Rivian has been kicking butt for a while now. The R1T was the first electric truck made by the company. It won the MotorTrend Truck of the Year award in 2022, beating Ford and Tesla. It also agreed to work with Amazon to make a fleet of delivery vehicles that run on electricity. Lastly, after the R1T, it made the fantastic R1S electric SUV. Even though Rivian had a great IPO, the company still loses money on every car it sells. In a message to shareholders, Rivian said that for every car it sold in the second quarter of 2023, the company lost $32,595. You could buy a complete Honda Civic with that much money and still have some left over. What lets this happen? This situation involves a great deal of moving elements. Analysts have criticized Rivian’s engineering methods, which the WSJ says are driving up car production costs. Rivian ensured that the R1T did better in crash tests than other cars in its class. But to do that, more metal had to be added, increasing the price and weight. Current and former Rivian workers interviewed for the study said that putting together the skateboard chassis is “complicated” and that different parts of the chassis require manual and robotic welding in other places. Also, when the number of cars made goes up, the cost per car tends to go down, but Rivian still needs to arrive. Rivian’s goal is to produce 52,000 vehicles by the end of the year, but in the second quarter of 2023, it only made 13,992 cars. In 2022, Ford, on the other hand, produced 1.8 million cars and trucks in the United States alone. Rivian has much work to do to catch up, and we’re still determining if it wants to keep making such high-quality products. We got in touch with Rivian to find out how they planned to make up the difference in earnings and if the complexity of their tech was hurting their bottom line. A spokesperson for Rivian said that the company’s Q3 sales were better than analysts expected, that demand is high, and that the ramp is still going well. This was something that RJ Scaringe talked about on CNBC. Each quarter, the loss per car has gone down, and we are still on the way to making money. As you can see, they were polite and didn’t say too much. On the other hand, the claim stands up to the BS test. According to Rivian’s letter to its shareholders, the company’s gross profit margin per car has steadily risen from one quarter to the next. Rivian lost more than $32,500 per vehicle in Q2, but it lost $67,329 per vehicle in Q1 and $124,162 per vehicle in the previous quarter. The EV start-up has a chance as long as Rivian keeps making cars at the same rate and develops new models. During an interview with CNBC, Scaringe talked about this. Scaringe said about the future, “We’re going to see a very clear staircase, step, or set of steps that get us [Rivian] to being profitable as a business, which is, of course, the goal.” “Our production plant’s ramp-up is fundamental and essential to that,” says Rivian. If everything goes as planned, Rivian could dodge what happened to Lordstown Motors, another company that started making electric trucks.
