Rivian reports more losses in Q2 of 2022

Rivian, the buzzy electric vehicle company backed by Ford and Amazon, reported a net loss of $1.71 billion in the second quarter of 2022 based on $364 million in revenue. This is a sign that Rivian’s business is gaining momentum, albeit more slowly than the previous quarter in which Rivian reported a net loss of $1.59 billion based on $95 million in revenue.

The earnings report was a disappointing sign from the EV maker that was founded on a promise to propel the auto industry forward with beautifully designed, emissions-free, adventure-themed trucks and SUVs, but with some speed bumps along the way. went in.

The earnings report comes on the heels of a positive production update in which Rivian said it built 4,401 vehicles during the three-month period, a 72 percent increase over the previous quarter, and delivered 4,467 vehicles, up 267 percent. increase of. The company did not provide a breakdown between the R1T trucks and its electric delivery van (EDV) that is being built for Amazon. (Deliveries of the R1S SUV were delayed until the end of this year.)

The company will still need to churn out 18,046 vehicles over the next eight months if it is to meet its target of 25,000 this year, or about 9,023 vehicles per quarter. This will be no small feat but is certainly within the realm of possibility. During the last earnings call, Rivian said it has more than 90,000 reservations for the R1T and R1S vehicles. Now, the automaker reports that this has increased to around 98,000 reservations.

Still, the company has faced some bad water to get here. Last month, Rivian laid off about 6 percent of its 14,000 employees, or about 800 people, citing the need to cut costs to accelerate development of future versions of its electric trucks and SUVs.

Before the earnings report, Wedbush’s Dan Ives said Rivian was showing some signs of improvement. After experiencing “major issues out of the gates,” Rivian is “beginning to find its sea legs,” Ives wrote in a note, adding that the company is expected to be “a major EV stalwart in the next decade.” has capacity.

But with recent price hikes and news that a revised EV tax credit will change the landscape for EV buyers, Rivian is scrambling to respond. Under the new climate bill introduced by Senate Democrats, pricier EVs (sedans that cost more than $55,000 for new cars and pickup trucks and SUVs over $80,000) would be ineligible for a $7,500 tax credit.

Some configurations of Rivian’s electric trucks and SUVs would certainly be too expensive to qualify for the credit, which could dampen demand. Rivian also raised the prices of both its models by 20 percent, plunging its stock price and forcing CEO RJ Scaring to issue a public apology.

In response, the company sent out emails to customers and posted a support response on its website advising them to sign a “binding agreement” before the bill goes into effect to lock in the $7,500 tax credit. But it also acknowledges that it cannot “guarantee eligibility” for incentives.

Rivian reports that it has $15.5 billion in cash. It will be of great help to the automaker if it is expecting even bigger losses for the year.

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