Rivian’s Losses Mount as It Continues to Burn Through Cash

Rivian’s third-quarter revenue was about $536 million, reflecting a continued ramp up of production at its factory in Normal, Ill., and higher deliveries to customers. The company’s adjusted net loss per share of $1.57 beat analysts’ expectations for a loss of $1.79 per share, according to Factset.  Rivian shares were up around 7% in after-market trading.

The battery-powered truck and sport-utility vehicle maker previously said it produced 7,363 vehicles during the quarter and delivered 6,584 vehicles to customers during the same period. That means Rivian must produce a little over 10,000 vehicles to hit its 25,000 production target for the full year.

Rivian reiterated that it was on track to hit that target, a reduced figure it set after running into production issues at its factory.

Still, the company continues to burn through cash as it both spends heavily to expand operations and gets hit by inflationary pressures that are pushing up materials and parts expenses.

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.

Mr. Scaringe, the CEO, said he believed Rivian was in a strong financial position and had enough cash to run its business through 2025, excluding any spending on a planned joint venture with

Mercedes-Benz Group AG

.

Rivian said in September it was considering working with Mercedes-Benz to establish a new European factory, which would build vans for both companies.

“We have a strong balance sheet with $14 billion in cash that offers us the flexibility to navigate these uncertain economic times and look for capital-efficient methods to drive growth,” Mr. Scaringe said.

The results come at a crucial time for the young car maker, as it seeks to prove that it can build vehicles at volume in a challenging financial environment.

Rivian is the most prominent of a handful of EV startups to go public in recent years with lofty valuations and ambitions to shake up the automotive pecking order. Since then, market sentiment toward these upstarts has cooled.

Rivian shares are down nearly 73% for the year, and the company recently laid off 6% of its workforce and curtailed spending in an attempt to conserve cash.

The truck and SUV manufacturer attributed its quarterly loss to in part to it building a low volume of vehicles on assembly lines that were designed for much higher output. It also booked higher operating expenses for the quarter, mostly due to stock-based compensation expenses, including one not recognized before its November initial public offering.

The company recently added a second, evening shift of workers to its factory, which will help it hit its year-end target, Mr. Scaringe said. He added that Rivian had to halt production for five days in the current quarter because a supplier part failed to arrive, but that the problem had been resolved.

Rivian’s chief financial officer, Claire McDonough, said the company has seen the amount of money it loses on each vehicle decrease markedly in the third quarter from prior quarters. She said that higher production volumes, increased vehicle pricing and planned reductions in material costs would help eliminate the losses.

Other EV startups also have faced production problems, forcing them to raise additional capital to keep operations going.

Lucid Group Inc. said Tuesday it planned to generate up to $1.5 billion through a pair of share sales. The maker of luxury EVs slashed its manufacturing targets twice this year after encountering issues at its factory in Arizona.

Earlier this year, Rivian recalled nearly all the vehicles it had built after discovering improperly installed fasteners on some of its trucks and SUVs. In extreme cases, the loose fasteners could cause a wheel to separate from the vehicle, the company said.

The maker of the R1T pickup truck and R1S SUV has raised the prices of its cheapest vehicles by several thousand dollars in the face of rising costs for raw materials. Other car makers have made similar price increases, citing higher costs on commodity parts and inputs for batteries.

Rivian still has expansion plans, including a $5 billion factory in Georgia that would allow it to produce up to 400,000 more vehicles a year, including a more affordable model, dubbed the R2.

Rivian said Wednesday it was working with Georgia authorities on the factory plans and expected the R2 to launch in 2026.

Write to Sean McLain at [email protected]