Electric vehicle startup Rivian hits new low after production cuts in 2021

A Rivian R1T electric pickup truck during the company’s IPO outside the Nasdaq MarketSite in New York, Wednesday, November 10, 2021.

Bing Guan | Bloomberg | Getty Images

Shares in Rivian Automotive, an electric car startup that went public last month thanks to a blockbuster IPO, fell to a fresh low on Friday after the company cut its 2021 car production plan.

After markets closed on Thursday, Rivian said it expects “several hundred less” of this year’s planned production of 1,200 vehicles. The company said it faced supply chain challenges as well as increased production of sophisticated battery packs that power cars.

“Developing a production system like this, as I said, is a really complex orchestra,” said Rivian CEO R. J. Scaring. “We are working basically as expected; limiting battery power is actually an artifact of simply creating a highly automated line, and as I said, this does not present any long-term problem for us. “

Rivian shares fell 15% early Friday morning and then recovered to $ 97.70 per share by the end of the week, down 10.3% on the day. The intraday low of $ 92.62 a share and the closing price were new corresponding lows since Rivian began trading on Nov. 10. Rivian shares fell 3.4% after the IPO.

The steep downturn has come despite warnings from Wall Street analysts that there will undoubtedly be some manufacturing shocks on the road to an electric vehicle launch. Overall, analysts are downplaying the cut in production, echoing the company’s view that it will have little or no impact on Rivian’s long-term valuation.

“I personally don’t think it’s that important,” Wells Fargo analyst Colin Langan said Friday during CNBC’s “Squawk on the Street” show. “It’s a disappointing start, but it’s pretty small.”

On the other hand, Rivian said total bookings for the R1T electric pickup and R1S SUV increased to 71,000 as of December 15, up 28% from the last 55,400 in November. This is a higher figure than the company expected.

The updates come alongside Rivian’s first quarterly report as a public company and confirmation of plans to build a new $ 5 billion plant in Georgia, expected to be built in 2024.

Rivian’s third-quarter results were in line with Wall Street’s expectations and estimates previously released by the company as part of its IPO.

In the third quarter, Rivian reported an operating loss of $ 776 million and a net loss of $ 1.23 billion. The company had previously forecast an operating loss of $ 745 million to $ 795 million and a net loss of $ 1.21 billion to $ 1.28 billion.

– CNBC Michael Bloom contributed to this report.

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