Rivian Ruined

By Douglas A. McIntyre Published Nov 10, 7:30AM EST

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Rivian Ruined — © Shattered (CC BY-SA 2.0) by Bill Burris

Electric vehicle maker Rivian Automotive Inc. (NASDAQ: RIVN | RIVN Price Prediction) has been close to death for some time. A massive loss last quarter and revenue that missed forecasts cannot offset what appears to be a good backlog of orders. Everything else aside, Rivian is too small to matter in an extremely crowded market.

In an overly long and complex letter to shareholders, Rivian results for the most recent quarter were buried near the end. Revenue reached $536 million. The company lost a staggering $1.5 billion. Rivian produced 7,363 vehicles in the period, which is so few as to be meaningless.

The New York Times noted this about Rivian’s third-quarter results: “The company’s big challenge now is increasing production enough to meet demand for its vehicles, cover the cost of making those vehicles and, eventually, turning a profit.” Rivian says it has enough cash to take it into 2025. It still needs to build enough vehicles to drive revenue up quickly. It also needs demand, which may or may not materialize over the next two years.

The company said that one of its strengths was it has reservations of 114,000 vehicles. Those reservations could disappear as fast as they appeared.
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It would have been hard for Rivian’s stock to be hammered more than it was after the results were released. The share price dropped 12% to $28. That puts it down 70% for the past year.
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Rivian’s problem is not its balance sheet. The competition will become more and more intense as time passes. Tesla will introduce its truck next year. It already has a sport utility vehicle. Ford’s F-150 Lightning model has the advantage that there are millions of F-150s in the market. If even a small percentage of the owners go electric, it could have the world’s biggest market share of any vehicle in this category.
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No large car manufacturer in the world is without plans for electric SUVs and pickups. This is particularly important to GM’s Chevy Silverado and the Ram brand. And these large companies have tremendous R&D, product management, marketing and distribution systems already in place.

Rivian’s final downfall is that it is too small.

About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.