[ad_1]
On Tuesday, Rivian said it was recalling 12,716 vehicles to fix a faulty sensor in the front passenger seat, its second major recall in less than six months. The recall covers nearly 89% of the vehicles it produced through September, after which it fixed the problem on subsequently built sport-utility vehicles and trucks.
The car maker said it was unaware of any accidents or injuries related to the issue.
The Irvine, Calif.-based company also released financial results Tuesday after the market’s close, reporting a net loss of $1.72 billion for the fourth quarter, compared with a $2.46 billion loss in the same year-ago period.
The startup said its adjusted per-share loss was $1.73 in the fourth-quarter. That was less than the $1.96 loss analysts had expected, according to FactSet.
Rivian depleted its cash reserves at a faster rate than in previous quarters, reporting that it had $11.6 billion in cash and cash equivalents as of Dec. 31, about $2.2 billion less than at the end of the previous three-month period.
The auto maker also fell short of Wall Street’s expectations on revenue, reporting sales of $663 million for the October-to-December period.
Rivian shares fell 9% in after-hours trading.
The results come as the auto industry confronts rising interest rates that threaten to soften demand for new cars and trucks. Rivian took an additional hit this past year when the U.S. changed the rules on federal tax credits for EV purchases, setting both local manufacturing requirements and price caps on qualifying vehicles. As a result, many Rivian customers don’t qualify for the tax credit.
“What we’re seeing in terms of interest rates is, across the industry, having an impact on moderating demand,” said Rivian Chief Executive RJ Scaringe. The company no longer reports how many reservations it has for its vehicles, but Mr. Scaringe said the backlog of orders will last until 2024. The company reported it had 114,000 reservation holders in September.
For this year, Rivian said it aims to produce 50,000 vehicles, below what several analysts had predicted ahead of earnings. In a note sent to clients last week, Wells Fargo analyst
Colin Langan
reduced production expectations from 79,000 to 63,000 to reflect manufacturing halts during the current quarter as Rivian prepares to make vehicles with a new battery and electric motor.
Rivian said production this year would be hit by supply chain issues and planned factory shutdowns to boost capacity for consumer vehicles at its plant in Normal, Ill.
The company currently produces pickup trucks and SUVs in one half of the factory and commercial vans in the other half. While the plant has the potential to produce up to 150,000 vehicles a year, Rivian said it could currently make only 65,000 R1T pickups or R1S SUVs.
After shutting down the Normal facility to reorganize it, Rivian hopes to increase that production capacity to 85,000 by mid-2024.
The company is currently working to fill orders from customers who made their reservations before Rivian raised prices to cover higher raw-material costs. As a result, Rivian is losing money on many of the vehicles it sells today, said Claire McDonough, Rivian’s chief financial officer. Rivian hopes to achieve “positive unit economics” in 2024, she said.
For the full year 2022, the company lost $6.75 billion on $1.66 billion in revenue.
Rivian entered 2022 flush with cash from a lucrative initial public offering and with plans to swiftly increase output of its vehicles and expand into new markets.
Instead, the upstart was dogged by parts shortages and obstacles on the manufacturing floor that led it to produce about half the number of trucks and SUVs it had initially anticipated.
In response, the company has cut spending and initiated two rounds of layoffs as it focuses on conserving cash while it fixes its problems at the factory. Rivian has also delayed a number of projects, including its next-generation vehicle called the R2, and fell short of its production goal of 25,000 units last year by around 700 vehicles, in part due to missing parts.
Executives say the company is focusing its cash this year on its consumer business, selling R1T pickup trucks and R1S SUVs, as well as its existing contract to sell 100,000 battery-powered delivery vans to Amazon.com Inc.
Rivian is one of a group of EV startups whose ambitions for growth have been upended by the difficulties of mass-manufacturing automobiles. With capital markets tightening, several of these companies are now trying to preserve cash as they race to get more vehicles in the hands of customers and stem losses.
Last week,
Lucid Group Inc.
said it ended 2022 having lost $2.56 billion on revenue of $608 million, which the company partly attributed to its need to produce more vehicles to cover costs.
The luxury electric-sedan maker also reported declining reservations and set an output target that fell short of analyst expectations. Lucid plans to manufacture up to 14,000 vehicles this year, a figure meant to reflect concerns about the effect rising interest rates will have on car sales, company executives said.
Fisker Inc.,
which has yet to begin customer deliveries, posted a loss of $170.1 million, or 54 cents a share, for the quarter ended Dec. 31. Its shares rallied, though, after the electric-vehicle startup confirmed that deliveries for its first vehicle, the Ocean SUV, would start this spring.
Write to Sean McLain at sean.mclain@wsj.com
Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
[ad_2]
