EV Maker Rivian Q4 2021 Earnings Preview
Rivian Automotive
Rivian is an American Electric Vehicle (EV) designer, developer and manufacturer, founded in 2009 and headquartered in Irvine, California. It has facilities in multiple locations, not only in the US, but also in other countries like Canada and UK.
Its manufacturing site is located in Illinois and it recently announced a second plant in Georgia, with construction expected to begin in summer 2022 and production to start in 2024. The new plant represents a $5-billion development and manufacturing investment, projected to eventually employ more than 7,500 workers and produce up to 400,000 vehicles per year. [1]
Rivian went public just a few months ago, as it began trading on the Nasdaq Global Select Market on November 10, 2021, in one of the hottest IPOs of the past year.
Vehicle Lineup
The firm focuses on off-road vehicles, with two models currently in its line-up - the R1T pickup truck and the R1S sport utility vehicle (SUV). The pickup delivers a range between 260 and 400+ miles, whereas the SUV tops out at 320+ miles of range. The first R1T was delivered in September 2021, while in December of the same year, the sale of the first two R1S vehicles took place. [2]
Its models are impressive and have generated excitement in the automotive community, with MotorTrend naming the R1T 2022 Truck of the Year, commenting that it is a remarkably original take on the pickup truck redefines the genre. [3]
Rivian also has certification for sale in the US of a commercial vehicle – the Electric Delivery Van (EDV). The EDV is designed and engineered in collaboration with Amazon, which is also its first commercial customer, with an order of 100,000 EDVs.
Q4 2021 Earnings
Rivian will announce its financial results for the fourth quarter of 2021, on Thursday March 10, after the US markets close.
It is a relatively new company that has only recently started selling vehicles, so in the last earnings results for Q3 2021, it had reported just $1 million of Revenues [2]. For the fourth quarter, it is projected to have generated Revenues of 62.07 million. The company is also projected to post Losses of $1.57/share, compared to a Loss of $12.21 in the third quarter of the last year.
The forecast figures were received from the earnings calendar of investing.com on March 4. [4]
During the last reported quarter (Q3), the EV maker had recorded a Net Loss of $1.233 billion, so we will be awaiting the results for the fourth quarter.
The California-based firm missed its 1,200-units production target for 2021, with 1,015 vehicles having rolled off its factory and 920 having been delivered during the last year. [5]
Given this, investors will also be looking forward to any updated production and delivery figures, any guidance around them and potential commentary in regards to supply chain challenges.
Strong Backing
The Californian start-up has made quite of a splash in the automotive industry and has attracted the interest of some high-profile backers.
The Soros Fund Management, of iconic investor George Soros, revealed that it owned around $2 billion worth of Rivian shares at the end of 2021, as per last month's filing with the U.S. Securities and Exchange Commission (SEC). [6]
The tech and retail giant Amazon is another early backer of Rivian, not only because of the 100K EDVs order, but also because it owned approximately 18% of the company at the end of the past year [7]. Amazon however is shopping around, since it will be the first customer of Stellantis' new Ram ProMaster Battery Electric Vehicle (BEV), which launches in 2023. [8]
The historic car manufacturer Ford, has also invested in Rivian, having made an unrealized gain of $8.2 billion from it, as of the end of 2021 [9]. The two companies are also rivals, especially as Ford continues to push on the EV front, having announced this week that it will separate its Electric Vehicle operations from the legacy internal combustion business [10].
Ford's shares are subject to a contractual 180-day lockup period that commenced with Rivian's initial public offering ("IPO") on November 10, 2021 and it will be interesting to see if it will keep its stake or unload it, when this period ends in a few months.
Competition
Rivian may have beaten major manufacturers to the punch, to become the first company to put an electric truck in the market, but competition is about to become stiff.
America's favorite pickup truck by sales, the Ford F series, is going electric in the form of the F-150 Lightining, which is expected for delivery later this year. Demand for the electric variant is strong and Ford recently announced plans to nearly double production capacity, to 150,000 vehicles per year. [11]
Another popular pickup is making its way into the EV arena, as Chevrolet unveiled the all-electric Silverado, which is not expected to be delivered this year though. [12]
The firm that started the hype around electric trucks – and electric vehicles in general – is none other, than the EV King Tesla with its futuristic Cybertruck. Although it was unveiled all the way back to 2019, it has faced multiple delays and it looks like it will not be released within this year either, since Mr Musk said that Tesla "will not be introducing any new models this year", during the latest earnings call. [13]
Customers may not yet have other options on this segment, but apparently they reacted strongly to Rivian's price hikes of up to 20% earlier this week, forcing the company to roll them back. Electrek published the relevant letter from CEO RJ Scaringe to owners, where he notifies them that "For anyone with a Rivian preorder as of the March 1 pricing announcement, your original configured price will be honored. If you canceled your preorder on or after March 1 and would like to reinstate it, we will restore your original configuration, pricing and delivery timing" [14].
Stock Movement
RIVN.us rallied up to $179.48 during its first trading days in November, but has since been declining and currently trades below it IPO price. The new year started in a poor fashion, having shed more than 30% during the first two months, even though it managed stabilise in February.
The US tech sector in general has been having problems in 2020 though, hurt by surging inflation, the Fed's monetary tightening prospects and geopolitical events, with the NAS100 having lost more than 10% during the same period.
Nikos Tzabouras
Senior Market Specialist
Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. He has a long time presence at FXCM, as he joined the company in 2011. He has served from multiple positions, but specializes in financial market analysis and commentary.
With his educational background in international relations, he emphasizes not only on Technical Analysis but also in Fundamental Analysis and Geopolitics – which have been having increasing impact on financial markets. He has longtime experience in market analysis and as a host of educational trading courses via online and in-person sessions and conferences.
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