The Irvine, California-based Rivian reported on Tuesday that while it built 13,980 vehicles in Q1, it only delivered 13,588. Additionally, Rivian reiterated its earlier projection of producing 57,000 cars in 2024.
Analysts predicted that Rivian would deliver 13,000 units in Q1 before to Tuesday’s announcement. On February 21, Rivian forecast that while consumer and commercial car deliveries will increase by low single digits in 2024, production would be unchanged from 2023.
The automaker also predicted that Q1 2024 car deliveries will be between 10% and 15% less than Q4 2023’s total of 13,972 vehicles. Rivian’s Q1 deliveries did, however, decrease by just 3%.
During Tuesday’s stock market activity, Rivian’s shares fell 5.2% to $10.51. RIVN shares increased 1.3% to 11.09 on Monday.
Rivian Stock: Funding And New Product Line
On March 7, the EV startup introduced the R2, a smaller, less expensive next-generation car and platform. Estimated starting price for the car is $45,000, and it is anticipated that it will also be eligible for the $7,500 Inflation Reduction Act (IRA) tax credit.
Production of the car was supposed to take place at Rivian’s new Georgian factory. But instead of building its $5 billion factory, the corporation decided to create an R2 production line at its Illinois operation. The R2 platform is anticipated to go into production in 2026, with initial deliveries scheduled for the first half of that year.
Along with the R2 platform, Rivian also unveiled the R3, a more compact crossover, and the R3X, a high-performance model. Regarding the R3 or R3X, the business made no mention of cost or estimated delivery times. According to Rivian, the R3X will start to be delivered after the R2, and it will cost less than the R2.
Rivian reported that it had received over 68,000 R2 bookings in the first 24 hours following the launch.
As a result of the enthusiastic reaction to the EV startup’s R2 and R3 vehicle unveiling event, RIVN shares increased. Thoughts about the company’s ability to launch its new product line on its own in the face of declining demand for electric vehicles still linger.
Adam Jonas, an analyst at Morgan Stanley, stated after the event that the R3 announcement “stole the show.” But the expert was also cautious.
“While Rivian excited the market with the unveil of its next 3 years of new product pipeline, investors may also want to contemplate the potential risks of showing too much,” Jonas stated.
The analyst went on to say that the decision to postpone plans to build a facility in Georgia, which should result in capital expenditure savings of about $2.25 billion, may be just as significant as the new items. But Jonas also stated in his letter that he doesn’t think Rivian can successfully launch its new goods on the market by itself.
The Cash Question of Rivian
After announcing on February 21 that it had lost $1.36 per share in the fourth quarter despite sales doubling to $1.31 billion, Rivian launched its product. Wall Street anticipated $1.28 billion in revenue and a $1.35 loss. Additionally, the automaker said that 10% of its paid staff would be let go.
According to Rivian’s quarterly cash on hand, Tesla (TSLA) could go bankrupt in about six quarters, according to a message made late on February 21 by Elon Musk on X, formerly Twitter.
During the Q4 earnings call, Rivian’s chief financial officer Claire McDonough assured investors that the company is “confident that our cash, cash equivalents, and short-term investments can fund our operations through 2025.”
“We aim to maintain a strong balance sheet position by continuing to drive cost efficiencies and improve our vehicle unit economics, while opportunistically evaluating a variety of capital markets available to Rivian ranging across the capital structure,” added McDonough.
In the Automakers industry category of IBD, Rivian stock is ranked ninth. Out of 99, RIVN has a Composite Rating of 20. The stock also has an EPS rating of 40 out of 99 and a Relative Strength Rating of 7.