(Reuters) – Rivian Automotive Inc shares fell 10% in premarket buying and selling on Friday, after the electrical pick-up truck maker’s first outcome as a listed firm highlighted the challenges it’s probably to face in ramping up manufacturing to tackle EV chief Tesla Inc.
Rivian additionally introduced plans to construct a $5 billion plant to ramp up capability, whereas flagging manufacturing challenges even because it receives about 2,000 pre-orders each week.
“We don’t need to learn an excessive amount of into near-term issues … however it does spotlight the danger that Rivian has quite a bit on its plate,” RBC Capital Markets analyst Joseph Spak mentioned.
The firm expects manufacturing to fall “just a few hundred automobiles quick” of its 2021 goal of 1,200 due to supply chain constraints.
Increasing manufacturing of R1T truck, R1S SUV and Amazon’s supply vans inside just a few months could be akin to “a very advanced orchestra,” Chief Executive Officer RJ Scaringe mentioned.
Construction of Rivian’s new Georgia plant will start subsequent summer time and manufacturing will begin solely in 2024. The firm plans to improve manufacturing by 50,000 automobiles at its plant in Normal, Illionis, which opened in September.
“The robust order e-book supplies help for the manufacturing ramp, although does add strain to get automobiles to prospects that will get impatient as present R1 orders will not be prepared till the top of 2023,” Wells Fargo analyst Colin Langan mentioned.
Rivian faces recent challenges in constructing quantity as demand rises whereas squashing doubts on whether or not a brand new electrical automobile firm will likely be in a position to survive what Tesla CEO Elon Musk referred to as “manufacturing hell.”
Soon after Rivian’s IPO Musk mentioned that top manufacturing and breakeven money movement could be the “true take a look at” for Rivian.
Shares on the earth’s most precious automaker after Tesla Inc have gained 40% since their blockbuster IPO in November.
(Reporting by Akash Sriram and Nivedita Balu in Bengaluru, Ben Klayman in Detroit; Editing by Vinay Dwivedi)
