Rivian, which has had a rocky ride in the stock market after a blockbuster initial public offering, cast a further shadow over its outlook on Thursday, reporting that supply chain problems could severely constrain its production of electric vehicles.
The company said it would be able to produce only 25,000 vehicles this year, half the number it said it could make if the supply chain were not a “fundamental limiting factor.”
Problems securing parts and materials are affecting all automakers, but they are hitting Rivian when it has sold very few vehicles and faces competition from larger companies.
“Like the rest of the industry, we anticipate supply chain challenges to persist through 2022,” Rivian said in a letter to shareholders that detailed its financial results for last year. We called with Wall Street analysts on Thursday, RJ Scaringe, Rivian’s chief executive, said the problems centered on a “small number of parts.”
Rivian makes a high-end truck — designed more as an off-road vehicle than as a cargo hauler — and a sport utility vehicle. Rivian also has an agreement to make electric delivery vans for a big shareholder, Amazon, which has ordered 100,000. When Rivian went public, investors saw it as a possible competitor to Tesla, the largest electric vehicle maker.
A Critical Year for Electric Vehicles
The popularity of battery-powered cars is soaring worldwide, even as the overall auto market stagnates.
Rivian said that as of Tuesday, it had produced 1,410 vehicles this year, a small fraction of the 83,000 orders submitted. The company did not say how many vans it had delivered to Amazon this year.
Stock analysts said Rivian’s report was disappointing, and its stock plunged 12 percent in after-hours trading after the company released its results.
“It’s been a very frustrating name,” said Dan Ives, analyst and managing director at Wedbush Securities, “and these results show that Rivian still has a lot more wood to chop.” He said he had originally expected Rivian to make 40,000 vehicles this year, well above the company’s latest forecast, adding that analysts had expected orders for Rivian vehicles to be higher than the 83,000 reported.
Along with other EV makers, Rivian must contend with rising prices for lithium and nickel, which are used in making batteries. Russia is a big exporter of nickel, and fears that the metal’s supply could be constrained have driven up its price.
“We hope the inflation that we’ve seen with nickel pricing very recently is short-lived,” Mr. Scaringe said.
Rivian went public in November, raising $13.5 billion — cash it will need to expand its factory in Normal, Ill., and build one in Georgia. The stock soared at first, giving Rivian a market value exceeding that of General Motors, but it is now trading at roughly half its IPO price.
The shares declined in recent months after Rivian said it was facing production challenges, then tumbled further in a customer relations debacle over pricing. Rivian said last week that it would increase the prices of its vehicles, even those already ordered. Facing a backlash, Rivian backtracked and applied the increases only to new orders, and Mr. Scaringe apologized in a letter to customers.
Before the price change, Rivian’s truck and car could cost as much as $83,000. After the introduction of new offerings, the price could reach $95,000.
Rivian had revenue of $55 million last year and a net loss of $4.7 billion. It used up $4.4 billion of cash running its business and investing in new facilities and equipment, and had $18 billion of cash on its balance sheet at the end of last year. The company said it expected a loss this year of $4.75 billion under a measurement of profits known as adjusted earnings before interest, taxes, depreciation and amortization.
Mr. Ives said investors might also balk at the high level of costs, especially if they were expecting higher order numbers. “The cost overruns are a lot more than the Street expected,” he said. “If preorders were on pace, the Street would be fine with it.”
The executive overseeing Rivian’s operations left last year as the company was trying to ramp up production. On Thursday, Mr. Scaringe said the company would announce a new chief operating officer next week.