Electric vehicle maker Rivian generated $663 million in revenue in the fourth quarter and $1.66 billion for the full year, a result that was buoyed by an uptick in production and deliveries towards the end of the year but still wasn’t enough to meet Wall Street’s expectations.
Yahoo analysts surveyed expected Rivian to generate $742.4 million in the fourth quarter and 1.73 billion for the full year.
Shares dropped 8% on the news as shareholders focused on missed expectations, a recall and an increased, but still lower-than-expected production forecast for 2023.
The company reported a net loss of $1.72 billion in the fourth quarter and $6.8 billion for the full year. On an adjusted basis, it reported a loss of $1.5 billion and $5.2 billion for Q4 and full year, respectively.
The company attributed its net loss to high costs, noting that many of its material cost supply contracts were established in 2018 and 2019 prior to start of production, when it had “limited negotiating leverage.” Rivian also said it suffered losses on firm purchase commitments worth $920 million.
Rivian said it expects these costs to continue in 2023. However, it’s working to drive down the cost of goods sold per vehicle and it attempting to shore up its supply chain.
In terms of cash burn, Rivian’s operating expenses for the fourth quarter and the full year were $795 million and $3.7 billion, respectively, which means the company is still burning more money than it makes in revenue. Also of note, is that its full-year operating expenses in 2022 were nearly identical to 2021. Rivian was able to lower some operating expenses through a series of layoffs that began last summer.
Rivian was able to cut down capital expenditure costs, largely because it has gotten farther along in the buildout of its manufacturing capabilities at the plant in Normal, Illinois. In the fourth quarter, Rivian’s capex was $294 million, which is down from the $455 million in the same quarter last year. For the full year, capex was $1.4 billion compared to $1.8 billion in 2021.
For 2023 guidance, Rivian expects to spend $2 billion on capex as it ramps up production of its R1T truck, R1S SUV and two versions of its commercial van, which it is supplying to Amazon.
Capex will also likely increase as Rivian moves forward on its second factory in Georgia, where it plans to produce its next-generation R2 platform. The R2 platform is designed for smaller, more affordable EVs, the company has said. Rivian had originally planned to introduce the R2 in 2025, but at the end of Q3 pushed that back to 2026. The R2 is central to Rivian’s plan to expand its consumer business alongside its existing commercial business.
Rivian’s still cash flow negative at $6.4 billion. The company ended the year with $11.6 billion in cash and cash equivalents.
Production and Max Pack is back
Rivian has struggled with supply chain problems since production of its R1T truck began in late 2021. Those problems didn’t abate in 2022, forcing the company to scale back production guidance from 50,000 to 25,000 vehicles.
Even with that lower, more conservative guidance Rivian didn’t quite hit the mark. Rivian produced 24,337 vehicles and delivered 20,332 vehicles in 2022.
After a slow start, the company did ramp up production in the latter half of the year. It produced 10,020 EVs in Q4 and delivered 8,504 in the same period.
On Tuesday, the company pushed its expected production figure back up to 50,000 vehicles. That’s still far below the total capacity of its Normal, Illinois plant. Rivian says the Illinois factory will be capable of producing 150,000 EVs annually when it’s fully operational, with plans to increase to 200,000.
Notably, the company has finally given a date for its long-anticipated “Max Pack” battery, an upgrade to the existing battery configuration. Deliveries of a 400-mile R1S Max Pack variant are planned to begin in fall 2023.
The company pulled the “Max Pack” option off of its website late last year. The company said it will make the option available to existing pre-order customers.
Rivian also announced a recall in its full-year and Q4 earnings report for a sensor in the front passenger seat belt system in certain 2022 R1T and R1S vehicles. This comes about five months after Rivian issued a voluntary recall of all 13,000 vehicles it had delivered so far due to a loose fastener.
The company, which discovered the seatbelt sensor problem in February, said that while the number of potentially involved vehicles is 12,716, “we believe the estimated affected population is less than 1 percent — fewer than 100 vehicles — which will require part replacement.” Inspections are estimated to take less than 10 minutes. For the very small percentage where part replacement is necessary, the work can be completed in less than 30 minutes during the same visit.”
The issue first popped up in July 2022 when Rivian and a supplier reviewed the performance of a vehicle where the “passenger airbag off” light was activated with certain passengers in the front passenger seat, resulting in a service request, the automaker said.
The company said it began its investigation to determine whether the signal from the seat belt sensor that detects if the automatic locking retractor (also known as ALR) was performing as intended. As of February 27, 2023, Rivian is not aware of any accidents or injuries related to this issue in any market.
Rivian shares fall on missed revenue expectations, production forecast by Kirsten Korosec originally published on TechCrunch
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Photo and Author: Kirsten Korosec