Author 丨 Cui Liwen
Responsible editor 丨 Xu Jinkai
Editor 丨Zhu Jinbin
Looking at the current new energy market in the United States, Tesla is still the only one, firmly occupying half of the terminal market. The traditional big three in Detroit are also eyeing the strategic layout. In the end, there are very few opportunities and outlets for new forces in the United States to build cars.
As everyone knows, living in such a "gap", Rivian as one of the representatives, in the early morning of November 10, Eastern Time, officially located in the Nasdaq Composite Index bell-ringing listing, stock code "RIVN", at a price of $78 per share, issued 135 million shares.
At the opening of the day, the stock price rose by more than 50%, and the market value once exceeded the 100 billion US dollar mark. Although it retreated slightly, it still closed at $100.73 as of the close, an increase of 29.14%, with a market capitalization of $85.908 billion.
The above operation also made it surpass Ford in the market value on the first day of listing, and at the same time approached GM, successfully winning the title of "the sixth largest IPO in the history of the United States". Obviously, Wall Street investors really need such fresh blood to join. But surprisingly, this enthusiasm did not last long, and it gradually became flat.
At this moment, it has only been more than a month since Rivian officially went public. As of the close of trading on December 17, EST, its stock price closed at $97.700, a decline of 0.26%, and the total market value fell back to $87.073 billion, and even "approached" the first day of the opening.
As for the root cause of the decline, as a latecomer, Rivian still can't jump out of the several major "quagmires" that new cars will inevitably encounter.
An embarrassing earnings report
Why, once the market value of The Rivian rings, can it surpass the local century-old auto giant Ford?
"Valuation front" may be one of the answers. In other words, the current capital market's criteria for judging a company have changed dramatically compared with the past. They are more focused not on what you have done in the past and what you are doing now, but on what you will do in the future.
In contrast, Rivian, at the Los Angeles Auto Show in November 2018, released two prototypes at once: the R1S and the R1T. The former is a 7-seat electric SUV with a starting price of $70,000, while the latter is an electric pickup truck with a starting price of $67,500.
It is precisely because of this product layout that investors smell the difference and scarcity between it and Tesla. Therefore, it is not surprising that it is sought after. More importantly, getting the endorsement and support of the US e-commerce giant Amazon is also the key to Rivian's ability to obtain a high market value. Currently, the former already holds 20% of the latter's shares.
In July this year, in the live broadcast of Amazon CEO Bezos on a rocket to space, the cars he went to the launch site were precisely R1T and R1S. In the increasingly fierce multi-dimensional competition between Bezos and Musk, Rivian has become the biggest "bottom card" for Amazon to try to compete with Tesla.
However, what needs to be vigilant is that from the Q3 financial report recently released by the new AMERICAN car manufacturer, the total quarterly revenue is 1 million US dollars, and the net loss is 1.233 billion US dollars. In contrast, the net loss in the same period last year was $288 million, a significant increase year-on-year. Of this, the operating loss reached $776 million.
And after offering a slightly awkward stage report card, Rivian continues to prove that what he is telling is still a story of "investing in the future". And according to the predictions of many securities analysts on Wall Street, the company's operating profits will not return to normal until at least 2025.
In other words, continuing to burn money to build cars cannot be avoided in the next three years. What kind of means to take, a steady stream of financing, will determine whether Rivian can "continue to live".
Capacity hell, or come
In fact, for all the new forces except Tesla at this stage, "not yet profitable" is the status quo that everyone needs to face. In this process, as long as the business model can justify itself, the terminal can continuously deliver new cars and touch key nodes.
"We are a company in development that has not received substantial revenue so far, and the production and delivery of vehicles begins in September 2021."
Such a passage comes from its CEO's R.J. Scarlinger. Fortunately, it is fortunate that Rivian, which has recently achieved mass production delivery, has a lot of orders in its hands.
To date, the company has received 55,400 pre-orders for R1T and R1S in the U.S. and Canada. Amazon, as the largest "gold owner", also sold 100,000 pure electric truck EDV orders for Rivian.
According to the original plan, by the end of the year, the company will produce about 1,200 R1Ts and deliver 1,000 of them.
With the gradual increase in production capacity, it seems that everything is slowly getting on the right track. Unexpectedly, unfavorable news came quickly.
Recently, Rivian officials said that due to the severe restrictions on the supply chain, it may not be able to meet its own 2021 production targets. It also revealed that it is expected to deliver "a few hundred" vehicles in 2021 instead of the previously planned 1200 vehicles. After the news was announced, it immediately triggered a shock in the capital market, and its stock price fell to the lowest point since the beginning of trading as a listed company.
There is no doubt that the capacity hell is still coming.
"I recommend getting their first plant up and running first, and mass production at a sustainable unit cost, which is extremely difficult." Compared with expanding the scale of production and supply chains, the prototype of the car is insignificant. If these problems are solved, achieving positive gross margins is the next nightmare. ”
To be sure, it was because Tesla had been in a similar situation that Musk was able to warn so emphatically, and Rivian was in the same quagmire.
For reference, the new car manufacturing force has only one factory, located in Illinois, the United States, with an annual production capacity of 150,000 vehicles, far from meeting the demand for orders. According to the follow-up plan, Rivian will continue to invest about $5 billion to build a second plant in Texas, with the goal of officially starting production in the second quarter of 2023.
However, it must be known that the planned production capacity is always a "number", and there are still huge variables in how much it can land. In the painful climbing process, Rivian also needs to overcome the extreme stress test caused by the shortage of chips in the global automotive market.
Moreover, as the biggest competitor, with the scheduled delivery of ford F-150 EV and HUMMER EV, a ruthless fight has begun in the us domestic electric pickup truck segment. As the real "devil king", Tesla Cyberruck has also begun to move towards a round of testing in mass production.
In summary, the time left for Rivian who is still "struggling" may really be running out...