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Rivian (RIVN) Q1 2022 outcomes – $1.5b loss, 10K new orders, reaffirms 25K manufacturing steerage


Rivian has posted its Q1 2022 results and shareholder letter after market close today, showing $95 million in revenue and a loss of $1.593 billion for the quarter ($1.77 per share), up from a loss of $414 million from the same quarter last year. It ended the quarter with nearly $17 billion in cash, largely from its massive IPO late last year.

Rivian also reaffirmed 2022 annual guidance, expecting a total loss of $4.7 billion for the year with 25,000 units of total production and $2.6 billion expected in capital expenditures. While RIVN dropped 9.6% during trading hours today, the market has responded positively after market close, with the stock recovering by 5.5% in after hours trading.

Rivian noted that this financial loss is largely due to producing at low volume on a high-volume line. Rivian’s factory has been built with a 150,000 run rate in mind, so building fewer units than that will result in higher spending per unit. Rivian expects this to continue in the short term, but to improve as production ramps up.

Our last production update from Rivian was on April 5, just after the end of the quarter, when Rivian announced it had produced 2,553 vehicles in Q1 of this year and delivered 1,227 of them. The company built 1,015 trucks in 2021, which means a total of 3,568 vehicles produced as of the end of Q1.

In today’s shareholder letter, Rivian updated that number stating that “~5,000” vehicles have been produced as of May 9, which puts production at about 300 units per week since the end of March. This means Rivian’s run-rate has approximately doubled since the beginning of the year, showing good progress.

Rivian notes that there have been significant challenges related to COVID-19 and supply chain issues constraining production. But despite these challenges, leadership reaffirms year-end guidance of 25,000 total units produced based on predictions of the future supply chain environment (despite dire predictions from CEO RJ Scaringe about battery shortages). This would require another approximate doubling of Rivian’s production rate averaged over the rest of the year for it to meet these goals.

Production has ramped up on Rivian’s EDV-700 delivery van as well, but Rivian did not share numbers on those. Amazon has already started delivering packages with Rivian vans in Denver and Los Angeles.

In March, Rivian announced a significant price hike on existing and future orders, partially responding to these supply chain issues, and received significant backlash from order holders, many of whom threatened to cancel. Rivian quickly backtracked and reinstituted the original pricing for order holders.

While it was feared that this would lead to a loss in orders, Rivian states in today’s Q1 letter that net preorders have increased since that pricing update, showing strong demand. Over 10,000 new R1 pre-orders have been made since the beginning of March at an average price of $93,000. This brings the total amount of pre-orders to 90,000.

Going forward, Rivian will change the way the order flow system works to better manage expectations from customers who pre-order vehicles. Rivian will allow new customers to browse options when placing an order, but will not be able to lock in a configuration until closer to build time. This will allow customers to choose from the most updated options and pricing when configuring their order and will help Rivian be more nimble in the face of an uncertain economic and supply environment.

Finally, Rivian took the opportunity to point out the finalization of its deal with Georgia, securing $1.5 billion in economic development incentives there to build an additional factory. With Rivian’s current cash burn rate and large $17 billion war chest, the company still thinks it has enough cash to fund the buildout of this factory and an expected future mid-price “R2” model, which will be built on its own platform at the Georgia plant.

Electrek’s Take

While there’s no incredible silver-bullet news in this earnings report, reaffirming full-year guidance is important given what has happened over the last few months. Rivian’s stock has been hammered by the price hike controversy, overall stock market downturn, supply chain difficulties, and Ford’s move to sell a chunk of their shares (along with other insiders, as the IPO-lockup period ended), leaving investors uncertain and desperate to hear some good news. A drop from an all-time high of $180 down to a share price of $20 today will leave anyone a little spooked.

So a “don’t worry, everything’s going to plan” is helpful in that environment. It has, at least for after hours trading today, stopped the bleeding, as investors seem relieved to hear that the sky perhaps is not falling as much as they feared it would be.

Rivian’s $17 billion (representing about $12 per share) in cash, and anticipated spending for the future plant, is also a significant comfort to investors in a startup during uncertain times. That’s a whole lot of money, and it was raised at just the right time and should help Rivian skate through the woes of a down stock market. At current burn rates, it puts Rivian at about 10 quarters worth of burn before the runway runs out, which is more time than other EV startups have at current burn rates.

Finally, the net increase in orders and strong demand was not surprising for us at Electrek, given that automakers and the public consistently underestimate EV demand. Right now, people want any EV they can get their hands on – and even EVs they can’t get their hands on. So one thing Rivian likely won’t need to worry about is selling every truck it can build for the next few years. We wouldn’t even be concerned about other electric competition arriving on the scene – if there’s plenty of room for multiple gas-powered adventure trucks, there’s definitely more than enough room for multiple EV adventure trucks, particularly given the many advantages of electric drive.

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