Electric vehicle manufacturer Rivian (RIVN) is to release fourth-quarter and full-year 2021 results late on Thursday amid manufacturing issues and a price-hike fiasco that has irritated customers. Rivian shares rose on Tuesday.
Last week, Rivian raised the price of its cars by up to 20%. Chief Executive Officer R.J. Scaringe blamed the rising cost of components. Meanwhile, production ramp-up has been intermittent, with the Rivian’s Normal, Illinois plant closed for a week in early January.
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Rivian Income
Evaluate: Analysts at Zacks Investment Research expect Rivian to cut QoQ losses to $1.58 per share on sales of $50.38 million.
Rivian reported little revenue in the third quarter but a big loss. Sales were about $1 million and losses were $12.21 per share. These results were in line with the company’s expectations in the previous SEC filing.
It’s not unusual for a startup to start out with little revenue and big losses as it spends heavily on ramping up and tweaking production. Rivian says it does not expect profitability in the foreseeable future.
results: Come back Thursday after closing.
Rivian stock
Shares rose 3.2% to 43.82 in the stock market today after falling 10.5% on Monday. Rivian shares are trading well below the IPO price.
According to MarketSmith, the stock relative strength line is at an all-time low. The Rivian RS is rated 5 out of 99 possible.
Electric vehicle stocks have suffered in recent weeks as the market shifted away from growth stocks. Russia’s war in Ukraine has generally added additional pressure.
Rivian’s U.S. Competitors Luxury Electric Vehicle Startup clear (LCID) is up 1%, losing more than half its value since mid-January.
Tesla (TSLA), which received approval to open its plant in Berlin last Friday, added 0.3%.
Among older automakers with a growing list of electric vehicles General Motors (GM) up 0.8%% and Ford (F) decreased by 0.7%. stellantis (STLA), which signed a contract on January 5 to build electric delivery vans for top customer Rivian. Amazon (AMZN), rose 3.2%.
Rivian Price Increase
Rivian revealed last week that its R1T electric pickup will cost about 17% more than previously expected. This will increase the base cost to around $78,975 from $67,500. The price of the R1S SUV will rise by about 20%, bringing the new base price to around $84,000 from $70,000. All prices are excluding the $7,500 federal tax credit.
The previous price tiers will apply to the twin-engine versions of the R1T and R1S, which are expected to be available from 2024.
Initially, the new prices applied to both new and existing bookings, angering customers with bookings who threatened to cancel their pre-bookings.
As a result, on March 3, Rivian reversed its decision to apply the price increase to existing orders. In a note to Rivian pre-order holders, Scaringe said that the company “incorrectly assumed that the announced Dual-Motor and Standard battery pack would provide configurations that would provide price points similar to your original configuration.”
“Though it was logic, it was wrong and we have undermined your trust in Rivian,” he added. Scaringe apologized and offered to not only fulfill the pre-orders at the original price, but also help those who canceled the pre-order to restore their pre-order with the original configuration, price and delivery time.
RIVN shares fell 25% in two days after the price increase was announced.
Rivian Stock: ramp-up problems
Scaringe said at the Wolfe Research conference on Feb. 24 that ramping up production at the Rivian Normal plant is “absolutely going forward” but supply chain issues are still slowing down production.
Scaringe said the global shortage of semiconductor chips is the “most painful” barrier to ramping up production.
On December 16, the company said it expects “a few hundred vehicles short of our 2021 production target of 1,200 vehicles.” On January 10, Rivian reported that it had sold 1,015 vehicles and delivered 920 vehicles by the end of 2021.
Rivian said it had about 71,000 pre-orders for the R1T pickup truck and R1S SUV in North America as of December 15. Pre-orders require a $1,000 refundable deposit.
Follow Adelia Cellini Lineker on Twitter @IBD_Adelia.
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