After enduring a week of plunging stock prices, Rivian’s top leaders on Wednesday reassured the market they’ll hit 2022 production targets in Normal and revealed new details about the "R2" line of vehicles that will be made at the EV maker’s second plant Georgia.
Rivian’s stock price is down 88% from its post-IPO high. Production of Rivian’s first electric trucks began in Normal eight months ago, but the ramp-up has been slowed by supply chain shortages, including semiconductor chips. It's made around 5,000 vehicles so far.
In a quarterly update Wednesday, Rivian said it lost about a quarter of planned production time since March 31 due to supplier constraints that forced stoppages in the plant.
“We believe we’ve seen the worst of it, or the valley, if you will, of these supply constraints,” said Rivian founder and CEO RJ Scaringe, adding that they have “very high levels of visibility” into their suppliers’ allocations. That, he said, allows Rivian to reaffirm it will be able to hit its 25,000-vehicle production target for 2022 – a number that’s half what the plant could do without supplier issues. (At full steam, the plant is theoretically able to make 150,000 vehicles a year.)
Since the beginning of the year, Rivian said the "demonstrated sustained production rate of our production lines (in Normal) has tripled."
“The plant’s been able to outproduce our supply chain, and what gives us a lot of confidence as we look at the time ahead is the clear line of sight we have around the ramp-up of our supply chain and the close relationship we have with key suppliers,” Scaringe said.
Up till now, Rivian has run only one shift at the Normal plant – missing out on the chance to make vehicles (and more money) for more hours of the day.
Scaringe said the Normal plant is expected to add a second shift toward the middle of 2022. Rivian is already McLean County’s second-largest employer, with over 5,000 workers.
Rivian is making its R1S SUV, R1T pickup, and electric delivery vans in Normal. And Scaringe said they’re pleased with demand for those products; Rivian has received over 10,000 new R1 preorders since they raised prices in March, with an average price of over $93,000.
Meanwhile, Rivian leaders on Wednesday more fully explained the “R2 program” – the line of vehicles that will be made at the company’s second plant being built in Georgia. Rivian plans to hire 7,500 people at that plant, located east of Atlanta.
The R2 platform will be a “more accessibly priced” (lower price point) “mid-sized SUV targeting global markets.” The company said it plans to launch its first R2 vehicle in Georgia in 2025.
Scaringe said Rivian has learned a lot about production in Normal that will be used to set up the $5 billion plant in Georgia. Scaringe said iterative learning even happened between the “first gen” R1 line in Normal and the second line that was built to support the commercial delivery vans, for which Amazon ordered 100,000 units.
“And as we now look at Georgia, the opportunities to learn from a production line layout point of view, as well as the product itself – and pull all those together to create a world-class product in terms of affordability and (capital expense) efficiency—that is the major focus from a development point of view for our product and plant-design teams,” Scaringe said.
Rivian is spending a lot of money to do all this. It spent $547 million on research and development in the first quarter of 2022, and posted $418 million in capital expenses. Its quarterly net loss was $1.6 billion, though profitability is not expected anytime soon.
But the company has nearly $17 billion in cash, some of it from that massive IPO last fall. And it’s starting to make money on vehicle sales: It brought in $95 million in revenue in the first quarter of 2022.
