Rivian Automotive Inc. (NASDAQ: RIVN) management said it took one step forward. It also took one step back. This is why its stock is much closer to its 52-week low than its 52-week high.
First, the bad news. Rivian ended its exclusive deal for Amazon to use its electric trucks. This was partly positive, maybe. Rivian can sell trucks to other companies. It also lost what should have been 100,000 sales to America’s largest e-commerce company. TechCrunch wrote, “Rivian said during its investor call that it still plans to come through on Amazon’s goal.” That does not seem promising. Amazon can go elsewhere as well. It is a two-edged sword that mostly cuts Rivian deeply. (These are the most fuel-efficient new pickups on the market.)
On the very positive side, at first glance, were Rivian’s earnings. Rivian has a special skill of burying its profit and loss and other financials well toward the bottom of its investor letter. Once found, it paints a grim picture. Rivian had a $1.3 billion net loss in the quarter. Its loss over the past five quarters is $7.6 billion. Its free cash flow is nearly as bad. Rivian also had $9.3 billion in cash and short-term investments. At the current burn rate, it has about two years of money. Could its burn rate improve? That’s hard to say. It will be up against competitive products from several huge manufacturers, which continue introducing new products.
On another upbeat note, the company will produce 54,000 vehicles, versus an earlier forecast of 52,000. That is a 4% improvement, which is not much.
Rivian’s problem, in a nutshell, is competition. Among these is the Tesla Cybertruck. It could be a sales bust, but that is unlikely. The Tesla brand is among the most powerful in the country. Ford’s F-150 Lighting, based on the Ford distribution system and sales of the gasoline-powered version of the same truck, gives it a built-in advantage. Ford has not taken advantage of that so far, but its muscle is there nevertheless. Ram is about to come to market with what it calls an electric vehicle, although it also has a small gasoline-powered generator. The Ram’s configuration is a “tell,” as is the new Ford F-150 hybrid. If people want purely electric trucks, they have not indicated so yet.
The bad news outweighs the good for Rivian Automotive, which continues to be an also-ran.
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