Skip to main content

How Rivian’s $1.7 billion Q2 loss will affect consumers and the EV market

Planned for 2025, First Rivian Will Have to Recover Large Losses

An August 11, Q2 earnings call with Rivian CEO RJ Scaringe revealed the brand new auto manufacturer lost $1.7 billion in the last three months and expects to lose $5.4 billion total in 2022.

While this might have investors running for the hills in other markets, it’s normal for a budding auto manufacturer. The auto industry presents one of the steepest barriers to entry for any new business. The truck startup is trying to follow in Tesla’s very large footprints to establish itself as the second mass-market American automotive company to establish a presence since Chrysler took root in the 1920s. That’s a big dream, but there are even bigger believers in Rivian. With deep pockets, massive investors, an innovative and attractive product, and plans through 2025, Rivian has a shot at sticking.

A prototype Rivian in 2018.
Rivian Auto

Enthusiasm and demand for Rivian’s maiden product, the five-seat R1T Launch Edition pickup truck is still very high, despite an initial MSRP of $67,500. Demand for electric SUVs and trucks is increasing, Rivian said, claiming a backlog of preorders that reached 98,000 at the end of June.

Still, it will have to deliver more than the 4,401 vehicles across the R1T, R1S, and EDV 700 (Amazon electric van) lines in the second quarter. This will be in spite of supply chain shortages and snags, Scaringe added, reiterating the EV company’s annual production forecast of 25,000 units in 2022. This anticipates rolling out a second shift of vehicle assembly to its Illinois plant by the end of the third quarter.

“Our key focus remains ramping our normal facility to its full 150,000 units of installed capacity. While we continue to manage supply chain constraints, we are encouraged by the progress we are making, which is important for us to be able to add a second shift for general assembly towards the end of this quarter,” Scaringe said.

Is Rivian in trouble?

Building ten of thousands of vehicles requires investing billions of dollars in equipment and employees. Entire factories have to be outfitted from scratch, and supply chains need to be established and refined. While the assembly line runs, engineers upstairs require time and money to design vehicle systems, from acceleration to exhaust. This has provided predictable issues for the budding manufacturer.

Rivian’s executive vice president and former Tesla executive Charly Mwangi, who helped fire up the maker’s manufacturing process, left the company. The company laid off 6% of its workforce in July in response to inflationary pressures and rising interest rates, which also led to raising truck prices. Reassuring small investors are Rivian’s reaction to these challenges and the big boys who have billions on the line for Rivian.

In a letter to investors, Scaringe apologized and retracted the price hike. While this slices into profits, its largest patrons can likely afford to receive the financial blow. Amazon owns 18% of Rivian and Ford invested $500 million in the electric truck firm in 2019, and a former executives joined Rivian’s board of directors (only to leave in 2021). Recent additions to the board include Mwangi replacement, former Magna International executive Frank Klein, who took over as chief operations chief in June, and Harald Kroeger, a former Bosch and Daimler executive, who was just announced as a new board member.

In addition to the noted leadership, engineering and design talent, Rivian’s believers point to construction plans for a $5 billion facility in Georgia that it says will be able to produce 400,000 vehicles a year. There’s also plans for the more affordable R2 model, scheduled to be rolled out in 2025.

Rivian R1T Camp Kitchen Walkthrough with RJ

Scaringe, predicted that this more economic model will not only cost less, but be more attractive because of green tax credits. As part of the just-passed climate bill’s focus on a sustainable future for the country, new EV buyers will be eligible for a $7,500 tax credit. This only applies, however, to vehicles with an MSRP under $80,000, which does not apply to the R1.

“While many of our R1 configurations won’t meet the bill’s pricing requirements, our R2 product line and associated cell road map are being developed to allow our customers to capture the value of these incentives,” Scaringe said.

In the three-year interim, Rivian will focus on massaging and finding solutions to supply chain issues and production hangups to deliver 25,000 R1 series units by the end of the year. If car construction ramps up successfully, Rivian will continue with significant plans to be a major player in the blossoming EV truck market.

Matthew Denis
Matt Denis is an on-the-go remote multimedia reporter, exploring arts, culture, and the existential in the Pacific Northwest…
This near-perfect replica of the ‘Back to the Future’ DeLorean could be yours
1981 DeLorean replica rebuilt for one lucky 'Back to the Future' auto enthusiast
1981 delorean replica for auction

 

In 1975, the DeLorean Motor Company (DMC) was founded by automaking legend John DeLorean. Although this brand never produced many cars during its short and tumultuous history, it is well remembered for manufacturing the beautiful gull-winged stainless steel 1981 DeLorean DMC12. 

Read more
Why GM is killing a popular (and affordable) EV
GM has big plans for EVs — just not the Chevy Bolt
2023 Chevrolet Bolt EV parked outside a home.

When the Chevy Bolt EV was released in 2017, we took it on a test drive and it exceeded our expectations. Since then, the Chevy Bolt went on to become General Motors’ best-selling EV. According to Kelly Blue Book, GM overtook Ford to become the second best-selling EV brand after Tesla due to the Chevy Bolt’s high demand. Besides that, the Chevy Bolt is one of the most affordable electric cars on the market today.

But despite its success, GM is surprisingly pulling the plug on the Chevy Bolt. “It's now time to plan to end the Chevrolet Bolt EV and EUV production, which will happen at the very end of the year,” Mary Barra, the CEO of GM, announced the plan during the company’s Q1 earnings call. Why is GM dumping its most popular EV? Well, it has to do with profits.
GM is selling the Chevy Bolt at a loss
When the Chevy Bolt was released in 2017, UBS reported that GM was losing $7,400 for every unit that was sold. As per the report, GM was making a loss because it hadn’t yet ramped up the production of the Chevy Bolt to reduce the cost. Of course, GM was also willing to lose money to make the Chevy Bolt one of the cheapest EVs on the market.

Read more
Pitch up in the best motorcycle tents for camping with your two-wheeler
There's nothing like cruising a backcountry road at sunset, wind in your hair, George Thorogood in your ear, and a few bugs in your teeth.
Wingman-of-the-Road Goose Motorcycle Camping System lake feature

After a few long years of pandemic-fueled "lockup," more and more of us are finally getting back to road-tripping. For some, that means camping across the country in an RV; for others, adventure awaits on the back of a two-wheeler (be it pedal or gas-powered). If you fall into the latter camp, we get it. There's nothing like the excitement of cruising down some backcountry road at sunset with the wind in your hair, George Thorogood in your ear, and a few bugs in your teeth.

If you're planning an extended trip, then you'll be looking to overnight along the way. If an ordinary roadside motel just won’t do, maybe you need a more adventurous alternative. Here are our picks for the best motorcycle tents for camping with your two-wheeler along the way in 2023.
Lone Rider MotoTent V2
Best motorcycle tent overall

Read more