Again in October, Rivian quietly revealed that it produced simply two R1T electrical vehicles per day. The automaker has slowly ramped up manufacturing, however it’s nonetheless removed from reaching a sensible manufacturing quantity, and pre-orders are mounting quicker than they are often fulfilled. Unsurprisingly, the cracks are beginning to present.
The primary drawback is cash. As anticipated, Rivian has drained money since 2020, accumulating an additional $1 billion in losses. And whereas the corporate has over 70,000 R1T pre-orders on its plate, prospects solely pay a $1,000 refundable deposit to order their car. And that brings us the Rivian’s second, very massive drawback; it may well’t make automobiles quick sufficient.
Once more, Rivian solely made two automobiles a day when it kicked off R1T manufacturing in October of 2021. If the automaker wished to satisfy its authentic checklist of 55,000 pre-orders by October of 2022, it might must make 150 vehicles a day. That’s a small quantity for a Ford manufacturing unit pushing out gasoline guzzlers, however difficult for a startup constructing EVs throughout a provide scarcity and pandemic.
We made our first R1S deliveries final week from our manufacturing unit in Regular, IL to RJ and our CFO Claire. We’re working in the direction of ramping manufacturing over the following few months on our technique to full quantity manufacturing. Because of our workforce for all of the onerous work to make it occur! pic.twitter.com/Ql9Di2ySBE
— Rivian (@Rivian) December 20, 2021
Sure, Rivian is making automobiles a bit quicker now. But it surely’s gathered an additional 20,000 pre-orders, a lot of which received’t arrive till 2024 or later, based on the startup’s CEO. Moreover, all pre-orders for the “Max Pack” R1T configuration, even when they have been filed again in 2018, are delayed till 2023 (until you alter the automotive’s configuration to a smaller battery).
By the seems to be of it, Rivian expects to make lower than 150 vehicles a day (on common) over the following yr. The corporate says it is going to construct a second manufacturing plant to hurry issues up, however $1,000 deposits don’t construct an EV manufacturing unit. Meaning Rivian will borrow extra cash, and going deeper in debt means taking up extra pre-orders to appease lenders and buyers—yeah, regular exercise for a tech startup, however not nice for an organization combating provide chain points and powerful opponents like Tesla or Ford.
There’s one a part of this story we will’t gloss over; Rivian isn’t simply constructing automobiles for normal folks. The automaker has an unique deal to construct electrical supply vehicles for Amazon, and it’ll quickly take orders for different business autos. Rivian’s monetary scenario is extremely difficult, and its stack of unfulfilled pre-orders doesn’t essentially mirror on the corporate’s well being or hurdles.