Again in October, Rivian quietly revealed that it produced simply two R1T electric trucks per day. The automaker has slowly ramped up manufacturing, however it’s nonetheless removed from reaching a sensible manufacturing quantity, and pre-orders are mounting quicker than they are often fulfilled. Unsurprisingly, the cracks are beginning to present.
The primary downside is cash. As anticipated, Rivian has drained money since 2020, accumulating an additional $1 billion in losses. And whereas the corporate has over 70,000 R1T pre-orders on its plate, prospects solely pay a $1,000 refundable deposit to order their automobile. And that brings us the Rivian’s second, very massive downside; it could’t make automobiles quick sufficient.
Once more, Rivian solely made two automobiles a day when it kicked off R1T manufacturing in October of 2021. If the automaker needed to meet its authentic listing of 55,000 pre-orders by October of 2023, it could must make 800 vans a day. That’s regular for a Ford manufacturing unit pushing out fuel guzzlers, however very troublesome for a startup constructing EVs throughout a supply shortage and pandemic.
We made our first R1S deliveries final week from our manufacturing unit in Regular, IL to RJ and our CFO Claire. We’re working in the direction of ramping manufacturing over the following few months on our approach to full quantity manufacturing. Because of our group for all of the laborious work to make it occur! pic.twitter.com/Ql9Di2ySBE
— Rivian (@Rivian) December 20, 2021
Sure, Rivian is making automobiles a bit quicker now. Nevertheless it’s accrued an additional 20,000 pre-orders, a lot of which received’t arrive till 2024 or later, in line with the startup’s CEO. Moreover, all pre-orders for the “Max Pack” R1T configuration, even when they have been filed again in 2018, are delayed until 2023 (until you alter the automotive’s configuration to a smaller battery).
By the seems of it, Rivian expects to make lower than 800 vans a day (on common) over the following two years. The corporate says it’s going to construct a second manufacturing plant to hurry issues up, however $1,000 deposits don’t construct an EV manufacturing unit. Meaning Rivian will borrow extra cash, and going deeper in debt means taking up extra pre-orders to appease lenders and traders—yeah, regular exercise for a tech startup, however not nice for an organization combating provide chain points and robust opponents like Tesla or Ford.
There’s one a part of this story we will’t gloss over; Rivian isn’t simply constructing automobiles for normal folks. The automaker has an unique deal to construct electric delivery trucks for Amazon, and it’ll quickly take orders for different industrial automobiles. Rivian’s monetary state of affairs is extremely difficult, and its stack of unfulfilled pre-orders doesn’t essentially replicate on the corporate’s well being or hurdles.