The production ramp-up at Rivian’s plant in Normal is going slower than expected.
The electric automaker announced its first quarterly results on Thursday. Included was news that Rivian has produced 652 R1 vehicles (mostly trucks) since production began in September. That means Rivian will be “a few hundred vehicles short” of its target of 1,200 by the end of 2021.
“Our dedicated teams are working as hard as possible to get as many customers their vehicles by year’s end,” Rivian founder and CEO RJ Scaringe said on an earnings call. “Ultimately ramping up the R1S (sport utility vehicle) in November, while also ramping production of the R1T (pickup truck), was more challenging than expected.”
But that work on the R1S paid dividends. The first saleable R1S vehicles have been produced; Scaringe said he and his chief financial officer, Claire McDonough, bought the first two.
Rivian now has 71,000 preorder customers for its R1T and R1S. That’s up 28% from Oct. 31. Separately, Rivian also received an order for 100,000 electric delivery vans from Amazon.
Supply chain constraints continue to be a challenge, Scaringe said. Rivian’s suppliers are also scaling up their production to match Rivian’s ramp-up rate, and the company’s procurement team remains “nimble and continues to work with supplier partners across all tiers to mitigate issues stemming from our supply chain, the labor market, and the COVID pandemic.”
Scaringe said the supply chain issues were “short term” and “solvable.”
“Given the uncertainty within the supply chain, we’ve decided to carry higher inventory levels than we previously assumed, to help ensure we consistently have parts to build,” he said.
Rivian already has around 3,800 employees at its Normal plant. On Thursday the company announced plans to hire an additional 800-1,000 employees in Normal by the second quarter of 2022. That would easily make Rivian the second-largest employer in McLean County, behind State Farm.
Rivian also disclosed Thursday it would expand the production capacity of the Normal plant from 150,000 vehicles per year to 200,000 per year. That’s made possible in part by the $13.7 billion in gross proceeds that Rivian raised through its massive initial public offering in November.
Rivian is spending a ton of money, with little revenue from vehicle sales because production has only just begun. Rivian posted an operations loss of $776 million for the quarter ending Sept. 30, and a net loss of $1.2 billion. It took in total revenue of $1 million in the third quarter – through the first customer deliveries of 11 pickup trucks.
Rivian doesn’t expect to be profitable for the foreseeable future, and that’s not uncommon in the EV world. It took 18 years for Tesla to turn a full-year profit, which it finally did in 2020. That year it made 500,000 vehicles.
