Despite numerous challenges, things are looking strong for electric brand Rivian.
American EV manufacturer Rivian has had a troubled year, but buried within its Q3 sales report, the brand disclosed 114,000 preorders for the R1 platform vehicles resulting in the all-new R2 platform being delayed until 2026.
Rivian has been having a troubling year, with production numbers cut down from 50,000 to 25,000, a spate of recalls, and feature cuts in light of the semiconductor chip shortage. This has led the company to cut projected revenue and burn even more of its cash to ramp up production. Subsequently, the company announced a third-quarter loss of $1.72 billion, nearly half a billion more than it lost in Q3 last year.
It isn't all bad news, though. During Wednesday's earnings call, the company announced it is still sitting on 114,000 preorders for the R1T and R1S and a 100,000 vehicle backlog to fulfill the Amazon EDV delivery van contract. It also reaffirmed the 25,000 production target number for the year.
In the third quarter, the company produced 7,363 vehicles and delivered 6,585. That means the company has built 14,317 vehicles year-to-date (YTD) and is confident the 10,683 vehicles required to reach its 2022 goals are within reach for the final quarter. However, the company missed out on its estimated revenue of $561.1 million for the quarter, instead reporting $536 million.
The automaker is focused mainly on the ramping up of production. From Q3 to Q4, it saw a 67% increase in production. Its only factory, in Normal, Illinois, has already begun a second manufacturing shift and will take time to optimize but is currently contributing to the overall volume. We imagine then that a 45% increase for the last quarter should be doable, barring any major production setbacks.
The 114,000 preorder number has been helped by the fact that just last month, Rivian was cleared to export and sell vehicles in Canada. It's also benefited from the recent EV startup trend of procuring these sales without the use of any paid ads, something rival Tesla has used to great effect.
As of right now, Rivian believes that things are on track. It's still sitting on $13.8 billion in cash thanks to the brand's massive IPO last year and says it'll have the money to run the company until 2025 comfortably.
The next boon for the brand will be the construction of its Georgia factory, although that is being delayed by a ruling in Georgia that would deny the automaker much-needed tax breaks. Despite this, it says it is still dedicated to bringing the $5 billion project to the state after reassessing its options. The delay has, however, forced the company to move back the planned release of its next-gen R2 vehicle platform.
Previously slated for release by 2025, the second-gen skateboard platform - dubbed R2 - was set to underpin an exciting new model in the next few years. Rivian is still hoping to break ground on the new facility by 2024, but the tentative release date for the first R2-based vehicle has been pushed back to 2026.
While the R2 will be scalable for smaller vehicles in future, the brand still has plans and uses for the current R1 platform. A rumored R1X hardcore off-roader is expected in the next few years with more than 1,200 horsepower, which should serve as the halo the brand needs to establish itself as a performance EV brand.