Rivian R1T Production Is Threatened by Supply Chain Issues

Just because the 2022 Rivian R1T is the first electric truck to hit the streets doesn’t mean everything is going well. The Rivian R1T may face a significant slowdown due to supply chain issues as it tries to stay ahead of rivals. 

The 2022 Rivian R1T faces production delays 

White 2022 Rivian R1T, the top choice for a discussion of "What car would Jesus drive (WWJD)?"
2022 Rivian R1T | Rivian

The 2022 Rivian R1T may face trouble as production falls short in 2021. Rivian has produced about 652 vehicles since production kicked off in September, but that’s not enough. The company could be short by a few hundred trucks and SUVs. As a result, Rivian may miss its goal of building 1,200 vehicles by the end of 2021

Rivian founder and CEO RJ Scaringe shares that its dedicated teams are working as hard to provide as many customers as possible with their vehicles by the end of the year. However, ramping up production of the Rivian R1S and R1T has been more challenging than expected. 

Scaringe continued to explain that supply chain restraints continue to be a challenge. Rivian suppliers have been scaling up their production in an attempt to match Rivian’s ramp-up rate. The procurement team remains nimble as they continue working with supplier partners across all tiers to mitigate issues stemming from the supply chain, labor market, and Covid pandemic. 

How is Rivian fighting these issues? 

Scaringe shared that the supply chain issues for the 2022 Rivian R1T and other vehicles are short-term and solvable. With the supply chain’s uncertainty, they’ve decided to carry higher inventory levels than previously assumed. This helps to ensure that Rivian consistently has parts to build. 

Rivian is also spending tons of money to ramp up production but faces littles revenue from vehicle sales as production slows. Rivian experienced an operating loss of $776 million for the quarter and a net loss of $1.2 billion. 

But the Rivian R1T and R1S did provide a total revenue of $1 million during the third quarter because the first 111 models were delivered to customers. If Rivian isn’t profitable soon, it doesn’t mean people should be worried. 

It’s not uncommon in the world of electric vehicles to have a slow start. Tesla didn’t turn a full-year profit until 18 years later. It finally did in 2020 when the company produced 500,000 vehicles. 

Are people buying the Rivian truck? 

Blue Rivian R1T driving on a forest road
2022 Rivian R1T | Rivian

Yes, the 2022 Rivian R1T and R1S are responsible for 71,000 preorders. Amazon also put in an order for 100,000 electric delivery vans. These orders provide both support and pressure for the production ramp. 

Customers may grow impatient as some Rivian R1T orders won’t be available until the end of 2023. Rivian is building a new manufacturing plant in Georgia, but construction isn’t beginning until next summer. Vehicles won’t roll off the line there until 2024. 

So Rivian plans to boost production at its Normal, Illinois plant by 50,000 vehicles. They have about 3,800 employees at the plant and plan to hire about 800-1,000 people by the end of the second quarter in 2022. 

This move is made possible in part thanks to the $13.7 billion in gross proceeds that Rivian acquired through its massive initial public offering in November. We’ll keep an eye on Rivian’s progress and update you as we learn more. 

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