Rivian Recovers

By Douglas A. McIntyre Published Mar 4, 10:10AM EST

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Rivian Recovers — © 2022 Rivian R1T (in Glacier White), front 6.21.22 (CC BY-SA 4.0) by Kevauto

Rivian, the electric car company, got two pieces of good news this week. First, it bested Tesla in the widely followed J.D. Power 2023 U.S Electric Vehicle Experience Ownership Study. If Rivian had cars to buy, this would be extraordinarily good news. Its lack of inventory means the award matters only modestly.

The other good news is that, according to Bloomberg, Rivian’s CEO Robert “RJ” Scaringe said the company might produce 62,000 vehicles this year. That is up from publicly stated forecasts of 50,000. Since the concern about Rivian’s production capacity has been enduring, this may break the bad news cycle of low production, which triggered stock sell-offs.
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Another wave of bad news started a month ago when Rivian said it would fire about 1,000 people. That raised the question about its cash position. It begs the question of why it has to cut costs. In the most recent quarter, Rivian posted a $1.7 billion loss on revenue of $536 million. For 2022, it lost $6.7 billion on revenue of $1.7 billion last year. Perhaps its $11.6 billion in cash is not enough to survive to the point where it is profitable.

The news about 62,000 vehicles is particularly good because of production problems last year. In the final quarter, it produced 24,337, which was below expectations.

Rivian still has two distinct disadvantages. The first is that it is a tiny producer. Last year it tried to dodge that by saying it has about 100,000 backorders. That is misleading, given that these could be canceled at any time.
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Rivian is in an industry racked by production competition and price cuts. No global company has a chance to catch Tesla soon. It will sell as many as 2 million cars this year and has already cut prices to do so. Ford has answered with a price cut of its own, which will ripple across the EV market. Rivian may also need to come to market with vehicles that carry lower prices.

The new production announcement is impressive, but not enough to save the company. (Click here for the 13 biggest electric vehicle business failures in American history.)

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.