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Rivian Net Loss Tripled to $1.71 Billion in Q2 2022, Faces Strong Headwinds Going Forward

Rivian is one of the few EV startups with a sound financial position, thanks to high-profile backers like Amazon and Ford. Nevertheless, the company reported a substantial net loss in the second quarter while strong headwinds are projected to hamper its advances.
Rivian net loss tripled to $1.71 billion in Q2 2022 6 photos
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The second-quarter results were a mixed bag for the company that impressed everyone with the R1T, the first electric pickup truck launched to market. The revenue was $364 million, while the net loss widened to $1.71 billion from $580 million a year earlier. The Q2 results will affect the overall 2022 performance, Rivian warned investors. The company expects its annual adjusted loss before interest, taxes, depreciation, and amortization to reach $5.45 billion, compared with $4.75 billion in 2021.

The EV startup burned through $1.2 billion in the quarter, which leaves $14.9 billion in its war chest. This should be enough to continue the work at its second factory in Georgia, which is expected to cost around $5 billion. Even though its coffers still have plenty of dough, staying on this path would be perilous. This is why Rivian must conserve cash as it ramps up production.

“Though the company has a high cash balance, it may need more liquidity in 2025, earlier than it plans, as competition from Ford, Tesla and GM speeds up,” Bloomberg Intelligence said, according to Automotive News. “Rivian may burn around $19 billion in cash through 2024 as it expands operations, while shareholders Amazon and Ford don’t appear to be capital sources.”

The company has received 98,000 pre-orders for the R1T pickup truck and R1S SUV, matched by the initial order of 100,000 electric delivery vans from Amazon. But it’s clear now that its customers would not be able to access the tax incentives in the new energy and climate bill. The rush to sign contracts for the previous $7,500 tax credit, which is expected to end this weekend, is not likely to influence the results very much.

There were, of course, some bright spots coming from the Q2 earnings conference call. Among them is the revelation that Rivian could benefit from up to $40,000 per vehicle subsidies for large electric commercial vans like the one it’s building for Amazon. The smaller R2 line of vehicles coming in 2025 should also qualify for the new incentives thanks to lower prices and a domestic battery supply chain.

Moving from bean counters to car stuff, we learned that Rivian managed to deliver 4,467 EVs in the second quarter. This puts it ahead of Ford, which sold 4,353 electric vehicles in the same period. However, the sales of the F-150 Lightning only started at the end of April. Rivian has reiterated its production forecast of 25,000 vehicles by the end of the year, which is a good sign for investors.

 
 
 
 
 

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