Rivian Automotive Inc. expects heavy losses to continue as it boosts production plans for the year and works to reestablish itself as a rising player in the increasingly crowded EV market.
(Bloomberg) — Rivian Automotive Inc. expects heavy losses to continue as it boosts production plans for the year and works to reestablish itself as a rising player in the increasingly crowded EV market.
The company will build about 52,000 vehicles in 2023, according to a statement Tuesday, up from a prior goal of 50,000.
Still, the shares fell in postmarket trading after Rivian predicted an adjusted loss of $4.2 billion this year before interest, taxes, depreciation and amortization. While that’s a $100 million improvement from prior guidance, it’s narrowly short of the $4.18 billion loss projected by analysts.
The mixed outlook underscores the challenge to reach profitability as Rivian confronts cost pressures in an increasingly crowded EV market. The Irvine, California-based company cited “progress we have seen to date on our production lines, the ramp of our in-house motor line and the supply-chain outlook” for its revised expectations.
What Bloomberg Intelligence Says:
“Rivian and other nascent EV pure-plays are coming to terms with a demand crunch, challenged to find enough buyers beyond the initial wave of early EV adopters. Deliveries have failed to keep pace with output for four consecutive quarters, complicating a goal to produce the raised target of 52,000 vehicles in 2023, with the ramp-up needed to push down costs.”
— Kevin Tynan, transportation analyst
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Reliable production growth is critical for Rivian to regain the momentum that propelled it to a blockbuster market debut in 2021, when it was considered a leading contender among a pack of EV startups vying to become the next Tesla Inc. Rivian has stumbled more recently while grappling with supply constraints, rising competition and cost concerns that led to job cuts.
Its shares slipped 2.6% as of 5:11 p.m. in postmarket trading in New York, reversing an earlier gain. The stock jumped 35% this year through Tuesday’s close following a recent rally that has put pressure on short sellers.
Rivian said last month that it produced 13,992 vehicles — more than analysts had predicted — and delivered 12,640 to customers in the three months ended June 30. The company makes a pair of consumer vehicles and a battery-electric delivery van for Amazon.com Inc., its biggest shareholder.
The boosted full-year target comes after Rivian narrowly missed its goal of building 25,000 vehicles last year. Executives in March told employees internally that output of 62,000 this year was possible, Bloomberg has reported.
Rivian lowered its capital expenditures guidance for the year to $1.7 billion. The reduction, from the previous forecast of $2 billion, was due to a shift in timing of some planned expenses to next year.
The company lost $1.08 a share on an adjusted basis in the second quarter, better than the average $1.37 deficit expected by analysts in estimates compiled by Bloomberg. Revenue rose to $1.1 billion, including $34 million of regulatory credits. It ended the quarter with $10.2 billion in cash, cash equivalents and short-term investments.
“The company has a low margin for error in all aspects of its business. Its limited production and commercial history leaves much to be seen,” Wells Fargo analyst Colin Langan said in a note. “Rivian must prove it can acquire the customer base, while maintaining low advertising costs.”
–With assistance from Sean O’Kane.
(Updates to recast first paragraph, add details throughout. A previous version corrected the description of the loss forecast.)
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