Why Rivian’s Q2 $1.7B Loss Shouldn’t Worry Investors

Amazon-backed startup Rivian Automotive Inc. (NASDAQ: RIVN) recently announced that it had recorded a loss of $1.7 billion in Q2 2022 amid efforts to ramp up electric vehicle production and increase deliveries. The automaker’s losses for the second quarter of 2022 were more than double the $580 million it lost in the second quarter of 2021.

During a call with investors, Rivian CEO RJ Scaringe said that the Irvine, California-based company was unable to effectively use its production line for a lot of the second quarter. He said that due to component supply issues, Rivian has been unable to run even a single full shift. Supply shortages have rocked most industries in the past couple of months, with automakers being especially affected by a global semiconductor shortage.

Rivian expects the supply chain crunch to continue hindering its growth in the near term. Even so, the company is confident that it will be able to improve its fortunes once it adds a second shift to its vehicle manufacturing plant in Normal, Illinois. Since achieving profitability will be contingent on increasing the number of vehicles the company delivers, Scaringe is confident that Rivian’s production rate will continue to grow.

Furthermore, the $1.7 billion loss the company suffered this past quarter shouldn’t worry investors much because it is typical of an automaker in its initial growth phase. Rivian essentially had to build its production lines from the ground up, investing billions of dollars into building vehicle manufacturing factories and outfitting those factories with complex equipment.

The company has to hire skilled employees to run its factories, and engineers need plenty of time and money to develop all the vehicle components and assemble them into roadworthy EVs. Not to mention the variety of departments that will be needed to support all these manufacturing efforts, all of which don’t come cheap. These immense costs are part of the reason why there haven’t been any new entrants into the American auto market in nearly a century.

Since Chrysler broke into the market and established itself as a mass-market American carmaker in the 1920s, no other company has been able to do so until Tesla. And even though Tesla was founded in 2003 and launched its first EV five years later, 2021 was its first profitable year. With deep-pocketed backers behind Rivian, the EV maker just might be able to “pull a Tesla” and break into America’s automotive industry.

Rivian enjoys the backing of investors such as Amazon, which has an 18% stake in the company and which ordered 100,000 electric delivery cars from the company. Ford has also invested half a billion dollar in Rivian and shares its engineering talent with the startup. Rivian is currently building EVs in its Normal, Illinois, plant with plans to build a $5 billion facility in Georgia that will allow it to increase production to 400,000 cars per year.

About Green Car Stocks

Green Car Stocks (GCS) is a specialized communications platform with a focus on electric vehicles (EV), as well as other emerging market opportunities in the green sector. The company provides (1) access to a network of wire services via NetworkWire to reach all target markets, industries and demographics in the most effective manner possible, (2) article and editorial syndication to 5,000+ news outlets (3), enhanced press release services to ensure maximum impact, (4) social media distribution via the Investor Brand Network (IBN) to millions of social media followers, and (5) a full array of corporate communications solutions. As a multifaceted organization with an extensive team of contributing journalists and writers, GCS is uniquely positioned to best serve private and public companies that desire to reach a wide audience of investors, consumers, journalists and the general public. By cutting through the overload of information in today’s market, GCS brings its clients unparalleled visibility, recognition and brand awareness. GCS is where news, content and information converge.

To receive SMS text alerts from Green Car Stocks, text “Green” to 888-902-4192 (U.S. Mobile Phones Only)

For more information, please visit https://www.greencarstocks.com

Please see full terms of use and disclaimers on the Green Car Stocks website applicable to all content provided by GCS, wherever published or re-published: https://www.greencarstocks.com/Disclaimer

Green Car Stocks
Los Angeles, CA
415.949.5050 Office
[email protected]

Green Car Stocks is part of the InvestorBrandNetwork.


Select A Month

Contact us: (310) 299-1717