Rivian warns that supply issues to hit production
Rivian warns that supply issues to hit production

The electric vehicle maker’s shares drop to record low

Rivian Automotive Inc’s stock fell nearly 15% on Friday to hit a new low after the electric vehicle (EV) maker’s first result as a listed company highlighted the challenges it would face in ramping up production to compete with EV leader Tesla Inc.

The EV maker’s stock fell as low as $92.62 in early trade, breaking through the $100 barrier for the first time, and was still down roughly 11% in the afternoon.

They had gained roughly 40% since the company’s big market debut in November before Friday’s dip, reports Reuters.

Rivian announced its plans on Thursday to build a $5 billion plant in Georgia to boost capacity while flagging production obstacles even as it receives about 2,000 pre-orders each week.

“We don’t want to read too much into near-term issues … but it does highlight the risk that Rivian has a lot on its plate,” RBC Capital Markets Analyst Joseph Spak told Reuters.

The California-based company expects production to fall by “a few hundred vehicles short” of its 2021 target of 1,200 due to supply chain constraints.

Increasing production of the R1T truck, R1S SUV and Amazon’s delivery vans within a few months would be akin to “a really complex orchestra,” Chief Executive Officer RJ Scaringe told Reuters.

Rivian currently has 71,000 pre-orders for its R1 vehicles, up from 55,400 in October.

However, some on Wall Street said that the total is on the low end of expectations.

Rivian also has struggled to get the vehicles into customers’ hands.

“The strong order book provides support for the production ramp, though it does add pressure to get vehicles to customers that may get impatient as current R1 orders won’t be ready until the end of 2023,” Wells Fargo Analyst Colin Langan told Reuters.

The construction of Rivian’s new Georgia plant will begin next summer and vehicle production is expected to start in 2024.

The company plans to raise production by 50,000 vehicles at its plant in Normal, Illinois, which began building the R1T pickup in September.

It also added the R1S SUV last week with the delivery van to follow this month.

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