American electric car manufacturer Rivian Automotive Inc. (NASDAQ: RIVN) has raised its EV production estimates for 2023 thanks to production-line improvements during the second quarter of the year. Rivian will manufacture 2,000 more electric SUVs, vans and trucks at its production plant in Illinois, bringing the plant’s total production estimates to 52,000 electric units.
The EV maker is one of Tesla’s largest competitors in the U.S. vehicle market and has even been called the “Tesla-killer” by analysts who believe its electric offerings have the potential to challenge Tesla’s supremacy in the United States. However, the Irvine, California-based company has faced supply chain difficulties that kept it from meeting its 2022 production targets.
Rivian had cut its production estimates for 2022 from 50,000 units to 25,000 units amid a “challenging supply chain environment” caused by shortages of critical components, expensive raw materials and labor issues. During the unveiling of Rivian’s 2022 third-quarter results, officials noted that the company would focus on increasing production despite the challenges hampering production.
The company now expects to exceed its original 2023 production estimates by 2,000 units. Furthermore, Rivian CEO RJ Scaringe said that the carmaker has enough liquidity to last through 2025 if it optimizes its costs. He says the company focused on cost efficiency and reduced costs along the supply chain. Shortly after Rivian published its new full-year production estimates, its shares went up by almost 3%.
Rivian may be overcoming the issues that forced it to halve its production estimates, but it will still have to compete with the myriad of established automakers that are also looking to make a mark on America’s nascent electric vehicle market. This includes General Motors and Ford, which are particularly interested in capturing the electric truck and SUV segment.
But while these established automakers still turn an annual profit from their nonelectric offerings, Rivian has not been profitable since its establishment in 2009. Rivian and other electric vehicle startups have also been forced to burn through their capital to accelerate production and remain competitive in the increasingly cut-throat electric vehicle market as Tesla slashed the prices of its most expensive EV models.
Rivian’s position is slightly better compared to other EV startups because consumer demand for its electric SUVs and pickup trucks is relatively high. In recent months, for instance, EV makers Protera and Lordstown Motors have filed for bankruptcy amid a strained funding environment and fierce competition.
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