the quarter.
