Rivian shares slump to record low following November IPO after it cuts production target for 2021 and highlights supply-chain challenges
Shares in Rivian Automotive fell to a record low on Friday after the company cut its 2021 vehicle production target and highlighted supply-chain issues.
The company, which held a blockbuster IPO on 10 November, said it expected to fall “a few hundred vehicles short” of the year’s production target of 1,200 vehicles.
It said it faced supply-chain issues and challenges in expanding production of the vehicles’ complex batteries.
“Ramping up a production system like this, as I said before, is a really complex orchestra,” said Rivian chief executive R.J. Scaringe.
He added that the issue “doesn’t present any long-term challenges”, a sentiment echoed by many financial analysts.
But investors drove Rivian’s shares down 15 percent on Friday, before they recovered to end the week at $97.70 (£74) per share.
The intraday low and closing price were both new lows for Rivian, with shares down 3.4 percent since the company began trading.
Rivian said pre-orders for the R1T electric pick-up truck and R1S SUV increased to 71,000 as of 15 December, up 28 percent from 55,400 in October and higher than the company had expected.
Rivian said it is receiving about 2,000 orders per week, while analysts noted that current orders would only be delivered at the end of next year.
Rivian last week announced plans to build a $5bn plant in Georgia to expand capacity, with construction of the facility to begin next summer and vehicle production to start in 2024.
The company plans to increase production by 50,000 vehicles at its Normal, Illinois plant, which began manufacturing the R1T pickup in September and added the R1S SUV last week.
Production of delivery vans for backer Amazon is to begin at the Normal plant this m onth.
Soon after Rivian’s IPO Tesla chief executive highlighted the “production hell” that he said would be the “true test” for Rivian.
Rivian also delivered its first quarterly earnings report as a public company, with results in line with analysts’ expectations.
The company reported an operating loss of $776m and a net loss of $1.23bn.