Home Rivian Rivian faces cash burn, demand concerns with Q4 earnings

Rivian faces cash burn, demand concerns with Q4 earnings

Rivian faces cash burn, demand concerns with Q4 earnings


Rivian’s financial performance is another major concern. The company raised massive amounts of cash for its 2021 initial public offering, but is now burning through that cash quarter by quarter.

The automaker said it delivered 20,332 vehicles last year. As part of third-quarter earnings, Rivian said it had about $14 billion in cash to fund its operations, develop less-expensive vehicles and build a second plant. The base R1T has a starting price of $74,800 with shipping.

Rivian is not alone in drawing fresh scrutiny from industry analysts amid high hopes for EV startups in recent years.

Lucid Motors, which launched its Air sedan in late 2021, said last week that it needs to drum up greater demand against macroeconomic headwinds. Lucid reported a fourth-quarter net loss of $473 million. Lucid’s stock price has fallen about 70 percent over the last 12 months.

Steve Weiss, managing partner at Short Hills Capital Partners, said on CNBC last week that Rivian’s troubles are far from over. The automaker’s stock price, down about 75 percent in the last 12 months, is likely to fall further, he said.

“They’ve got a lot of cash, but they’re going to go through it,” Weiss said. “No. 1, I don’t find the vehicles particularly attractive. No. 2, they’ve had major problems. No. 3, they’ve lost a lot of executives and talent.”

In the last six months, at least half a dozen executives have left the company.

Among the departures are Randy Frank, who was vice president of body and interior engineering, and Steve Gawronski, vice president for parts purchasing, The Wall Street Journal reported last month. Rivian confirmed the departures. Rivian also lost its chief lobbyist, general counsel and a senior strategy director.

The automaker has had two rounds of layoffs in the past year, each shedding about 6 percent of staff. The latest, in February, included about 840 employees out of a total work force of 14,000.

Brauer said Rivian is experiencing some of the troubles that Tesla faced when it was a younger company. Tesla took a decade to become profitable — and nearly went bankrupt in the process, according to its CEO Elon Musk. But Tesla had the advantage of being the only company with premium EVs at that time.

Rivian, on the other hand, is searching for a pathway to profitability in what looks to be an intense period of competition, with legacy automakers getting serious about EVs and Tesla planning the next phase of its product portfolio.

“The financials for Rivian are just painful right now,” Brauer said. “They’re spending lots of money and not coming anywhere near paying for it with sales.”

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