Rivian (RIVN) – Retrieve the Rivian Automotive, Inc. Class A report got scared, but the electric vehicle maker made up for it nicely.
The fledgling maker of electric SUVs and pickups has just cleared some of the many doubts surrounding its near-term future.
The Irvine, California-based company confirmed its production target of 25,000 vehicles in 2022, despite supply chain disruptions, chip shortages and rising commodity prices. These problems have made it difficult to increase production rates.
“Based on our latest understanding of the supply chain environment, we reiterate the full-year guidance we provided during our fourth quarter and fiscal 2021 earnings call for a total of 25,000 production units,” the company said in a letter to its shareholders.
As of May 9, the automaker has produced ~5,000 vehicles.
“The supply chain is still the bottleneck of our production. This challenge has continued through a small handful of technical components such as semiconductors as well as some non-semiconductor components,” Rivian explained.
An affordable mid-size electric SUV
“Since March 31, 2022, we have been forced to halt production for longer than expected, resulting in approximately a quarter of planned production time being lost due to supply shortages.”
But “happily, while we demonstrate our production ramp, our suppliers are leaning in to ensure we can meet our targets,” the company added.
Rivian
Rivian also said it closed the first quarter with $17 billion in cash, which appears to be enough to launch an affordable mid-size SUV, the R2, at a new plant.
“We have optimized our product roadmap and associated operational costs to ensure that with our current cash position we have a path to launch R2 in Georgia in 2025,” the company said.
Rivian signed an agreement with authorities in the US state of Georgia in early May. This agreement will allow the automaker to accelerate construction of a $5 billion factory east of Atlanta. This will be the company’s second vehicle manufacturing facility after Normal, Illinois.
Construction is scheduled to begin this summer, with the first vehicles expected to roll off the assembly 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 agreement will also bring Rivian, which was founded in 2009 and went public in 2021, $1.5 billion in public subsidies from Georgia. The automaker currently produces three vehicles at its Normal plant: the R1T electric pickup, the R1S electric SUV and the RCV electric van.
As of May, Rivian recorded over 90,000 net R1T pre-orders from consumers in the US and Canada, including 10,000 pre-orders since March price hikes, with an average price of over $93,000, the company said.
These numbers show that demand for Rivian vehicles remains strong.
Selling Ford, buying Soros
Rivian shares, which had lost 78% of their value to $22.79 since January prior to the May 11 announcements, have since gained 29.61% to $26.70 in two trading sessions.
However, this did not stop Ford (f) – Retrieve the Ford Motor Company Report, one of Rivian’s major shareholders, from selling any more shares. In a document filed with the Securities and Exchange Commission on the evening of May 13, the legacy automaker said it sold 7 million Rivian shares for $26.88 on the same day. Ford now owns just 86.95 million Rivian shares.
This is the second time in less than a week that Ford has sold Rivian stock. On May 9th, the auto giant sold 8 million shares of Rivian at a price of $26.90.
After appreciating in 2021, Ford’s stake in Rivian has fallen sharply since January, leaving the automaker with big losses. Ford’s stake in Rivian was valued at $5.1 billion as of March 31, down more than half from $10.6 billion at the end of 2021, the company said.
Ford competes with Rivian with the F-150 Lightning all-electric pickup.
Rivian
When Ford sells, other Rivian shareholders retain their faith in Ford. Such is the case with e-commerce giant Amazon (AMZN) – Get report from Amazon.com, Incwhich keeps intact its stake of 17.74% as of December 31st.
“Rivian is an important partner for Amazon and we look forward to the future,” a spokesman said in an emailed statement. “Having 100,000 electric delivery vehicles on the road by 2030 is no small feat and we remain committed to working with Rivian to make this a reality.”
Legendary investor George Soros has just given Rivian a big vote of confidence. In fact, Soros Fund Management has increased its stake in the automaker.
The company held nearly 20 million Rivian shares — 19,835,761 — worth $2 billion as of Dec. 31. But as of March 31, Soros Fund Management has bought 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 shares of Rivian, valued at just over $691 million at Rivian’s closing price on May 13.