Whatās Going On Here?Rivian gave a worse-than-expected update late last week, but the carmakerās lacking all the right stuff it needs to put itself back together again. What Does This Mean?Rivianās first quarter as a public company was destined to be tough: it admitted in December that it wasnāt going to make enough electric vehicles (EVs) to reach its 2021 production targets. So with only 909 EVs delivered last quarter, Rivian brought in just $54 million in sales ā 10% lower than analysts were expecting.
Rivianās 83,000 customer pre-orders might sound like the road to recovery, but it just canāt make enough cars to keep up: itās only made about 1,400 so far this year. And donāt expect many more anytime soon: it said itāll struggle to get key parts for its EVs while supply issues continue, so itās halved this yearās production expectations to 25,000. Why Should I Care?For markets: Buyers are moving on.
Rivian boasted a $153 billion market value at its peak last year, but thatās since dropped to under $40 billion (tweet this). After all, itās had its fair share of problems on top of those production issues. For one, Rivianās proposed price hike brought about intense backlash from some customers earlier this month, with plenty of them canceling their orders. And for another, Amazon ā which agreed to buy 100,000 vans from Rivian ā said in January that itāll also start buying electric vans from rival carmaker Stellantis in the future, passing up any more orders with Rivian.
The bigger picture: Follow the market leader.
Rivianās taking a leaf out of Teslaās book: it announced plans to start using new LFP batteries in its EVs, just like the market leader did back in October. Looks like the right time to switch: the batteries sacrifice some driving range, sure, but they donāt use nickel or cobalt ā two key battery metals that have soared in price since war broke out in Europe. | 