Rivian’s stock hit a new low on Friday morning after the firm lowered its car production target for 2021.
After the markets closed on Thursday, the electric car startup said it expects to fall “a few hundred vehicles short” of its manufacturing goal of 1,200 vehicles this year.
Roadblocks highlighted included supply chain concerns and certain sophisticated production constraints.
Rivian Automotive’s stock dropped to a new low Friday morning after the company lowered its 2021 car production target. Rivian Automotive is an electric vehicle start-up that went public in a spectacular IPO last month.
Rivian stated after the markets closed on Thursday that it expects to fall “a few hundred vehicles short” of its 1,200-vehicle manufacturing goal this year. The business claimed it was having trouble with supply chain concerns as well as ramping up manufacturing of the sophisticated batteries that power the cars.
“As I mentioned before, ramping up a manufacturing system like this is a pretty intricate symphony,” Rivian CEO R.J. Scaringe stated. “We’re growing essentially as predicted; the battery restriction is really simply an artifact of bringing up a highly automated line, and it doesn’t pose any long-term issues for us,” says the executive.
Rivian’s stock was down 15% early Friday morning to around $93 per share, a new low since it began trading on November 10. The company’s shares also opened below $100 for the first time on Friday.
Despite Wall Street experts’ cautions that there will certainly be some production potholes in the road for the EV start-up, the stock plunged sharply. Overall, experts downplayed the output drop, agreeing with Rivian’s assessment that it will have little to no influence on the company’s long-term value.
“I don’t believe it’s that big a concern,” Wells Fargo analyst Colin Langan told CNBC’s ‘Squawk on the Street’ on Friday. “It’s a bad start, but it’s very tiny.”
On the bright side, Rivian said that total bookings for the electric R1T truck and R1S SUV had grown to 71,000 as of Dec. 15, up 28% from the previous figure of 55,400 cars in November. This is a greater pace than the corporation had anticipated.
Rivian’s first quarterly report as a public company included the updates, as well as confirmation of plans for a new $5 billion factory in Georgia, which is anticipated to start production in 2024.
Rivian’s third-quarter results were in line with Wall Street sales projections and predictions disclosed as part of its first public offering.
Rivian reported a $776 million operating loss and a $1.23 billion net loss in the third quarter. The business had previously forecast a net loss of between $1.21 billion and $1.28 billion, with an operating loss of between $745 million and $795 million.