Electric vehicle startup Rivian, which is planning a $5 billion plant in Georgia, said Wednesday the company is moving past the worst of its supply chain issues and will meet its current production goals of 25,000 trucks, SUVs and vans this year.
Rivian CEO R.J. Scaringe said suppliers have improved their output of computer chips and the company believes it will soon start a second shift at its first factory in Illinois.
“Where we stand today, a lot of those other challenges have been resolved,” Scaringe told analysts during the company’s first quarter earnings call. “We’ve worked with those suppliers to ramp (up) their production.”
The Irvine, California-based company also said it expects to launch its future Georgia factory with production of a new SUV model, known as the R2, starting in 2025.
Rivian reported about $17 billion in cash on hand at the end of the first quarter, and Scaringe said the company expects to be able to launch the new model with the cash it has. The future R2 model will be “a more accessibly priced mid-sized SUV targeting global markets,” according to Rivian’s first quarter shareholder letter.
The R2, with more mass market appeal, will be critical to the company’s future.
“We couldn’t feel more confident in the path that lies ahead,” Scaringe said.
Rivian confirmed plans in December to build an assembly plant and battery factory on about 2,000 acres along I-20 in southern Walton and Morgan counties, about an hour east of Atlanta. Rivian has said it will build trucks, SUVs, delivery vans and batteries on site.
Credit: Hyosub Shin/AJC
Credit: Hyosub Shin/AJC
Rivian has said it will hire 7,500 at the future Georgia factory with production expected to begin in 2024.
State and local officials offered Rivian a $1.5 billion package of incentives, including free land, grants, tax credits, a workforce training center and infrastructure improvements.
Rivian went public in November in one of the nation’s largest initial public offerings and saw its market capitalization grow larger than rivals like General Motors and Ford. But Rivian shares have been pummeled as the company encountered supply chain issues and lowered estimates of how many vehicles it will produce.
Broader economic concerns, including inflation, have battered the economy and stock market.
At IPO, Rivian shares were priced at $78, but soon grew to more than $170 per share. Rivian shares closed Wednesday at $20.60.
Rivian reported revenue of $95 million in the first quarter and a net loss of $1.6 billion. As a startup, Rivian is likely to burn cash until it is able to increase its production.
The company built 2,553 vehicles in the first quarter and about 5,000 total since the company started production. But to reach 25,000 this year, the company will have to significantly boost output.
Scaringe said Rivian has an order book of more than 90,000 R1T trucks and R1S SUVs, a pre-order list that has grown by 10,000 since the company raised price in March. Amazon has also ordered 100,000 electric delivery vans.
Scaringe has warned the EV industry faces challenges in sourcing battery components long term. But he said Wednesday the company is confident in its ability over the next five years to obtain materials it needs for battery packs.
A note of disclosure
Cox Enterprises, owner of The Atlanta Journal-Constitution, owns about a 4% stake in Rivian and supplies services to the company. Sandy Schwartz, a Cox executive who oversees the AJC, is on Rivian’s board of directors and holds stock personally. He does not take part in the AJC’s coverage of Rivian.