Losses widen, stock price plummets! How long can RIVIAN, which was listed with a high profile, last?

RIVIAN, which went public in a high profile, seems to be in bad shape recently. RIVIAN is an American electric vehicle research and development company headquartered in California, with an automobile assembly plant in Normal, Illinois.

RIVIAN is committed to developing electric trucks and SUVs. Its main products are the electric pickup R1T and the SUV R1S, with main functions of more than 240 miles of range and autonomous driving.

RIVIAN recently announced its fourth quarter and full-year financial report for 2021, and its performance was lower than expected. Data showed that the company's Q4 revenue was US$54 million, lower than the market's general expectation of US$64 million, and its adjusted net loss was US$1.242 billion,

compared with US$355 million in the same period last year. The adjusted operating loss in 2021 was US$2.8 billion, of which the fourth quarter lost US$1.1 billion, which was much larger than the loss in the same period last year. RIVIAN's net loss in 2021 was US$4.7 billion, including US$2.5 billion in the fourth quarter.

After the financial report was released, RIVIAN's stock continued to plummet. The company secretly submitted an IPO application to the U.S. Securities and Exchange Commission (SEC) in August 2021, aiming to raise $5 billion to $8 billion through the listing. In

November 2021, RIVIAN successfully landed on the Nasdaq, and its stock price soared to nearly $180, but then continued to suffer setbacks. As of Thursday's close, the stock has fallen 60% this year.

With operating losses widening and stock prices falling all the way, the development of electric vehicle company RIVIAN seems to be facing difficulties.

Why is this so? There are many reasons: First, there is a shortage of raw materials and a sharp increase in costs. RIVIAN previously mentioned in a conference call that there is a shortage of chips, electronic wiring harnesses, and electronic devices.

Due to the shortage of raw materials, RIVIAN failed to achieve its production target in 2021 after completing its IPO. Data shows that in 2021, RIVIAN produced 1,015 vehicles, which was lower than its production target and delivered 920 vehicles. In the

following 2022, RIVIAN's production will also be difficult to meet expectations. The company revealed in its financial report that due to supply chain constraints, the planned production capacity in 2022 is expected to be halved to 25,000 vehicles.

This is far lower than the existing order volume. The company revealed that as of March 8, its car reservations had reached about 83,000 vehicles, and in December last year, its reservations were still 71,000 vehicles. As of March 8, RIVIAN's production in 2022 was only 1,410 vehicles. It can be seen that RIVIAN's production is far from meeting market demand.

At the same time, due to the rising prices of raw materials, RIVIAN's profits will also decrease. For this reason, the company had intended to increase the price of cars before. However, after the price increase notice was issued, the company's stock price plummeted. It had to give up.

At present, many electric vehicle brands have encountered the same difficulties as RIVIAN. Previously, due to supply chain and other issues, Lucid also lowered its forecast for car production in 2022 by 40%, from the initial 20,000 vehicles to 12,000-14,000 vehicles.

The company said that in the short term, the entire industry faces challenges from supply chain problems, and these problems will continue at least throughout 2022, which limits the company's production capacity.

In a difficult period for the entire industry, it depends on who can hold on longer. At present, although RIVIAN seems to be in trouble, its performance has declined, and its stock price has plummeted, the company's funds are still sufficient.

RIVIAN obtained a lot of financing before its listing. From 2018 to its listing, RIVIAN raised more than $10 billion in financing. Before submitting its IPO in July 2021, RIVIAN also completed a $2.5 billion financing led by Amazon, Ford Motor, and T. Rowe Price Group. As of the end of last year, RIVIAN still had $18.4 billion in cash on hand. It seems that RIVIAN, facing difficulties, can still hold on for a while.