The American electric-vehicle maker Rivian reported Q4 and Full Year 2021 Earnings missing Wall Street’s expectations. The company lowered its production guidance for 2022 and expects now to deliver 25,000 vehicles (down from 40,000). After being down 6.35% during the trading session, the stock dropped nearly 13% After-Hours to $35.93 per share — a new All Time Low for the stock.
- Adjusted loss per share: $2.43 vs. $1.97 a share expected
- Revenue: $54 million vs. $60 million expected
“In the immediate term, we are not immune to the supply chain issues that have challenged the entire industry. Those issues, which we believe will continue through at least 2022, have added a layer of complexity to our production ramp-up” — Rivian stated. Read the full statement here.
As of March 8th, Rivian has 83,000 R1 net preorders in the U.S. and Canada and 100,000 EDV units reserved from Amazon and counts 11,500+ employees.
“Over the course of fiscal year 2022, we plan to remain focused on ramping up production of both the R1 and RCV lines in Normal, as well as investing in our technology and product portfolio for future growth. We believe that throughout 2022, the supply chain will be a fundamental limiting factor in our total output for the Normal Factory and that our manufacturing equipment and processes would have the ability to produce enough vehicles to deliver over 50,000 vehicles across our R1 and RCV platforms in 2022 if we were not constrained by our supply chain. Our confidence comes from the demonstrated performance of our processes and equipment which is in line with our expectations. Despite this, due to the supply chain constraints currently visible to us, we believe we will have sufficient parts and materials to produce 25,000 vehicles across our R1 and RCV platforms in 2022. We continue to work with suppliers and look for engineered solutions to help us combat any anticipated supply chain issues.” — the company said.
The company has been facing a number of challenges, from production ramp-up to orders cancelled after increasing its prices by 17% and 20%. Last week, Rivian announced that has raised the price of its R1T pickup by 17% and R1S SUV by about 20%. Increases in the cost of raw materials, inflationary pressure and the already known chip shortage issue are the reasons for this price increase.
“The Rivian R1T’s price is increasing 17% which will increase the base cost from $67,500 to approx $78,975. The R1S will see a whopping 20% price increase, bringing the new base price from $70k to about $84k. Like most manufacturers, Rivian is being confronted with inflationary pressure, increasing component costs, and unprecedented supply chain shortages and delays for parts (including semiconductor chips).”
On March 3rd, the company sent an e-mail to all reservation holders reversing the decision saying that the “original configured price will be honored” .
Recently, Barclays analyst Brian Johnson lowered today Rivian’s price target to $47 from $115 maintaining an Equal Weight rating on the shares heading into Earnings Report. On the note released, the analyst says that believes the planned price increase was baked into investor expectations and the rollback of price increase leads him to cut selling price and margin assumptions through 2023. The electric truck maker’s shares shares hit earlier today a new All-Time-Low at $39.86.
Two weeks ago, Wells Fargo analyst Colin Langan lowered Rivian’s price target from $110 to $70 while maintaining an Equal Weight rating ahead of the March 10 Earnings report. Langan is bullish on the products and brand strategy, although he sees near-term headwinds including risk to Q1 delivery expectations, the negative impact from rising interest rates, increased BEV competition, and potential selling post the lock-up expiration in mid-May.
“We are bullish on the products and brand strategy; however, we see near-term headwinds.” —wrote the analyst. Rivian shares closed 8.36% lower on Tuesday session and are currently down 35% Year-to-date.