Rivian cites Russian invasion of Ukraine as business risk in new SEC filing
You can add Russia’s invasion of Ukraine to the long list of challenges facing electric automaker Rivian as it tries to ramp up production in Normal.
The 5-week-old war in Ukraine came up repeatedly in Rivian’s latest SEC filing, released late last week. It’s included in a long list of “risk factors” facing Rivian – disclosures that Rivian provides to investors so they’re aware of the risks that come along with their investment.
“Russian military actions and the resulting sanctions could adversely affect the global economy and financial markets and lead to instability and lack of liquidity in capital markets, potentially making it more difficult for us to obtain additional funds, as well as further disrupting the supply chain,” Rivian said. “Any of the foregoing factors could have a material adverse effect on our business, prospects, financial condition, results of operations, and cash flows. The extent and duration of the military action, sanctions, and resulting market and/or supply disruptions are impossible to predict, but could be substantial.”
EV production began at Rivian six months ago, but it’s gotten off to a slower start than was hoped. COVID-19 and global supply chain pressures have challenged many automakers, including Rivian. The semiconductor, or chip, shortage has been among the most painful. Rivian said supply chain problems will essentially limit production by half in 2022.
Due to supply chain issues and “the current inflationary environment in the United States,” Rivian says “the cost of input materials, components and systems required to produce our vehicles has risen considerably.”
For example, Rivian says “there have been very sizable increases in recent months in the cost of key metals, including lithium, nickel, aluminum, and cobalt with volatility in pricing expected to persist for the foreseeable future.” Some of those metals are used in EV battery production.
“And we have increased, and may need to continue to increase, the prices of our vehicles in response to these and future cost pressures,” the company said.
Rivian is making its electric SUVs, trucks, and vans at its Normal plant. It is the second-largest employer in McLean County, with over 5,000 workers.