Rivian Automotive warned that the supply chain disruptions that have troubled carmakers since last year will be the “limiting factor” in its plan to make 25,000 electric trucks this year.
Chief executive RJ Scaringe said Rivian had fewer problems securing parts in the third quarter than in the first half of the year. Still, production at its Illinois factory stopped for five days because it lacked a single part.
“That improvement, we’re absolutely seeing,” he said. “But with a vehicle that has hundreds of suppliers, and thousands of components . . . it only takes one part from one supplier to stop the line.”
Rivian has struggled in the year since it went public at a price of $78 a share. Its market capitalisation of $29bn is about one-third of what it was in November 2021, while one important customer, Amazon, agreed to buy trucks from a rival. It had to recall almost all the vehicles it has manufactured because of a nut that needed tightening.
But Scaringe told investors on Wednesday that 83 per cent of those repairs have already been made and reaffirmed Rivian’s production guidance, which it had halved in March.
The manufacturer reported better operating earnings than Wall Street expected. It lost $1.3bn in the third quarter, instead of the anticipated $1.4bn, on $536mn in revenue.
Scaringe and chief financial officer Claire McDonough said that Rivian’s costs have decreased as its plant grows more efficient and it no longer needs to spend money related to launching four new models.
The company added a second shift at its factory and is attempting to increase production. McDonough said there would be a “significant discrepancy” in the fourth quarter between how many vehicles the company makes, and how many it delivers.
Rivian also said it would spend $1.8bn on capital expenditures this year, pushing some planned spending into 2023. Analyst Jordan Levy of Truist Securities estimated the reduction lowered Rivian’s capital expenditure for the year by more than 12 per cent.
“We view 3Q results as positive for [Rivian] given the company’s notable progress on cost management and operational efficiencies, and would expect shares to outperform tomorrow,” he said in a note.
Shares for the manufacturer, which closed at $28.07, rose nearly 7 per cent in after-hours trading.