Rivian cuts electric vehicle production forecast, reports huge loss

RT1 trucks being assembled and tested on April 14, 2021, before the new Rivian plant fully opened in Normal, Illinois. Rivian also will build a $5 billion plant in Georgia to make electric vehicles. (Brian Cassella/Chicago Tribune/TNS)

Credit: TNS

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RT1 trucks being assembled and tested on April 14, 2021, before the new Rivian plant fully opened in Normal, Illinois. Rivian also will build a $5 billion plant in Georgia to make electric vehicles. (Brian Cassella/Chicago Tribune/TNS)

Credit: TNS

Rivian, which plans to build a $5 billion factory east of Atlanta, said late Thursday that the global supply chain crisis will severely curtail the number of electric vehicles it produces this year.

The California-based company also said its losses continued to mount last year, due primarily to higher costs for research, ramping up production and employee compensation.

Rivian lost $2.5 billion in the final three months of 2021, and $4.7 billion for the full year. It had reported a narrower $1.2 billion loss for the three-month period that ended Sept. 30.

Investors did not welcome the news. The company’s share price fell 7.2% to $38.20 in morning trading Friday on the Nasdaq stock exchange.

Rivian’s shares have tumbled since the company’s initial public offering in November, when the EV startup was valued at more than $100 billion, higher than traditional vehicle makers like General Motors and Ford. The company’s share price topped $170 late last year, before investors decamped amid production delays.

In recent weeks, Rivian also faced a revolt from customers after the company said it would charge them more to deliver vehicles they had preordered. Rivian backtracked, saying it would honor the original price.

Difficulties in obtaining materials used to make Rivian’s electric trucks, SUVs and vans has slowed production at its Normal, Illinois plant, CEO RJ Scaringe said during a Thursday conference call.

Rivian now expects to make 25,000 vehicles in 2022, although it has the capacity to make 50,000, he said.

Shortages of semiconductors, wire harnesses and printed circuit boards have been the most problematic, he said.

“Our production lines are sitting idle far more often than we’d like because we’re waiting on components,” he said.

Scaringe told analysts that half the customers who canceled their orders after the price hike had restored their reservations.

Consumer interest in Rivian’s EVs remains high, as its backlog of orders has increased this year, Scaringe said. That expected strong demand is the primary reason Rivian wants to build a second factory in Georgia.

ajc.com

Credit: ArLuther Lee

Credit: ArLuther Lee

Work on Rivian’s plant is slated to start this spring at a 2,000-acre site in Morgan and Walton counties, about 45 miles east of Atlanta.

Cox Enterprises, owner of The Atlanta Journal-Constitution, owns a 4.7% stake in Rivian and supplies services to Rivian. 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.