DETROIT – The upstart manufacturer of electric vehicles has been in a not so encouraging situation for several months. The firm is indeed going through a very difficult and delicate period for any young vehicle manufacturer: being able to mass-produce vehicles. It is in this phase that many suitors give up and go bankrupt.
For Rivian and its rival Lucid Group (LCID) , this phase is complicated by the disruptions caused to supply chains by the covid-19 pandemic which has led to lockdowns in China, a country home to factories of many suppliers. There is also the Russian war in Ukraine which caused the price of raw materials such as nickel to soar. All of these factors have contributed to driving up Rivian’s costs.
“Supply chain continues to be the limiting factor of our production,” the company said on August 11 in a letter to shareholders, detailing its second-quarter earnings. “Throughout the quarter, our cost of materials was impacted by inflationary pressures, which we believe will continue to be an impact for the near future.”
Quarterly net loss tripled to $1.71 billion from $580 million in the second quarter of 2022. The automaker also said it expected to lose a little more money than initially expected this year. Its annual adjusted loss before interest, taxes, depreciation, and amortization should come at around $5.45 billion. The company had previously said that it was expecting a full-year EBITDA of negative $4.75 billion.
As if managing these problems were not enough, Rivian has just created a new one and this risks impacting its reputation and its image. The automaker has just canceled cheaper versions, or entry-level versions, of its R1T electric pickup and R1S SUV. The announcement was made by an email sent to customers regarding the models known as the Explore Package.
To read more, click on The Street
