EV Startup Rivian Missed 2022 Production Target

In an email to employees, Chief Executive

RJ Scaringe

said more than 700 vehicles were awaiting parts or other work to be completed at year-end. In his email, Mr. Scaringe blamed a global supply-chain crisis for the company’s missed production target. 

Supply-chain issues forced Rivian’s sole factory in Normal, Ill., to close for 20 days this past year, and shut down early for an additional 50 days, he wrote. 

Investors had been closely watching the young company’s 25,000-vehicle goal. Rivian began production of its first model, the R1T pickup truck in late 2021, amid a period of global shortages and supply-chain disruptions. It also is building a sport-utility vehicle, the R1S, as well as an electric delivery van for

Amazon.com Inc.,

which is also a major investor. 

The company sought to prove to investors that it could mass produce its vehicles and deliver them to more than 100,000 preorder customers. Early in 2022, it cut its production forecast for the year to 25,000, from 50,000.

Rivian isn’t the only EV company struggling with factory challenges.

Tesla Inc.

missed its delivery target for 2022, in part due to Covid-related factory shutdowns in China and a change in how it produces and delivers vehicles to customers. Another young EV-startup, Lucid Group Inc., lowered its production target this year, citing supply-chain and logistical issues. 

The Irvine, Calif.-based Rivian reported a net loss of $5 billion during the first nine months last year, as it worked to spool up output at the Normal factory and was hit by rising raw-material costs. Company executives have blamed some of its losses on inefficiencies connected to running a car factory at less than full capacity. The plant has the capacity to eventually produce around 150,000 vehicles a year, the company has said.

Rivian has seen its cash pile dwindle since it went public in late 2021, as it spent heavily on increasing its production while dealing with rising raw-material costs. At the end of September, it had $13.8 billion in cash and cash equivalents, compared with $15.46 billion it reported at the end of June.

Rivian shares surged following its November 2021 initial public offering, but declined throughout last year amid its production challenges and a worsening economic outlook. Shares have fallen more than 80% from the high, closing Tuesday at $17.34, for a valuation of about $15.3 billion.

Write to Sean McLain at [email protected]