Rivian †RIVN) – Get Rivian Automotive, Inc. Class A Report got scared, but the electric vehicle manufacturer made up for it.
The fledgling manufacturer of electric SUVs and pickups has just cleared some of the many doubts about its near-term future.
The Irvine, California-based company confirmed its production target of 25,000 vehicles by 2022, despite supply chain disruptions, chip shortages and rising raw material prices. These problems have made it difficult to increase production rates.
“Based on our latest knowledge of the supply chain environment, we reaffirm the annual forecast provided during our fourth quarter and fiscal year 2021 for the earnings call of 25,000 total manufacturing units,” the company said in a letter to its shareholders.
As of May 9, the automaker produced about 5,000 vehicles.
“The supply chain remains the bottleneck of our manufacturing. This challenge persisted for a small handful of engineering components such as semiconductors, as well as a few non-semiconductor components,” explains Rivian.
An affordable mid-sized electric SUV
“Since March 31, 2022, we have been forced to shut down production for longer than expected periods, resulting in a loss of approximately a quarter of planned production time due to supplier constraints.”
But “encouragingly, as we demonstrate our manufacturing capability, our suppliers are leaning towards ensuring we can achieve our goals,” the company added.
Rivian also said it ended the first quarter with $17 billion in cash, which appears to be enough to launch an affordable mid-sized SUV, R2, at a new factory.
“We have optimized our product roadmap and associated operating costs to ensure we have a path to launch R2 in Georgia in 2025 with our current cash on hand,” the company explains.
Rivian signed an agreement with authorities in the US state of Georgia in early May. This agreement will enable the automaker to accelerate construction of a $5 billion plant east of Atlanta. That will be the company’s second car manufacturing site, after Normal, Ill.
Construction will start this summer and the first vehicles are expected to roll off the production line in 2024. Once production operations are fully ramped up, the facility will be capable of producing as many as 400,000 vehicles per year.
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The deal also gives Rivian, which was founded in 2009 and went public in 2021, $1.5 billion in government grants from Georgia. The carmaker currently produces three vehicles at its plant in Normal: the R1T electric pick-up, the R1S electric SUV and the RCV electric van.
As of May 9, Rivian registered more than 90,000 net R1T preorders from consumers in the US and Canada, including 10,000 preorders since the March price hikes, with an average price of more than $93,000, the company said.
These numbers show that the demand for Rivian vehicles remains strong.
Ford sells, Soros buys
Rivian shares, which had lost 78% of their value to $22.79 since January before the May 11 announcements, have since risen 29.61% to $26.70 in two trading sessions.
However, this did not stop Ford from †f) – Get report from Ford Motor Company, one of Rivian’s largest shareholders, to sell additional shares. In a document filed with the Securities and Exchange Commission on the evening of May 13, the longtime automaker indicated that it sold 7 million Rivian shares on the same day at a price of $26.88. Ford now owns just 86.95 million Rivian shares.
It is the second time in less than a week that Ford has sold Rivian shares. On May 9, the auto giant sold 8 million Rivian shares at a price of $26.90.
After appreciating in 2021, Ford’s stake in Rivian has fallen sharply since January, causing large losses for the automaker. Ford’s stake in Rivian was valued at $5.1 billion as of March 31, more than half down from $10.6 billion at the end of 2021, the company said.
Ford competes with Rivian, with the all-electric pickup F-150 Lightning.
If Ford sells, other Rivian shareholders will keep their confidence in it. This is the case of the e-commerce giant Amazon †AMZN) – Get Amazon.com, Inc. Reportthat keeps its 17.74% stake intact as of December 31.
“Rivian is an important partner for Amazon and we are excited about the future,” a spokesperson said in an emailed statement. “Having 100,000 electric vans on the road by 2030 is no small feat, and we remain committed to working with Rivian to make it a reality.”
Legendary investor George Soros has also just given Rivian a big sign of confidence. Soros Fund Management has indeed increased its stake in the auto group.
The company had nearly 20 million Rivian shares — 19,835,761 — valued at $2 billion as of December 31. But as of March 31, Soros Fund Management purchased just over 6 million additional Rivian shares — 6,045,000 — according to a May 13 filing with the SEC.
In all, the billionaire’s fund holds just over 25.88 million Rivian shares, valued at just over $691 million at the Rivian stock’s closing price on May 13.