Image source @Visual China
Text｜Power Plant, Author｜Yan Liting, Editor｜Gao Yulei
In November 2021, Rivian, a new American car manufacturer, officially landed in the capital market, and set a record for the largest IPO in 2021 and the sixth largest IPO in American history. time.
On May 12, Rivian released its unaudited financial report for Q1 2022. According to the financial report data, in Q1 2022, Rivian’s total revenue was US$95 million, far lower than the market’s expected US$130 million. During the reporting period, Rivian’s total loss was US$1.59 billion, equivalent to a net loss per share of US$1.77, the same Less than the market expected $ 1.44.
There is no doubt that this is a failing report card. However, this isn’t the first time Rivian’s performance has exploded.
On March 10, in the first performance report released by Rivian after its listing, many key indicators such as revenue and profit fell short of expectations. At the same time, Rivian also lowered its production guidance for 2022 due to supply chain constraints. According to management estimates, Rivian will only be able to achieve a production capacity of 25,000 units in 2022. Previously,
Rivian gave an annual target of 50,000 vehicles at the roadshow.
Along with the two bad performance reports came the first round of lifting of the ban after Rivian went public.
On May 8, CNBC reported that Ford Motor, as the fourth largest shareholder, will sell Rivian shares through Goldman Sachs after the lock-up period expires. Affected by this, after the opening of this week, Rivian gapped lower and once hit a record low of $19.25. After the release of this financial report, Rivian’s share price showed signs of stabilizing slightly due to the management’s repeated reiteration of the 25,000-unit production target.
As of the close on May 12, Rivian’s stock price closed at $24.3, corresponding to a market value of $21.8 billion. Since the beginning of this year, Rivian’s market value has fallen by 76%, and it has dropped 86% from the peak of its market value of $161.6 billion. . In response, Wedbush Securities analyst Dan Ives said in a note to clients that the Rivian story has disappointed Wall Street so far.
Only 1,227 new vehicles were delivered, and Rivian’s performance exploded for the second time
As an electric car company established in 2009, Rivian was only 6 years later than Tesla. Unlike Musk, who has his own traffic, the founder of technology, RJScaringe, is low-key and has been silent for many years after Rivian was established. In 2018, with the launch of the electric SUV R1S and the electric pickup R1T, Rivian became an instant hit.
If Tesla is subverting the traditional auto industry with intelligent technology, Rivian is relying on electrification technology.
As the core of all its electric vehicles, Rivian’s self-developed electric skateboard platform integrates battery pack, suspension system, electric motor and computer control system, which can be controlled by humans or machines, and can also be connected to the Internet platform. Based on this electric skateboard platform, Rivian has created the R1 platform and the RCV platform for the consumer market and the commercial market respectively.
Among them, R1S and R1T are two consumer models launched by Rivian based on the R1 platform. In addition, Rivian also launched an electric truck EDV based on the RCV platform. This model is jointly designed and built by Rivian and its shareholder Amazon. In 2020, Bezos said in his final shareholder letter before stepping down that Amazon had ordered 100,000 electric vans from Rivian.
However, since the start of delivery in Q3 2021, Rivian has not been able to improve its production capacity. For 2021, Rivian has produced just 1,105 vehicles. According to Rivian’s latest financial report, in Q1 2022, Rivian produced a total of 2,553 vehicles. As of May 9, Rivian had produced a total of 5,000 vehicles, but only 1,227 vehicles were delivered to customers in Q1.
In this regard, the management said at the performance analysis meeting that due to the tight supply chain, the production line has been shut down for longer than expected since the end of March, which caused Rivian to suffer about a quarter of its production capacity loss. In response to the gap between production and delivery, management said that although Rivian adopts a direct sales model, there is a time difference between production and transportation, and the two will not be completely synchronized.
According to Rivian’s disclosure, its Illinois plant will have an annual production capacity of 150,000 vehicles once the production line is running at full speed.
In Q1 2022, Rivian achieved revenue of $95 million with 1,227 deliveries, of which cost of revenue was $597 million, gross profit was -$502 million, and operating expenses were $1.579 billion, compared with $410 million in the same period last year. , an increase of 285% year-on-year, with a net loss of $1.59 billion, compared with a net loss of $414 million in the same period last year, a year-on-year increase of 261%.
Based on the delivery volume of 1,227 vehicles, in Q1 2022, Rivian’s revenue per bicycle is US$77,400, the gross profit per vehicle is -US$409,000, and the net loss per vehicle is US$1.298 million. In this regard, Rivian’s CFO Claire McDonough said at the performance analysis meeting that the company’s gross profit is affected by two aspects, one is the impact of inflation, and the other is the impact of low utilization of large production lines.
Under the pressure of inflation and rising component costs, in early March, Rivian announced that it would increase the starting price of the R1T by 17% and the starting price of the R1S by 20%. At that time, Musk said on Twitter that Rivian’s gross profit margin would be staggeringly negative.
Rivian’s gross profit will continue to be under pressure in the short term due to production issues, but according to Claire McDonough’s forecast, over time, gross profit margins will not always grow linearly, but will usher in an explosive growth from an inflection point. increase.
“We are in the middle of the S-curve,” said RJScaringe, the founder of Rivian. The company has been working with suppliers to ensure more parts supply, and the overall production capacity is constantly improving. He said that the company will add another one in the second half of the year. Production shifts, “We’ve seen the worst, or we’ve reached the bottom of the supply chain.”
The supply chain is stuck and the tide of lifting the ban is coming, Rivian enters the dark moment
From the perspective of the capital market, the outside world seems to have little confidence in Rivian.
A set of unavoidable data is that since 2022, among the top four new energy seed players in the United States, Tesla has fallen by 31.1%, Nikola has fallen by 43.8%, Lucid has fallen by 58.8%, and Rivian has fallen by 76.6%. %.
As a teammate in the same trench as Tesla, Rivian’s appearance once broke the dominance of the U.S. electric vehicle market, and was hailed as the “Tesla killer” by the outside world. After a high-profile listing in November 2021, the market value has risen rapidly. To 161.6 billion US dollars, and surpassed the two traditional giants of General Motors and Ford in one fell swoop, and now, not only has been beaten back to its original shape, but also subordinated to Lucid.
After the release of this financial report, Rivian stopped falling and stabilized, and its stock price closed up 19.96%. Among them, one of the most important reasons is that although the outside world has doubts about Rivian’s supply capacity, the management still reiterated the annual production target of 25,000 vehicles, and the joining of Frank Klein, an executive of parts giant Magna, will also bring pressure. The role of cabin stone, the latter will serve as Rivian COO responsible for the supply chain.
In terms of capacity building, in addition to the plant in Illinois, Rivian will spend $5 billion to build a new plant in Georgia. According to the plan, the new factory will build the second-generation production line and will launch an economical SUV called the R2 in 2025. RJScaringe said the company’s cash flow of up to 17 billion US dollars is enough to support the advent of this car.
In addition, for Rivian, long-term performance support comes from strong market demand. According to Rivian’s disclosure, as of May 9, in addition to Amazon’s 100,000 orders for electric vans, it also had up to 90,000 orders for consumer models. Although Rivian has caused user protests and chargebacks after the price increase in March, it has still added about 10,000 new orders.
“After taking various adverse factors into account, even with the current overall stock market downturn, we believe that the company’s current share price is still slightly lower. By estimation, the current share price is not sufficient to reflect the company’s 200,000 trolley year in 2030. Sales expectations,” Morgan Stanley analyst Adam Jonas gave Rivian an overweight rating after the earnings release, with a price target of $85.
Meanwhile, Wedbush Securities analyst Dan Ives, while maintaining a bullish stance, lowered his price target on Rivian to $30 from $60, saying if Rivian wants to be a force in the EV market over the next decade, Management must figure out a way to start delivering new cars to customers and stop making excuses for poor performance.
It is foreseeable that with the arrival of the first round of lifting the ban after listing, this capital-level disagreement and revaluation will continue.
According to CNBC, Ford Motor, the fourth largest shareholder of Rivian, will sell 8 million of its 102 million Rivian shares through Goldman Sachs after the lock-up period expires. Ford has since confirmed this in a regulatory filing. A sale action. And, in addition to Ford, shareholders will sell an estimated 13-15 million Rivian shares through JPMorgan Chase.
CNBC said in a report that the average strike price of the two batches of shares was around $26.9, a 65% drop from the listing price of $78. In Q1 2022, as shareholders holding 17.7% and 11.4% of Rivian, both Amazon and Ford were dragged down. Among them, the total investment loss of the former was pushed to $7.6 billion, and the direct loss of the latter reached $5.4 billion.
However, Amazon has so far not expressed any intention to reduce its holdings. The market also has different understandings of Ford’s reduction of holdings. It is reported that in addition to the sluggish performance, another important reason for Ford to sell Rivian is that Rivian’s electric pickup truck has direct competition with Ford’s Lightning pickup truck F-150. It’s slightly less powerful than Rivian’s R1T, but it’s also cheaper.
Even so, the pressure on Rivian should not be underestimated. It is reported that after the lock-up period on May 10, Rivian will face the pressure of lifting the ban on about 720 million shares. In the past three months, 21 analysts in the market have given rating instructions to Rivian. At present, the average target given by analysts to Rivian is The price was US$74.14, a decrease of 28.98% from the previous US$104.4.
And for Rivian, the bearish factor still seems to be clear. According to a May 13 announcement from the U.S. Highway Safety Administration, due to a calibration issue with the seat assembly, the R1T’s airbags may not deploy properly in a crash, especially when a child is sitting in the front seat. Rivian therefore announced a recall of 502 electric pickups on the market.
Based on this calculation, the recalled vehicles will account for 10% of Rivian’s total production. Although this safety hazard has not caused any substantial harm, for Rivian, which is already at a low point, the current recall is undoubtedly worse.
It took Rivian 12 years from the start of the business in 2009 to the peak of its market value in 2021, and it took only half a year for Rivian to fall from the peak of its market value to the valley of its value. As for how long it will take to get out of the valley, we will wait and see for now. .
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