Emerging electric truck manufacturer Rivian continues to see strong demand for its inaugural products, with nearly 200,000 orders in hand and a long way to go to fill them.
Rivian announced during a second-quarter earnings call Thursday that it had more than 98,000 orders for its R1T pickup truck and R1S SUV as of June 30. Amazon, an early investor in Rivian, has ordered 100,000 commercial electric delivery vans.
The California-based company, which launched production in the southern Normal state in September and has struggled with a slower-than-expected ramp-up, has built about 8,000 electric vehicles and reaffirmed a reduced production target of 25,000 vehicles this year. year.
Rivian generated $364 million in revenue and reported a net loss of $1.7 billion in the quarter. The company reported Thursday that it had $15 billion in cash at the end of the second quarter.
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In addition to concerns about rising production, Rivian is looking at the implications of President Joe Biden’s landmark climate bill, which passed the Senate on Sunday and is due for a vote in the House on Friday. He includes an extension of the federal tax credit of $7,500 for electric vehicle purchases, but sets a cap that would make trucks and SUVs priced over $80,000 ineligible. That would remove most Rivian sales from the mix for the tax credit starting next year.
The $430 billion Reducing Inflation Act focuses on healthcare and clean energy, with a series of measures to promote EV adoption. The bill extends the $7,500 tax credit through 2032, adds a $4,000 tax credit for used electric vehicles, and raises the 200,000-vehicle sales limit for manufacturers.
It also imposes new restrictions, excluding higher-income buyers and electric vehicles priced above $55,000 for sedans and $80,000 for SUVs and trucks, which could affect Rivian and other manufacturers. The bill also includes new sourcing requirements for household batteries.
“We are incredibly happy to see a policy that helps drive faster adoption of electric vehicles, as well as significant investment in building domestic battery cell production,” Rivian CEO and founder RJ Scaringe said Thursday. “While many of our R1 configurations will not meet the invoice price requirements, our R2 (next generation) product line and associated cell roadmaps are being developed to enable our customers to capture the value of these incentives. ”
Starting price for the R1T pickup is $67,500, while the R1S SUV is priced at $72,500. But after add-ons and options, most Rivian customers spend more than $80,000 on their electric vehicles, the company said.
On Wednesday, Rivian sent current customers who have reserved an EV a possible fix to qualify for the full $7,500 tax credit before the bill becomes law on January 1. Rivian said buyers can sign a “binding written contract” for their R1T or R1S purchase, making $100 of their existing $1,000 deposit nonrefundable, but excluding them from price and income restrictions, regardless of delivery date. .
Rivian cautioned that the final terms of the bill were uncertain and there was no guarantee the IRS would approve the tax credit, but offered the option “as a way to do what we can to increase the likelihood of receiving the $7,500.”
During the conference call, Scaringe reiterated that ramping up production at Normal remains a “key focus” for Rivian, but the company has also raised the importance of cutting costs.
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Last month, Scaringe was in Chicago to introduce the first of 100,000 electric delivery vans to be put into service by Amazon. A week later, Rivian announced that he had laid off 6% of its total workforce, or about 840 non-manufacturing employees, including about 50 at its Normal assembly plant. Scaringe cited rising inflation and tightening capital markets for the cost-cutting move.
Rivian had about 6,000 employees at Normal and about 14,000 company-wide before implementing the restructuring plan.
The Normal plant has an annual production capacity of 150,000 vehicles and was projected to build 50,000 by 2022 before global supply chain issues, including ongoing semiconductor shortages, halved the first-year target. . Rivian produced 4,401 vehicles during the second quarter, compared to 2,553 built in the first quarter.
Amazon electric delivery vans it accounted for about a third of the nearly 8,000 EVs produced during the second quarter, the company previously said. First EDVs released in a dozen cities last month, but Scaringe declined to give a total production target Thursday for the year.
“We’re very excited to start seeing a lot more of these on the way,” Scaringe said. “We’re very, very motivated to deliver as many as possible, and certainly Amazon is pushing for that as well.”
While Rivian is reducing its non-manufacturing workforce, it still plans to hire an additional 1,500 workers and add a second shift at the Normal plant by the end of the third quarter.
The company is also building a second $5 billion assembly plant in Georgia, which is slated to produce Rivian’s next-gen EV on the smaller R2 platform starting in 2025.
When Rivian went public in November, investors looking for the next Tesla quickly pushed its valuation above $100 billion. But the shares, which peaked at $179.47 in mid-November, have fallen sharply this year amid the slow acceleration. It closed at $38.84 a share on Thursday, giving Rivian a market capitalization of about $34 billion.