Dear reader,
As climate change continues to threaten, electric vehicles promise a sustainable future of transportation. And no company captures imagination more than Rivian – the maverick EV startup driving headlong to set new standards.
Founded in 2009 to rethink electric mobility from the chassis up, this Michigan based firm burst into the public consciousness in 2021 with the launch of the R1T pickup and R1S SUV. Built on Rivian‘s own flexible skateboard architecture housing battery packs, these vehicles upend expectations of what an electric vehicle can deliver.
Let‘s look deeper at Rivian‘s progress so far and the financial headwinds they face as part of a long term roadmap:
Rivian Charges Ahead Where Tesla Once Stood
Rivian has come far since its early days a decade ago. Their Normal, Illinois manufacturing plant can produce 50,000 vehicles currently, on track for 250,000 capacity by 2023. That mirrors Tesla‘s journey in many ways.
In 2013, Tesla produced just over 20,000 vehicles with under 250,000 capacity worldwide. Yet within 3 years, Tesla ramped up to produce over 300,000 vehicles globally.
Rivian‘s prospects for exponential growth are similarly strong as the market itself expands – in 2015 just 500,000 EVs were sold globally. Yet by 2022, over 7 million are projected to ship. Rivian is tracking to match demand.
And much like Tesla, Rivian ships some of the market‘s most technologically advanced and environmentally sustainable vehicles. The R1T pickup truck is rated for over 300 miles of range alongside 0-60 acceleration under 3 seconds – figures unheard of among combustion engine pickups.
This combination of performance, utility and environmental efficiency both enables Rivian to stand out and informs its vision for the future of the automobile.
Financial Losses Reflect Investment Required for Growth
In any pioneering industrial venture, ramping up production comes at immense upfront capital investment – as also faced by the likes of Ford and Tesla historically.
Rivian has seen losses mount the past year:
- Q1 2022 losses hit $1.59 billion, up from just $414 million year prior
- Share prices dropped from highs over $170 down below $30 by July 2022
- Just 1,227 vehicles produced by end Q2 2022 vs 50,000 initially projected
Data Source: Rivian Q2 2022 Earnings Report
These sharp losses and missed targets understandably shook investor confidence. But they primarily reflect the immense costs involved in nearly doubling manufacturing capacity in a year while navigating global supply chain woes.
Rivian‘s end goal requires rapidly getting production into the tens of thousands this year before reaching 150,000 annually within this decade across both consumer and commercial vehicles.
That is the long term focus guiding near term decisions to cut costs, acquire revenue generating companies like AitoGrid, and form strategic partnerships expanding manufacturing bandwidth.
The Road Ahead – Execute and Innovate
Rivian has charted a three pronged approach to drive toward profitability by end of 2025:
Ramp Up Production: Investments to double existing manufacturing lines and upgrade technology to achieve 25,000 vehicles produced annually by end 2023.
Strategic Acquisitions: The purchase of key startups including AitoGrid and InMotion catapults Rivian‘s capabilities in fleet software services and European markets.
Leverage Partnerships: Amazon has ordered 100,000 electric vans from Rivian by 2025. Partners like Ford add further production means.
Rivian‘s wider expansion strategy also banks on globally diversifying with factories across US, Europe and China supplying every major geography. Meanwhile R&D continues fast tracking wireless charging and handsoff driving technology to stay ahead.
In the Driver‘s Seat Toward an Electric Future
Executing the strategy will be intensely challenging. But Rivian seems primed for the long haul with several key advantages:
Proven Leadership – CEO and founder RJ Scaringe leads with technical prowess from MIT and insight on sustainable mobility from two decades growing Rivian.
Financial Backing – Over $15 billion sourced so far from top firms including Ford, Amazon
and T. Rowe Price underscores investor confidence.
Customer Focus – 72,000 reservations today signals strong appetite for adventure ready, sustainable Rivian vehicles.
Prime Market Positioning – Early leadership in still exponentially growing electric pickup and SUV segments points opportunity.
Environmental Priorities – Rivian‘s commitment to green production and transport shines through. The right values for the times.
By focusing its unmatched knowhow and technology on efficient execution, Rivian seems on cruise control to realize its compelling vision. I will leave you to decide whether you‘d care to hop aboard for the ride at this point too!
Let me know your thoughts.
John
EV Analyst and Consumer Reports
