Source: RJ Scaringe/Twitter
California-based EV pickup truck manufacturer Rivian maintains that it will be able to produce 25,000 vehicles by the end of 2022, including its R1 pickup truck/ute and SUV platforms and its RCV electric delivery van.
Rivian published its second-quarter earnings late last week and, while the company’s finances are still struggling due to production and supply chain issues, Rivian nevertheless confirmed that it still believes it can reach its 2022 production target.
“We continued to ramp production on our R1 and RCV platform lines, producing 4,401 total vehicles during the quarter compared to 2,553 in the first quarter of 2022,” the company said in its Q2 2022 Shareholder Letter.
“Our equipment, people, systems, and supply chain continue to show progress as we work towards our 2022 production guidance of 25,000 units.
“Supply chain continues to be the limiting factor of our production; however, through close partnership with our suppliers we are making progress. We expect to be able to add a second shift for vehicle assembly towards the end of the third quarter.”
Supply chain constraints are affecting carmakers the world over, so this is of little surprise, and Rivian’s continuing bullish attitude towards its 2022 production target has impressed some analysts.
Wedbush Securities analyst Dan Ives said Rivian is in a great position to capture the increasing influx of current and future EV demand and that the company’s existing commercial relationship with Amazon is helping to solidify the company’s position over the remainder of the decade.
“As supply headwinds continue to challenge Rivian’s ability to put out vehicles, the production story will be under the bright spotlight over the coming quarters,” said Ives, who has an Outperform rating on Rivian and increased the price target from $40 to $45.
Demand for Rivian vehicles also – including the R1T pickup truck/ute and the R1S SUV – remained strong with a pre-order backlog of approximately 98,000 from customers in the United States and Canada.
“The profile of our preorder base continues to reflect the broad appeal of the R1 platform as well as the product whitespace our vehicles occupy,” the company told shareholders.
“Nearly 60% of R1T preorder holders have never owned a pickup truck and approximately 90% of our total preorder holders do not own an EV.”
As suggested by Ives, Rivian’s commercial partnership with Amazon is also serving as a strong foundation for investors. Rivian began its rollout in July of its custom EDV (electric delivery vans) to Amazon locations around the United States, part of a 2019 order for 100,000 vans that has underpinned Rivian’s progress over the last few years.
Despite steady (if slow) production progress during the quarter, Rivian reported a net loss of $US1.7 billion in the second quarter, compared to a $US580 million net loss in the second quarter of 2022.
Rivian directly attributed the “increased losses, as compared to the second quarter of 2021, were due primarily to the higher operating losses” that grew in the second quarter, an issue facing the majority of carmakers at the same time.
The company is revising its revenue guidance for the remainder of the year due to the impacts of ramping up production and the larger global supply chain constraints and raw material inflation.
Rivian also remains positive about its ability to launch its next electric vehicle, the R2, which it hopes to launch in 2025.
Keyword: Rivian maintains 2022 production goals of 25,000 despite huge losses