Rivian Facing Problems Like Never Before

The first examples of the Rivian R1T truck have been delivered and more continue to roll off the assembly line. Word has it a very limited number of R1S SUVs have also begun to reach customers but full-scale production is still some time away. Rivian is also using immense time and energy to prepare the all-electric delivery van for its chief investor Amazon. The e-commerce giant placed a 100,000-vehicle order (due by the end of the decade) and the first 10,000 units were due early last month. Unfortunately, Rivian is now experiencing some early growing pains.

Per Bloomberg, the EV carmaker's stock closed at the lowest level since its IPO and subsequent trading began in November. But the reason apparently has little to do with Rivian's seemingly slow production rate but rather fresh competition.

In short, legacy automakers like General Motors and Ford, and luxury players like BMW and Mercedes-Benz are not only revealing new EVs of their own but also major technological advancements. The industry as a whole is quickly shifting towards electrification and Rivian seems to be having a hard time keeping up.

To clarify, Rivian is not in serious trouble but it does need to do something about its decreasing stock value. Its IPO was the sixth-largest in US history and the biggest one of 2021. Stocks originally traded at $78 and quickly climbed to as much as $172.01, thus giving Rivian a market value of over $100 billion, making it worth more than both GM and Ford. The latter is also another key Rivian investor.

Late last week, however, Rivian's shares were down as much as 3% following an earlier loss of 17%. Rivian already disclosed it would fall "a few hundred vehicles short" this past year, failing to reach its 1,200-unit goal. That doesn't include Amazon's vans. But the good news for Rivian (and investors) is that it's succeeding elsewhere. Preorders for the R1S increased from around 55,000 to 71,000 in the period between the end of October and mid-December. It also announced plans to build a new $5 billion production plant in Georgia to help accommodate increased demand.

Like most automakers, Rivian faced significant challenges in 2021 and it's hoping 2022 will be smoother sailing. But the key is to crank up production and get those EV trucks and SUVs into owners' driveways.