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Rivian leaders stress path to profitability, including a busier plant in Normal

Blue Rivian R1T
Emily Bollinger
/
WGLT file
Rivian said Tuesday that its 2023 production target is 50,000 vehicles, double what it made last year in Normal. Rivian recently added a second shift in Normal, making R1 model electric trucks and SUVs. They’re working through a backlog of orders that extends into 2024.

Top officials at Rivian told investors over and over again Tuesday that they have a plan to become profitable – and that involves a much more productive manufacturing plant in Normal.

The electric automaker lost $6.8 billion in 2022, the company said during Tuesday’s quarterly financial call with investors. Red ink was expected in these early years, as the company spends billions to ramp up production in Normal and build a second plant in Georgia. It took 18 years for the EV pioneer Tesla to turn a full-year profit.

Yet Rivian is a publicly traded company, and pressure is mounting. Earlier this month, the company reportedly made plans to cut 6% of its workforce. There’s a companywide program underway to “maximize efficiency … across the key cost elements of material costs, logistics, labor and overhead, indirect costs, and capital expenditures.”

“Our objective continues to be driving toward profitability and our prudent deployment of capital,” Rivian’s chief financial officer Claire McDonough said Tuesday.

That means increased production at Rivian’s plant in Normal, which already has 7,100 full-time workers and is McLean County’s second-largest employer.

Rivian said Tuesday that its 2023 production target is 50,000 vehicles, double what it made last year in Normal. Rivian recently added a second shift in Normal, making R1 model electric trucks and SUVs. They’re working through a backlog of orders that extends into 2024.

The company plans to shut down production for a week late this year and for several weeks in early 2024 to incorporate new technology in the plant that will increase overall capacity.

The goal is to bring annual R1 production capacity from 65,000 vehicles today up to 85,000. The plant theoretically has room to make 150,000 vehicles per year.

“Producing highly vertically integrated vehicles at low volume, on lines designed for higher volumes, means we’re currently carrying more overhead per vehicle produced,” McDonough said. “This impact has and will continue to be magnified during the ramp of our second shift of production as we introduce new technologies, like our LFP (lithium iron phosphate) battery pack and Enduro motor.”

Founder and CEO RJ Scaringe said supply constraints continue to be the biggest drag. The line making electric delivery vans (currently for Amazon) is still only on one shift, he said.

“We wish we could have the components to fully run the plant, across all lines, across multiple shifts, but that’s not the case,” Scaringe said.

Ryan Denham is the digital content director for WGLT.
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