Rivian hasn’t gotten the smooth start it may have hoped for.
The California-based EV maker announced late last week that its losses tripled to $1.7 billion last quarter, reports The Wall Street Journal. Unfortunately for the company, things will likely get worse before they get better.
Despite rave reviews for its first two battery-powered vehicles—the R1T truck and R1S SUV—Rivian has struggled to get going since production started last year. The company said on Thursday that its revenue for the second quarter of the year came in around $364 million. Like so many other automakers, it has been hampered by parts-related supply issues and rising costs triggered by inflation during the first half of the year. Because of this, the company has reported an adjusted net loss of $1.62 per share, which is about what many analysts were expecting. Rivian had $15.46 billion in cash and cash equivalents on June 30, down from around $17 billion at the end of March.
“We’ve seen unprecedented levels of inflation, especially across our raw material inputs and lithium prices,” Claire McDonough, Rivian’s finance chief, was quoted as saying. “We’ve also experienced increased costs in regard to our expedited freight expenses.”
Rivian reaffirmed its promise to build 25,000 EVs by year’s end, according to the Journal. The company built 4,401 vehicles over the last three months, a number that it will have to double in each of the final two quarters of 2022 to hit its target. Whether or not it does reach its goal, losses are expected to grow to $5.45 billion. Previously, losses had been projected to come in at around $4.75 billion for the full year.
Its first year of production hasn’t been without setbacks, but Rivian remains hopeful for the future. The company said it expects losses to shrink once its factory in Normal, Ill., starts producing 150,000 vehicles a year. To hit this target, the manufacturer is currently staffing up and planning to run the plant on both day and night shifts going forward. The brand also plans to cut capital expenditures from an expected $2.6 billion to $2 billion to help hold onto cash.