Electric pickup and SUV brand Rivian posted a third-quarter net loss of $1.7 billion ($A2.6b) as it scales up production, but says it’s buoyed by a North American order bank totalling some 114,000 cars.
Headlines from its latest investor report show the startup produced 7363 vehicles in Q3, up 67 per cent, taking total production in Illinois, since commencement, to 15,000 vehicles. The Q3 sales generated revenue of $536 million ($A810m).
The annual production target of 25,000 units was recently reaffirmed by management, suggesting a scaling up in Q4.
“We recently initiated our second manufacturing shift and remain focused on ramping production to meet the strong demand for our products. As we navigate through these uncertain economic times, we are encouraged by the strong demand for our products as evidenced by our robust preorder backlog,” the company said.
These 114,000 R1 preorders are separate to the 100,000 initial order of electric vans placed by Amazon, it added.
But it continues to lose money, with the circa $1.7b operating loss over the quarter taking the year-to-date loss to $5.06b ($A7.6b) – offsetting revenues from deliveries against the cost of said revenues, R&D, and admin.
“Throughout the quarter, our cost of materials was impacted by inflationary pressures, which we believe will continue to have an impact on our gross margin for the near future,” the company added.
“As we produce vehicles at low volumes on production lines designed for higher volumes, we have and will continue to experience negative gross profit related to labor, depreciation, and overhead costs.
“This dynamic will continue in the near term and is impacted by the ongoing ramp of our second shift of production, but as we have already started to experience, we expect it will improve on a per vehicle basis as production volumes ramp up faster than future labor and overhead costs increase.”
Rivan said it spent $452m on R&D ($A684m), slightly up year-on-year. It ended the quarter with $13.8 billion ($A20.9b) in cash, giving it enough money to fund its operations through 2025, it said.
The company also pushed the launch of its smaller R2 platform designed to underpin additional vehicles to 2026, from 2025.
“We expect the R2 platform will unlock a global market opportunity for Rivian and are excited about the early development work that is underway,” it said.
“We remain confident in our ability to fund operations with cash on hand through 2025, excluding the impact of the investment in the currently contemplated joint venture with Mercedes-Benz.”
Rivian shares sat at $32.96 ($A49.85) at close yesterday, down from $172 ($A266) at their peak on November 16, 2021.