Rivian’s Stock Is Down Even Though Q3 Numbers Were Up. What’s Going on with Rivian Investor Relations?
Key Takeaways
- Rivian shares fell on Monday even though third-quarter numbers looked solid
- Rivian produced 16,304 vehicles and delivered 15,564 vehicles in Q3
- The company has taken steps to improve its financials year, including a 6% staff reduction in February and a $1.3 billion sale of convertible notes in March
Rivian, the Irvine, California-based EV startup, said it was on track to produce 52,000 vehicles in 2023. That’s a higher target than it set in August when supply-chain issues had investors concerned about production.
These optimistic numbers arrive amid concerns over softening EV demand in the U.S. due to high borrowing costs. So, is that why Rivian investors pushed the stock lower despite the company’s outperformance?
We’ll explore Rivian investor relations below.
The state of the EV industry right now
Michelle Krebs, Cox Automative analyst, summed up the state of the industry for Grist: “The demand is not keeping up with production, which is the opposite story of a year ago. We call it the ‘Field of Dreams’ moment. Automakers are building more, but not enough consumers have come to the field.”
Price cuts by Tesla to boost demand (and corresponding price cuts from competitors) pushed average EV prices down to $53,376 in July 2023. Compare that to the high of nearly $70,000 a year ago. Cost reductions for the raw materials needed to make batteries for electric cars have passed even more savings on to customers.
Rivian, however, hasn’t cut prices. It’s been cutting costs instead and moved more production in-house to reduce supplier dependency. That’s been good for Rivian’s performance, but doesn’t change the fact that we’re in a moment of EV supply outstripping demand overall.
What are Rivian investors watching?
Rivian operates from a single factory in Illinois. It plans to produce its 52,000 vehicles this year at that location. It’s worth noting that 52,000 is a little less than one-third of the facility’s capacity — an expensive operation to run.
The company also posted a loss of $1.2 billion in Q2, is likely paying more than market rate for car parts, and has reportedly gone through more than half of its “war chest” of $18 million. Executives don’t expect to hit profitability until the end of next year.
Notably, for each sale of its famous $80,000 truck, Rivian loses $33,000, according to a Wall Street Journal report, which, for obvious reasons, is an unsustainable way to do business.
So, despite these promising Q3 numbers it makes sense that investors have their reservations about Rivian given current uncertainties.
The bottom line
The EV space remains promising, but, at the same time, competitive and uncertain. Q3 saw Tesla report weaker-than-expected deliveries due to factory updates while Rivian beat expectations. But that’s only one moment in time. The tables could turn again.
While Rivian is known right now as “The Tesla of trucks,” it’s got plenty of potential obstacles in its way. Not the least of which: Tesla will soon launch its Cybertruck, too.
