Rivian, the buzzy electric vehicle company backed by Ford and Amazon, reported a net loss of $1.71 billion in the second quarter of 2022 based on $364 million in revenue. It’s a sign that Rivian’s nascent EV business is picking up speed, albeit slowly compared to the previous quarter in which Rivian reported a net loss of $1.59 billion based on $95 million in revenue. Still, the company beat Wall Street expectations for revenue by about $26 million.
The earnings report was also an indication that Rivian still has a ways to go before it can deliver on its promise to upend the auto industry with beautifully designed, emissions-free, adventure-themed trucks and SUVs. The automaker said it expects to burn through $700 million in additional cash before the end of the year.
The earnings report comes on the heels of a positive production update in which Rivian said it made 4,401 vehicles during the three-month period, a 72 percent increase over the previous quarter, and delivered 4,467 vehicles, a 267 percent increase. The company didn’t provide a breakdown between R1T trucks and its electric delivery van (EDV) that is being built for Amazon. (Deliveries of the R1S SUV were delayed until later this year.)
The company will still need to churn out 18,046 vehicles over the next eight months if it’s to meet its goal of 25,000 built this year, or roughly 9,023 vehicles per quarter. That will be no small task but is certainly within the realm of possibility. During the last earnings call, Rivian said that it has more than 90,000 reservations for the R1T and R1S vehicles. Now, the automaker reports that it has increased to about 98,000 reservations.
Still, the company has had to weather some rough waters to get here. Last month, Rivian laid off around 6 percent of its 14,000 employees, or around 800 people, citing a need to cut costs in order to speed up development of future versions of its electric trucks and SUVs.
Ahead of the earnings report, Wedbush’s Dan Ives said that Rivian was showing some signs of improvement. After experiencing “major issues out of the gates,” Rivian is “starting to find their sea legs,” Ives wrote in a note, adding that the company has the potential “to be a major EV stalwart over the next decade.”
But a recent price hike and the news that the revised EV tax credits would alter the landscape for EV buyers has Rivian scrambling to respond. Under the new climate bill put forward by Senate Democrats, pricier EVs (sedans that are over $55,000 for new cars and pickup trucks and SUVs over $80,000) would be ineligible for the $7,500 tax credit.
Some configurations of Rivian’s electric truck and SUV will almost certainly be too expensive to qualify for the credit, which could depress demand. Rivian also bumped up the prices on both of its models by 20 percent, sending its stock price tumbling and forcing CEO RJ Scaringe to issue a public apology.
In response, the company sent emails to customers and posted a support response on its website advising them to sign a “binding contract” before the bill goes into effect in order to lock in their $7,500 tax credit. But it also admits that it can’t “guarantee eligibility” for the incentive.
Rivian reports that it has $15.5 billion in cash on hand. That’ll be very helpful for the automaker if it’s expecting even bigger losses for the year.