It's a big relief.
Rivian (RIVN), the young manufacturer of electric vehicles, finally has good news for its shareholders and buyers of clean vehicles.
The Irvine, Calif.-based group has just confirmed its main target for the year, despite supply chain issues that continue to plague the automotive industry. Rivian claims to be able to manufacture 25,000 cars in 2022.
It "believes it is on track to deliver on the 25,000 annual production guidance previously provided," the company said in a press release on Oct. 3.
10,683 Vehicles to the Finish Line
In the three months to Sept. 30, the company produced 7,363 vehicles, more than the 7,000 anticipated by RBC Capital Markets analysts. When we add these 7,363 units to the 6,954 vehicles that the group had produced between January and June, Rivian has already produced 14,317 cars. It will therefore have to manufacture 10,683 vehicles in the next three months to reach its objective.
Producing 10,000 vehicles in three months would be a feat for Rivian, which manufactured its first vehicle in September 2021, especially since the company warned in August that it is still facing difficulties with its suppliers.
"Supply chain continues to be the limiting factor of our production" the company said on Aug. 11 in a letter to shareholders. "Throughout the quarter, our cost of materials was impacted by inflationary pressures, which we believe will continue to be an impact for the near future."
"We've seen unprecedented levels of inflation especially across our raw material, inputs and lithium prices that have gone up north of 115% over since the start of this year, in particular coupled with Covid and other factors that have driven a challenging supply chain and inflationary environment as well as part of that," Chief Financial Officer Claire McDonough detailed.
Rivian, which produces the R1T electric truck/pickup and the R1S SUV, as well as its electric delivery van, the EDV, has however put all the chances on its side to keep its commitment.
"We expect to be able to add a second shift for vehicle assembly towards the end of the third quarter," the company said in August.
How About Logistics?
In its statement of October 3, Rivian does not communicate any other details but it is more than likely that the company will give more color on this second shift which is supposed to allow it to significantly increase its production when the quarterly results are published in November.
The firm, that produces its cars in Normal, Il., delivered 6,584 vehicles to its customers in the third quarter. The figures for the last three months are up sharply compared to the quarter preceding them. In the second quarter, Rivian had produced 4,401 vehicles and delivered 4,467 units.
Rivian did not mention the logistical problems encountered by its fierce rival Tesla (TSLA). Elon Musk's group delivered a record number of vehicles for the third quarter but warned that logistics is becoming a major headache.
"As our production volumes continue to grow, it is becoming increasingly challenging to secure vehicle transportation capacity and at a reasonable cost during these peak logistics weeks," it added.
"In Q3, we began transitioning to a more even regional mix of vehicle builds each week, which led to an increase in cars in transit at the end of the quarter. These cars have been ordered and will be delivered to customers upon arrival at their destination," Tesla said.
The company delivered 343,830 vehicles during this period, which ended on Sept. 30. This is an increase of 42.5% compared to the 2021 third quarter, a period during which Tesla delivered 241,300 cars.
If the 343,830 units were a record, it was nevertheless below the 364,660 vehicles anticipated by FactSet analysts.
