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Rivian Warns of Continuing Losses for the Foreseeable Future in a Filing With the SEC

Being an automotive startup is hard, as Tesla found out the hard way throughout the years from the first Roadster to the fourth gigafactory. Rivian seems to go through similar struggles as it tries to ramp up production, and a 10-K filing with the SEC warns of “continuing losses for the foreseeable future.”
Rivian warns of continuing losses for the foreseeable future 8 photos
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Rivian is not in the best position right now, with missed production targets and burning through cash like there’s no tomorrow. As early as February, the EV startup announced a price increase only to backpedal on this a couple of days later. At that time, Elon Musk warned Rivian of “staggering negative gross margins. ” As one who has confronted a similar situation in the past, Elon Musk knows what he’s talking about.

In a filing with the SEC, Rivian warned investors to expect continuing losses while it grows. Rivian does not expect to become profitable in the foreseeable future, as it will put all the money into expanding its business and production capacity. If it will ever break even is also under discussion, as well as maintaining profitability.

We have incurred net losses since our inception, including net losses of $0.4 billion, $1.0 billion, and $4.7 billion for the years ended December 31, 2019, 2020, and 2021, respectively,” Rivian said in the filing. “We believe that we will continue to incur operating and net losses in the future while we grow, including following our initial generation of revenues from the sale of our vehicles [...]. We do not expect to be profitable for the foreseeable future [...] and we cannot assure you that we will ever achieve or be able to maintain profitability in the future.”

Going from idea to production to positive cash flow is the hardest thing for any startup. Tesla almost crashed in 2008 before presenting the first Model S prototype. So far, Tesla is the only example to challenge the automotive industry heavyweights, and it has already become too big to fail. With strong backing, Rivian is in a good position to be the second to achieve this.

It’s not only the strong backing from the likes of Amazon but also the fact that the Rivian R1T has proved an incredibly good pickup truck. We have no reason to believe the R1S SUV won’t be just as successful. The only problem for Rivian is ramping up production and securing funding for its progress. The new assembly plant it plans to build in Georgia is a $5 billion investment, and it looks like a liability as long as Rivian hasn’t made progress with ramping up production at its existing factory in Normal, Illinois.

 Download attachment: Rivian 10-K filing with the SEC (PDF)

 
 
 
 
 

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