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Main Article: Electric Vehicles (Global Market)
Rivian American is a developer. electric vehicles The first product was the R1T pickup truck, which is similar in size to the Ford Ranger or Chevrolet Colorado. This car is capable of transporting goods weighing up to 800 kg and driving up to 640 km without recharging. The pickup, the start of sales of which is scheduled for the second half of 2020, is equipped with four electric motors with a total capacity. The cost will start at $61,500 . By July 15, 2020, pre-orders are accepted. One of the features of the R1T is that two electric cars connected by a charging cable can charge each other.
The company was founded in 2009 and originally operated under the name Mainstream Motors. She was subsequently renamed Rivian.
Performance indicators
2023: Loss - $5.43 billion
In 2023, the American electric car manufacturer Rivian received net losses of $5.43 billion. For comparison, a year earlier, the company's losses amounted to $6.75 billion. This is stated in the financial report published on February 21, 2024.
Rivian's annual revenue was recorded at $4.43 billion, which is 167% more than in 2022. Operating expenses for the year remained practically unchanged - $3.719 billion compared to $3.73 billion in 2022. During 2023, the company produced 57,232 vehicles and actually delivered 50,122 vehicles. Thus, its own forecast for the production of 54,000 vehicles has been exceeded.
By the end of 2023, Rivian's loss for each electric car sold was $43,372. This is approximately $81 thousand less compared to the losses recorded a year earlier: $124,162 per vehicle. Rivian says a comprehensive, company-wide cost-cutting program helps reduce losses. In addition, measures are being taken to improve production efficiency.
At the same time, due to the difficult macroeconomic situation and high inflation rate, Rivian is forced to reduce the number of personnel. The staff is expected to be cut by 10%. The company also warned of a slowdown in car sales - including due to increased interest rates. In 2024, Rivian expects to produce about 57 thousand electric vehicles, that is, about the same or slightly less than in 2023.
Economic and geopolitical uncertainties, as well as historically high interest rates, have a negative impact on business operations, says the company's management.[1]
2022: Losses rise to $6.75 billion
At the end of 2022, the American manufacturer of electric vehicles Rivian showed net losses of $6.75 billion, while a year earlier the losses were $4.69 billion. Such data are contained in the financial report submitted on February 28, 2023.
At the same time, the company dramatically increased revenue. If in 2021 it amounted to $55 million, then in 2022 it reached $1.66 billion. Thus, a 30-fold increase was recorded for this indicator. During 2022, Rivian produced 24,337 electric vehicles and delivered 20,332 vehicles to end customers. The company says that demand remains "stable," but so far there are outstanding orders.
Rivian emphasizes that in 2022 it faced serious problems related to the operation of supply channels. The company's inability to quickly increase production at its plant in Normal (Illinois) led to limited sales. Rivian produces a pickup truck, SUV and delivery van equipped with an electric power plant.
 | Supply chains continue to be a major limiting factor in our production. We faced several downtime due to a lack of components. We expect supply chain problems to continue into 2023, the automaker said in a statement. |  |
Rivian said that although inflation was one of the factors that negatively affected the company's work, it will continue to take steps to increase production and reduce material costs by simplifying the design of vehicles. For example, the upcoming R2 model will use a simplified assembly process and an optimized sourcing model to achieve a "significantly lower cost structure." In addition, measures will be taken to reduce commercial costs.[2]
History
2024: Downsizing
On April 17, 2024, the US electric car maker Rivian, which is suffering losses, announced a reorganization aimed at reducing costs and improving its financial situation. This program assumes a reduction in headcount by approximately 1%.
As of that date, Rivian does not specify exactly how many people will be fired or which units will be affected by the restructuring. It is noted that the changes are necessary to optimize the operating structure against the background of a slowdown in demand for electrified vehicles.
| | It was a difficult decision, but it is necessary to achieve our goal of delivering positive gross margins by the end of [2024]. The changes affect about 1% of our workforce, the automaker said in a statement. | |
This program was the fourth round of layoffs at Rivian in two years. The company cut 10% of its staff in February 2024, another 6% in February 2023 and 6% in July 2022. Reduced employees will receive monetary compensation and other due payments provided for by law.
Lower costs are crucial for Rivian as high interest rates and a challenging macroeconomic environment have reduced demand for electric vehicles, which are typically more expensive than their petrol counterparts. Rivian reduces costs by making some parts on its own and renegotiating supply contracts. In addition, production lines are being upgraded to improve efficiency. In the first quarter of 2024, the company produced 13,980 electric vehicles, of which 13,588 were delivered to customers. At the end of 2024, in general, Rivian expects to produce approximately 57 thousand cars.[3]
2023:6% staff cut due to US crisis
In early February 2023, the American manufacturer of electric vehicles Rivian began a new stage of staff reduction in order to reduce the company's costs. The layoffs are taking place against the backdrop of the crisis in the United States.
According to Rivian Automotive, 6% of employees fall under the reduction. The measures were taken by the company in an attempt to preserve financial stability as it prepares for a possible price war in the industry, according to the American business newspaper The Wall Street Journal. As of February 3, 2023, about 14 thousand employees work for the company.
In an email to employees, Rivian Chief Executive Officer Er Jay Skaring said that improving the company's operating efficiency should be a "top priority." This measure will allow Rivian to increase production without raising additional funds. The state cuts will not affect jobs at the Illinois plant, Skaring said. The company needs to prioritize reaching profitable levels and producing the first models of electric vehicles, as well as developing other proposals to expand the model range in the automotive industry. Er Jay Scaringe did not give a clear timeframe for the latest phase of redundancy at Rivian.
At the end of 2021, Rivian successfully held an initial public offering, raising about $12 billion. But the California automaker's stock has since lost nearly 90% of its value, forcing the company to reconsider its plans to expand production as it works to improve margins. The price cuts and Tesla Ford Motor in early 2023 raised concerns among Rivian management that other automakers could be forced to lower prices for electric vehicles amid growing competition in the area.
In 2023, Rivian focused on ramping up production of its R1 trucks and the EDV vans it assembles for Amazon, as well as developing its future more compact R2 platform, according to The Wall Street Journal. In January 2023, the company announced that it had fallen slightly short of its goal of producing 25,000 cars in 2022.[4]
2022
Recall almost all of its cars due to falling off wheels
On October 7, 2022, Rivian announced a large-scale recall program for its vehicles: an issue has been identified that could potentially lead to the driver losing control of the car. Read more here.
Soros Foundation bought a stake in Rivian for $2 billion
In mid-February 2022, George Soros became the owner of shares in Rivian electric vehicles for $2 billion, but the fund of the American billionaire at the same time reduced its stake in Amazon and Alphabet. Investors are actively investing in Rivian, despite the fact that by February 2022 the company had not yet begun mass production of cars.
In total, Soros Fund Management acquired 19 million shares in the startup, making the fund one of the company's main investors. For February 2022, the Soros Foundation is the most famous investor in the company, which has not yet produced production cars. According to the results of the first quarter of 2022, the value of American shares in the Soros Fund Management portfolio increased by $1.2 billion and amounted to $6.5 billion. The total value of assets under the management of the fund exceeded more than $28 billion.
As of February 14, 2022, Amazon owns a 20% stake in the startup. The online retailer plans to use vans from Rivian to deliver orders. By 2024, Amazon intends to increase their number to 100 thousand due to the fact that the company is switching to electric vans as part of an initiative to combat climate change and reduce harmful emissions into the atmosphere. By 2030, the online retailer must bring emissions to zero. Amazon senior vice president Dave Clark called the contract the largest electric vehicle order in history.
By February 11, 2022, Rivian shares soared to a value of $179.46, after placing them on the public exchange on November 16, 2021. In early 2022, when Rivian began reporting production problems and capacity-building problems to compete with Tesla, the stock price began to decline. By mid-February 2022, quotes sank 67% relative to the maximum values.[5]
2021
Market capitalization - $100 billion
On November 11, 2021, the manufacturer of electric vehicles Rivian entered the Nasdaq stock exchange (ticker - RIVN). This placement is in the top 10 primary public offerings (IPOs) of all time in the United States. The stock was valued at $78 each, well above the company's target range.
As part of the listing, investors invested more than $11.9 billion in Rivian shares, their interest is explained by the fact that the company is supported by the Internet giant Amazon. On the first day of trading, Rivian shares rose 30% to the close of the exchange, and during the day growth reached 53%, thanks to which the market capitalization exceeded $100 billion.
| | Rivian exists to create products and services to help our planet transition to carbon-neutral power and transportation, R.J. Scaringe, the company's founder and chief executive, said in a submission to the company by the Securities and Exchange Commission (SEC) before the stock offering. | |
Rivian only began delivering its first electric pickup trucks to customers on September 15, 2021. The company has outperformed rivals including Ford and General Motors in the small truck, pickup truck and SUV market segment, which is popular with American drivers. Alongside the pickup truck, Rivian is due to begin rolling out its SUV in December and cargo van in 2023.
Rivian has promising starting positions, with 55,400 consumers making a fully refundable $1,000 deposit to queue for one of its pickup trucks or SUVs. For comparison, the refundable deposit of Ford and Tesla is only $100. Rivian recently invested heavily in the production of the R1T, which is designed as an ambitious outdoor adventure-style car. But crucial to investor interest is the firm's relationship with Amazon, which not only owns 20% of Rivian but also said it would buy 100,000 electric trucks from it once the firm starts producing them.[6]
Going public
In early October 2021, it became known that the manufacturer of electric vehicles Rivian, with the support of Ford and Amazon, entered the Nasdaq exchange under the ticker symbol RIVN. The company conducted its IPO confidentially back in August.
| | We are in the development stage and have not received significant revenue to date, "Rivian representatives said in an application to the US Securities and Exchange Commission (SEC). Car production and deliveries began in September 2021. | |
Rivian says it has pre-orders for just over 48,000 R1T and R1S vehicles in the United States and Canada. Pre-order customers made a fully refundable deposit of 1,000 each, and this is the company's only income so far. For the first half of 2021, Rivian recorded a net loss of $994 million with zero revenue. The company's net loss for the full year 2020 amounted to $1.02 billion.
As the documents suggest, Rivian expects revenue to initially come primarily from Amazon:
| | In the near future... we expect a significant portion of our revenue to come from Amazon Logistics. | |
Both Amazon and Ford own more than 5% of Rivian, and Peter Kravetz, Amazon's senior vice president, sits on Rivian's board.
Rivian entered into a cooperation agreement with Amazon in 2019. Under the terms of this agreement, Rivian is engaging with Amazon's logistics segment "in the design, development, production and delivery of [electric delivery vans]. Rivian electric vehicles are designed for use in Amazon's "last mile" delivery operations. Amazon has certain exclusive rights to Rivian electric delivery vans, which last for four years.
Rivian management announced that it plans to begin deliveries of an electric crossover R1S in December 2021.[7]
The company is the first in the world to start supplying electric trucks
In September 2021, Rivian Automotive Inc., an electric pickup truck maker backed by Amazon Inc., said it had received all the necessary certifications and could begin shipping its debut electric vehicle to American customers.
The company's founder, EJ Skaring, announced that the first "customer car," the R1T electric pickup truck, had come off the production line in Normal, Illinois.
The electric car maker was the first to enter the consumer market with an electric pickup truck. It overtook Tesla, General Motors and others.
General Motors is expected to enter the market with the GMC Hummer EV pickup truck in the fall. Ford's EV Lordstown Motors will follow next year. Elon Musk's Tesla recently pushed back the start of mass production of its Cybertruck to the end of 2023.
2020
Tesla accuses electric car maker Rivian of stealing trade secrets
U.S. electric car maker Tesla Inc. filed a lawsuit in July against rival startup Rivian, accusing it of stealing trade secret information.
| | "Tesla has found a troubling trend with employees moving to Rivian stealing trade secrets, confidential and proprietary Tesla information that could be particularly useful to an electric vehicle start-up," the statement of claim, quoted by CNBC, said. | |
Tesla believes that "Rivian deliberately promotes misappropriation" of this information.
A Rivian spokesperson, in a comment to CNBC, called the statements "baseless" and contrary to the company's corporate policies.
According to Tesla, among 2.3 thousand Rivian 178 employees, they used to work for Tesla. The lawsuit names four employees.
This is not the first time Tesla has accused its former employees of stealing sensitive information. In 2019, the company filed a lawsuit against four of its former employees, accusing them of transferring confidential information to startup Zoox Inc., which develops self-driving cars. The case was settled in April of this year, when Zoox agreed to pay compensation.
Raising $2.5 billion in investments
In mid-July 2020, Rivian, known for creating electric vehicles that charge each other, raised $2.5 billion in investments. At the same time, the market value of the automaker is not called.
The company's founder and CEO, R.J. Scaringe, decided not to take the company public and instead turned to strategic funds and other private investors for capital. The July 2020 funding round was attended by new investors: Soros Fund Management LLC, Coatue, Fidelity Management and Research Company and Baron Capital Group. Current shareholders Amazon and funds managed by BlackRock also joined the round.
Rivian is developing electric delivery vans for Amazon. Amazon has ordered 100,000 of these vehicles. Rivian is also preparing a plant in Normal, Illinois, to assemble an electric pickup truck R1T and R1S SUV. All three models are expected to hit the market or directly to Amazon in 2021. Production of the R1T and R1S was supposed to begin back in 2020, but was delayed due to. COVID-19 pandemic
| | Now we have thrown all our strength into the production of R1T, R1S and Amazon electric vans. Our teams are actively working to ensure that all supply chains and production systems are ready for an intensive increase in production. We are grateful for the support of investors, which helps us focus on the implementation of our plans, "Scaringe said in July 2020. | |
Meanwhile, Rivian's cooperation with Ford was suspended as the COVID-19 coronavirus pandemic forced Ford to stop working in this direction. Lincoln Motor, a luxury brand run by Ford, has canceled plans for an all-new Rivian-based electric vehicle. The companies said that external circumstances were the main reason for the deal to break, and they still do not lose hope in the future to jointly develop an electric car.
In mid-June 2020, Rivian tested the R1T electric pickup truck in the Arizona desert. The car is driven by four electric motors with a total capacity of 769 horsepower.[8]
2019: Raising $700 million in investments, including from Amazon
In mid-February 2019, Rivian announced a funding round, as a result of which the company raised $700 million. She invested the most, Amazon but the exact size of the investment was not disclosed. The capitalization estimate is also unknown. startup
Earlier in February 2019, Reuters, citing its informants, reported on the intentions of Amazon and General Motors to invest Rivian and value the electric car manufacturer at $1-2 billion.
| | This investment is an important step not only for Rivian, but also for the global transition to environmentally sustainable mobility, - said the founder and CEO of the company Erjay Scaringe (RJ Scaringe). | |
Morgan Stanley analyst Adam Jonas, speaking about the reasons for Amazon's investment, said that the Internet retailer is interested in developing its own logistics services, and Rivian technologies are suitable for creating electric machines capable of carrying heavy loads.
Rivian will continue to operate as a standalone company. It has a staff of about 600 by February 2019. They work in the London office and in four factories in the United States.
According to Erjay Scaringe, Rivian intends to attract more partners to cooperate, but not because of money, but to develop "strategic relations."[9]
Notes
- ↑ Rivian Releases Fourth Quarter and Full Year 2023 Financial Results
- ↑ 2022 Rivian Shareholder Letter
- ↑ Rivian cuts 1% of workforce in second round of layoffs this year
- ↑ Rivian to lay off 6% of its workforce as EV price war concerns grow
- ↑ Billionaire Soros buys stake in EV startup Rivian
- ↑ Electric truck maker Rivian raises almost $12bn from share sale
- ↑ Electric vehicle maker Rivian has filed to go public
- ↑ Rivian raises $2.5 billion as it pushes to bring its electric RT1 pickup, R1S SUV to market
- ↑ Electric truck startup announces $700 million funding round led by Amazon
Stock price dynamics
| Ticker company on the exchange: | NDAQ:RIVN |
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