Rivian’s Stock Collapse

Small EV manufacturer Rivian continues to suffer because it is small financially and in terms of production. Its stock is down 36% in the last year, as it should be. The broader market is up 15%.

Rivian’s pickup is sold in the shadow of larger competition. First among these is the Ford F-150 Lightning, the EV version of the most popular vehicle in America. It has held this position for four decades. That means Ford has a universe of millions of F-150 owners that it can market the Lightning. No other car company has that kind of head start. Ford also has nearly unprecedented access to capital, huge manufacturing facilities, a dealer network, and a marketing budget. Rivian, by contrast, has nothing like those advantages.

In its most recently reported quarter, Rivian had revenue of $611 million, against a loss of $1.3 billion. It lost $1.5 billion in the same quarter a year ago. Rivian’s delivery for the period was 10,020, Management says it can ramp up production to five times that. One question is whether it can sell those.

Then, there is the question of whether Rivian will have adequate capital to survive. Its most recent 10-Q is full of warnings about this funding challenge.

Rivian’s vehicles are too expensive. The base price of its R1T is $73,000. For the vehicles’ Launch version, that jumps to $86,800. Car and Driver reported drawbacks: “Costly starting price, no Apple CarPlay or Android Auto, off-road tires sap on-road range.”

Rivian has not made sharp price cuts which now seem critical to the future of EV companies. Ford recently dropped the price of one of its Lightning models so it would qualify for federal tax credits that could be as high as $7,500.

Rivian’s competition problems will get worse. Tesla will begin to sell its Cybertruck this year. Chevy and RAM will soon launch EV versions of their popular pickups.

Also read: The 13 biggest electric vehicle failures in American history.

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