Rivian’s 2022 EV Production Targets Will Mean a Sharp Increase

The body of a Rivian R1T truck is lowered onto a chassis on an assembly line at Rivian’s electric vehicle plant in Normal, Illinois. Georgia is providing the company with $1.5 billion in subsidies to build a new $5 billion electric vehicle plant in the southern state.

Brian Cassella | Tribune News Service | Getty Images

Electric vehicle startup Rivian Automotive told investors in March that it would produce 25,000 vehicles in 2022. He has three months and what seems like a big order to get there.

By the end of September, Rivian had built just 14,317 electric vehicles, meaning that it would have to build about 10,700 more vehicles by the end of December to fulfill its promise to investors.

Rivian is confident that he will be able to achieve his goal. The company has repeated this forecast several times since March, most recently on Monday, when it announced total production for the third quarter.

Wall Street isn’t too worried either. As several analysts pointed out this week, Rivian just had its best quarter for manufacturing, with 7,363 electric vehicles built from July to September. That’s more than the entire first half of 2022, thanks to a second shift of workers added during the quarter and management’s efforts to mitigate supply chain issues Rivian faced earlier this year.

The company’s shares have fallen 65% this year, below broader market losses.

Rivian has been ramping up production at its Illinois plant at a relatively steady pace since the beginning of this year. So while supply chain factors may still complicate its efforts, its third-quarter results appear to be in line with its full-year target, analysts say.

In a note Monday evening, Canaccord Genuity’s George Gianarikas noted that Rivian’s productivity has grown from an average of about 78 vehicles per week in the fourth quarter of 2021 to about 566 vehicles per week in the third quarter of 2022.

Between today and the end of the year, he will have to build up to an average of about 822 per week to reach his yearly goal.

“We believe this is achievable,” Gianarikas wrote. Gyanarikas has a Buy recommendation on Rivian shares with a target price of $61. Rivian is currently trading at around $35 per share.

Adam Jonas of Morgan Stanley wrote in a short note on Tuesday that while it is possible that Rivian’s production will be “slightly below” his forecast if it produces “somewhere around” 25,000 vehicles a year, that bodes well for his production plan. about 50,000 vehicles in 2023.

Jonas has an “overweight” rating on Rivian with a $60 price target.

According to RBC’s Joseph Spak, Rivian’s 2023 targets are of great concern. In a Monday night note, Spak wrote that 25,000 vehicles this year are “still feasible,” but Rivian’s plan to roll out new electric motors and upgraded batteries next year could lead to new production challenges.

Spak has a “superiority” rating on Rivian stock with a $62 target price.

However, there is no guarantee that Rivian will achieve or get close to its goal. The company already lowered its production forecast for 2022 once, in March, when it said current global supply chain issues would limit its annual production to 25,000 instead of the 50,000 that investors expected.

Back in August, CEO R.J. Scaringe said Rivian was still operating with supply chain restrictions and automakers continue to cite shortages of raw materials like lithium and cobalt that are needed to make batteries.

Rivian is expected to report its third-quarter financial results and provide additional information on the status of its production ramp-up in early November.

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