Rivian (RIVN) Q3 Update
Rivian (RIVN) reported its first quarter as a public company yesterday. Adjusted EBITDA loss was -$727 million, slightly below consensus of -$690 million, while revenue of $1 million was slightly above consensus. The company ended Q3 with $5.2 billion, but we need to add $13.5 billion from the IPO to get a more accurate balance. Minus cash burn since the close of Q3 Rivian probably has around $16 billion now.
The only not-so-great news is that production is a little slower than expected and costs are a little higher. This isn’t surprising given supply chain constraints in the world and Rivian’s status as a start-up auto producer. It’s worth noting that the challenges aren’t of the same scale faced by other manufacturers (we’re talking small numbers here after all).
Expected 2021 production of 1,200 units sounds like it will be closer to 1,000 (a few hundred short, as per management). I don’t see this changing the story at all. That said, in the current environment the market did not receive the news well. No guidance was given on 2022 production. This is something the market probably wants more clarity on, even if it’s just a rough guess.
Positives are aplenty. Aggregate pre-orders for the R1T and R1S now stand at 71,000. That’s up significantly from 48,000 at the end of September and 55,000 in early November (time of IPO). Hard to say if this is above or below expectations.
The R1T also won MotorTrend’s 2022 Truck of the Year. Some may not care about such an award but I think it shows how cool of a product Rivian is making. Finally, management announced a second manufacturing plant to be located in Morgan/Walton, Georgia. Construction will begin in summer 2022 with expected capacity of 400,000 units, set to begin in 2024.
Big picture, this is the right time for this company as far as the EV auto market goes. But it is an admittedly challenging time for this stock given downward pressure these days on anything associated with growth, risk, etc. That’s part of why we stepped in (buy on the pullback) but still, factor that into your buying cadence.
I don’t formally track prices for averaging in as that gets too unwieldy with so many positions in our portfolio, but the strategy makes a ton of sense for investors. BUY