Rivian Hits the Wall: Can it Become a Volume Producer?
We can’t tell you what is going on behind the scenes at Rivian, the electric truck startup that was on a roll. But now that it must produce what it has been developing for years, there is trouble. Numerous executives have left the manufacturer, and it is having a rough time getting Rivian R1T pickups out the door. Here’s what we know.
Rivian beat the odds and beat all other automakers with an EV pickup
The reception in the fall that its pickup received once trucks started dripping out of the factory, couldn’t have been better. It beat all of the other automakers to the punch becoming the first all-electric pickup truck ever. And it beat the odds against what has become a risky bet for EV startups in general.
Rivian even won the Motor Trend Truck of the Year award, just to continue on its roll. But now production targets are way off. It is having difficulty getting up to speed on manufacturing. Apparent to the company last year, it announced in December it would begin constructing a second plant in the Atlanta, Georgia, area.
The new plant will have the ability to crank out 400,000 trucks a year. Optimistic? Maybe, but its backlog of reservations, and the reception to the Tesla Cybertruck, Ford F-150 Lightning, and Chevy Silverado EV, make it look more practical than it being a goal. The company says that as of December, it had 71,000 orders for the R1T and R1S SUV. And it has an order for 100,000 of its EDV vans from Amazon.
What are the problems at Rivian?
“The plant, which will eventually employ more than 7,500 workers, represents a key next step as Rivian scales aggressively toward higher-capacity production for our future generation of products,” the company told Automotive News. But until it is plugged in and running, Rivian is having some problems.
In December, it announced that the models with extended-range capabilities would be delayed until some time next year. Rivian’s explanation was that it needed the capacity to make more trucks with the standard range. It said that most orders were for this feature. “The next several months will remain a steep climb as we continue to ramp up our operations,” said CEO RJ Scaringe.
Then earlier this month, it was revealed that Amazon, which has invested millions into Rivian, ordered Ram ProMaster all-electric vans from Stellantis. But Amazon has that standing order for 100,000 vans. With that announcement, the value of Rivian stock fell sharply. From a high of $172 a share, it has dropped to $70 as of today.
Rivian’s COO has left
Also, last week it was reported by the Wall Street Journal that COO Rod Copes had left. The company says that Copes’ departure was planned, but the optics don’t look good.
All of this is setting off alarms as we slog into 2022. Its goal of producing 1,200 trucks last year was not met. Rivian instead produced 1,050 trucks. Not terrible, but another red flag, especially to investors. But trucks are getting out to customers.
With everything being so new, there will be bumps in the road. From the trucks to the assembly line workers and the factory itself, it is all unchartered territory. Investors will be watching the production numbers closely, and we’ll have a better picture of how Rivian is doing by the end of the year.