Photo: Rivian
Amid the price war started by Tesla and the difficult economic conditions, EV startups are likely the most affected. Although it doesn’t compete directly with Tesla, Rivian had to make the painful decision to cut jobs.
We knew what to expect when Tesla announced the aggressive price cuts in January. We’ve already analyzed the far-reaching implications of Tesla’s unusual decision and concluded that EV startups might be the most affected. Without a dependable revenue stream from other products, startups are forced to tap into their cash reserves. Their best hope is that these reserves wouldn’t dry out until the market conditions or their profitability improves.
Lucid already felt the heat of Tesla’s price adjustments and decided to offer a $7,500 price cut on its Air leases. Not only this, but the EV startup removed features from the higher trims to make them more affordable while at the same time introducing less expensive versions of its Air sedan. So far, Lucid has refrained from taking more aggressive action, although the pressure from the Tesla Model S is obvious.
Not the same can be said of Rivian. The other EV startup has been so far more successful in ramping up production and is working to build a second factory. Rivian economic situation looks better than Lucid’s, at least on paper, but it still needs to be careful about how it spends its cash reserves. This is why Rivian has decided to cut costs by cutting off 6% of its workforce.
The decision was communicated by Rivian CEO R.J. Scaringe in an email to employees on Wednesday. Scaringe stressed that Rivian is focusing resources on ramping up vehicle production and reaching profitability while apologizing for the decision. Reuters saw a copy of the email, and a Rivian spokesperson confirmed the email had been sent to employees but declined to comment.
Rivian is ramping up production of the R1T and R1S, but also EDV delivery vans for its top shareholder Amazon, at its Normal, Illinois factory. At the same time, the company is building a new factory in Georgia, where it will assemble its upcoming line of vehicles, the R2. Rivian is still losing money on every vehicle it makes, and it narrowly missed its production target last year, with 24,337 units delivered instead of 25,000.
Rivian had to deal with supply chain disruptions throughout 2022 and was forced to cut its initial production estimates of 50,000 in half. The EV startup pushed back the launch of the R2 platform until 2026 and canceled plans to build delivery vans in Europe in partnership with Mercedes-Benz. Reuters also reminds us that Rivian had $13.27 billion in cash and cash equivalents at the end of Q3 2022, down from over $18 billion a year earlier.
Lucid already felt the heat of Tesla’s price adjustments and decided to offer a $7,500 price cut on its Air leases. Not only this, but the EV startup removed features from the higher trims to make them more affordable while at the same time introducing less expensive versions of its Air sedan. So far, Lucid has refrained from taking more aggressive action, although the pressure from the Tesla Model S is obvious.
Not the same can be said of Rivian. The other EV startup has been so far more successful in ramping up production and is working to build a second factory. Rivian economic situation looks better than Lucid’s, at least on paper, but it still needs to be careful about how it spends its cash reserves. This is why Rivian has decided to cut costs by cutting off 6% of its workforce.
The decision was communicated by Rivian CEO R.J. Scaringe in an email to employees on Wednesday. Scaringe stressed that Rivian is focusing resources on ramping up vehicle production and reaching profitability while apologizing for the decision. Reuters saw a copy of the email, and a Rivian spokesperson confirmed the email had been sent to employees but declined to comment.
Rivian is ramping up production of the R1T and R1S, but also EDV delivery vans for its top shareholder Amazon, at its Normal, Illinois factory. At the same time, the company is building a new factory in Georgia, where it will assemble its upcoming line of vehicles, the R2. Rivian is still losing money on every vehicle it makes, and it narrowly missed its production target last year, with 24,337 units delivered instead of 25,000.
Rivian had to deal with supply chain disruptions throughout 2022 and was forced to cut its initial production estimates of 50,000 in half. The EV startup pushed back the launch of the R2 platform until 2026 and canceled plans to build delivery vans in Europe in partnership with Mercedes-Benz. Reuters also reminds us that Rivian had $13.27 billion in cash and cash equivalents at the end of Q3 2022, down from over $18 billion a year earlier.
Google News