Rivian, which has had a rocky trip within the inventory market after a blockbuster preliminary public providing, forged an additional shadow over its outlook on Thursday, reporting that provide chain issues might severely constrain its manufacturing of electrical automobiles.
The corporate mentioned it could have the ability to produce solely 25,000 automobiles this 12 months, half the quantity it mentioned it might make if the availability chain weren’t a “elementary limiting issue.”
Issues securing components and supplies are affecting all automakers, however they’re hitting Rivian when it has offered only a few automobiles and faces competitors from bigger corporations.
“Like the remainder of the business, we anticipate provide chain challenges to persist by means of 2022,” Rivian mentioned in a letter to shareholders that detailed its monetary outcomes for final 12 months. On a name with Wall Road analysts on Thursday, R.J. Scaringe, Rivian’s chief government, mentioned the issues centered on a “small variety of components.”
Rivian makes a high-end truck — designed extra as an off-road car than as a cargo hauler — and a sport utility car. Rivian additionally has an settlement to make electrical supply vans for a giant shareholder, Amazon, which has ordered 100,000. When Rivian went public, traders noticed it as a attainable competitor to Tesla, the most important electrical car maker.
A Crucial Yr for Electrical Automobiles
The recognition of battery-powered vehicles is hovering worldwide, at the same time as the general auto market stagnates.
Rivian mentioned that as of Tuesday, it had produced 1,410 automobiles this 12 months, a small fraction of the 83,000 orders submitted. The corporate didn’t say what number of vans it had delivered to Amazon this 12 months.
Inventory analysts mentioned Rivian’s report was disappointing, and its inventory plunged 12 p.c in after-hours buying and selling after the corporate launched its outcomes.
“It’s been a really irritating title,” mentioned Dan Ives, analyst and managing director at Wedbush Securities, “and these outcomes present that Rivian nonetheless has much more wooden to cut.” He mentioned he had initially anticipated Rivian to make 40,000 automobiles this 12 months, nicely above the corporate’s newest forecast, including that analysts had anticipated orders for Rivian automobiles to be increased than the 83,000 reported.
Together 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 steel’s provide might be constrained have pushed up its worth.
“We hope the inflation that we’ve seen with nickel pricing very not too long ago is short-lived,” Mr. Scaringe mentioned.
Rivian went public in November, elevating $13.5 billion — money it might want to broaden its manufacturing unit in Regular, Ailing., and construct one in Georgia. The inventory soared at first, giving Rivian a market worth exceeding that of Basic Motors, however it’s now buying and selling at roughly half its I.P.O. worth.
The shares declined in current months after Rivian mentioned it was dealing with manufacturing challenges, then tumbled additional in a buyer relations debacle over pricing. Rivian mentioned final week that it could improve the costs of its automobiles, even these already ordered. Going through a backlash, Rivian backtracked and utilized the will increase solely to new orders, and Mr. Scaringe apologized in a letter to prospects.
Earlier than the value change, Rivian’s truck and automobile might price as a lot as $83,000. After the introduction of recent choices, the value might 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 working its enterprise and investing in new services and tools, and had $18 billion of money on its steadiness sheet on the finish of final 12 months. The corporate mentioned it anticipated a loss this 12 months of $4.75 billion beneath a measurement of income often called adjusted earnings earlier than curiosity, taxes, depreciation and amortization.
Mr. Ives mentioned traders may additionally balk on the excessive degree of prices, particularly in the event that they had been anticipating increased order numbers. “The associated fee overruns are much more than the Road anticipated,” he mentioned. “If preorders had been on tempo, the Road could be high-quality with it.”
The chief 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.