Rivian (SHORE) – Get the Class A report from Rivian Automotive, Inc. was scared but the electric vehicle manufacturer made up for it well.
The young manufacturer of electric SUVs and pick-ups has just cleared some of the many doubts hanging over its short-term future.
The Irvine, Calif.-based company confirmed its production target of 25,000 vehicles in 2022, despite supply chain disruptions, chip shortages and soaring raw material prices. These problems made it difficult to increase production rates.
“Based on our latest understanding of the supply chain environment, we reaffirm the full-year guidance provided in our fourth quarter and full year 2021 earnings call of 25,000 total units of production,” the company said in a letter to its shareholders.
As of May 9, the automaker had produced about 5,000 vehicles.
“The supply chain continues to be the bottleneck of our production. This challenge has continued on a small handful of technical components such as semiconductors, as well as a few non-semiconductor components,” explained Rivian.
An affordable mid-size electric SUV
“Since March 31, 2022, we have been forced to stop production for longer periods than planned, resulting in the loss of approximately a quarter of the planned production time due to supplier constraints.
But “encouragingly, as we demonstrate our production ramp, our suppliers are leaning in to help us achieve our goals,” the company added.
Rivian also said it ended the first quarter with $17 billion in cash, which seems enough to launch an affordable midsize SUV, the R2, at a new plant.
“We have optimized our product roadmap and associated operating expenses to ensure we have the ability to launch R2 in Georgia in 2025 with our current cash flow,” the company explained.
Rivian signed an agreement with authorities in the US state of Georgia in early May. The deal will allow the automaker to accelerate construction of a $5 billion plant east of Atlanta. It will be the company’s second vehicle production site after Normal, Ill.
Construction is expected to begin this summer with the first vehicles expected to roll off the production line in 2024. Once manufacturing operations are fully ramped up, the plant will be able to produce up to 400,000 vehicles per year.
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The deal will also give Rivian, which was founded in 2009 and went public in 2021, $1.5 billion in Georgia state grants. The manufacturer currently produces three vehicles at its Normal plant: the R1T electric pickup, the R1S electric SUV and the RCV electric utility van.
As of May 9, Rivian has had over 90,000 net pre-orders of R1T from consumers in the United States and Canada, including 10,000 pre-orders since its price increase in March, with an average price of over $93,000, the company said.
These figures show that demand for Rivian vehicles remains strong.
Ford sells, Soros buys
Rivian shares, which had lost 78% of their value to $22.79 since January before the May 11 announcements, have since gained 29.61% to $26.70 in two trading sessions.
This did not, however, prevent Ford (F) – Get Ford Motor Company report, a major shareholder of Rivian, to sell additional shares. In a document filed on the evening of May 13 with the Securities and Exchange Commission, the historic automaker said it sold 7 million Rivian shares the same day at a price of 26.88 dollars. Ford now owns just 86.95 million Rivian shares.
This is the second time in less than a week that Ford has sold Rivian shares. On May 9, the auto giant sold 8 million Rivian shares for $26.90.
After rising in value in 2021, Ford’s stake in Rivian has fallen sharply since January, leading to significant losses for the automaker. Ford’s stake in Rivian was valued at $5.1 billion on March 31, down more than half from $10.6 billion at the end of 2021, the company said.
Ford rivals Rivian, with the all-electric F-150 Lightning pickup.
If Ford sells, Rivian’s other shareholders maintain their confidence in it. This is the case of the e-commerce giant Amazon (AMZN) – Get the report from Amazon.com, Inc.which retains its 17.74% stake intact as of December 31.
“Rivian is an important partner for Amazon, and we are excited about the future,” a spokesperson said in an emailed statement. “Getting 100,000 electric delivery vehicles on the road by 2030 is no small feat, and we remain committed to working with Rivian to make it a reality.”
The legendary investor George Soros has also just granted Rivian a nice mark of confidence. Indeed, Soros Fund Management has increased its stake in the automotive group.
The company held nearly 20 million Rivian shares – 19,835,761 – as of December 31, valued at $2 billion. But as of March 31, Soros Fund Management has purchased just over 6 million additional Rivian shares — 6,045,000 — according to a May 13 filing with the SEC.
In total, the billionaire’s fund owns just over 25.88 million Rivian shares, valued at just over $691 million at Rivian’s closing share price on May 13.