After enduring a week of falling stock prices, Rivian’s top executives on Wednesday reassured the market that they would meet 2022 production targets in Normal and revealed new details about the ‘R2’ line of vehicles. which will be manufactured at the electric vehicle maker’s second plant in Georgia.
Rivian’s stock price is down 88% from its post-IPO high. Production of Rivian’s first electric trucks began in Normal eight months ago, but the ramp-up has been slowed by shortages in the supply chain, including semiconductor chips. It has manufactured around 5,000 vehicles so far.
In a quarterly update on Wednesday, Rivian said it lost about a quarter of planned production time since March 31 due to supplier constraints that forced plant shutdowns.
“We believe we’ve seen the worst, or the valley, if you will, of these supply constraints,” Rivian founder and CEO RJ Scaringe said, adding that they had “very high levels of visibility” on allowances from their suppliers. . This, he said, allows Rivian to reaffirm that it will be able to meet its production target of 25,000 vehicles for 2022 – a number that is half of what the plant could do without problems. of supplier. (At full capacity, the plant is theoretically capable of manufacturing 150,000 vehicles per year.)
Year-to-date, Rivian said “the demonstrated sustained production rate of our production lines (in Normal) has tripled.”
“The factory has been able to produce more than our supply chain, and what gives us a lot of confidence for the future is the clear line of sight we have around the ramp-up of our supply chain and the close relationship we have with key suppliers,” said Scaringe.
Rivian has only worked one shift at the Normal factory so far – missing out on the opportunity to make vehicles (and more money) for more hours of the day.
Scaringe said the Normal plant is expected to add a second shift in mid-2022. Rivian is already McLean County’s second largest employer, with more than 5,000 workers.
Rivian manufactures its R1S SUV, R1T pickup and electric delivery vans in Normal. And Scaringe said they were pleased with the demand for these products; Rivian has received over 10,000 new R1 pre-orders since they raised prices in March, with an average price of over $93,000.
Meanwhile, Rivian executives on Wednesday explained in more detail the “R2 program” – the line of vehicles that will be manufactured at the company’s second plant being built in Georgia. Rivian plans to hire 7,500 people at this plant, located east of Atlanta.
The R2 platform will be a “more accessible mid-size SUV” (lower price) targeting global markets. The company said it plans to launch its first R2 vehicle in Georgia in 2025.
Scaringe said Rivian learned a lot about production at Normal that will be used to set up the $5 billion factory in Georgia. Scaringe said iterative learning even happened between the “first generation” R1 line in Normal and the second line that was built to support commercial delivery vans, for which Amazon ordered 100,000 units. .
“And as we now look to Georgia, the opportunities to learn from a production line setup perspective, as well as the product itself – and bring it all together to create a world-class product in terms of affordability and (capital expenditure) efficiency – that’s the primary focus from a development perspective for our product and plant design teams,” Scaringe said.
Rivian spends a lot of money doing all of this. It spent $547 million on research and development in the first quarter of 2022 and recorded $418 million in capital expenditures. Its quarterly net loss was $1.6 billion, although profitability is not expected anytime soon.
But the company has nearly $17 billion in cash, some of which came from that massive IPO last fall. And it’s starting to make money from vehicle sales: It brought in $95 million in revenue in the first quarter of 2022.