In just two months, Rivian embodied once what it meant to be ups and downs.
On November 10, 2021, Rivian, a new American car creation company known as the "Tesla Killer", went public on the NASDAQ for $78 on the day of listing. No one wants to miss a second Tesla, and just five days later, Rivian's stock price rushed to $179.47, with a market value of $161.523 billion, surpassing GM and Ford in one fell swoop and ranking third among global car companies.
However, the carnival of capital did not last long. After peaking on the fifth day, Rivian shares fell all the way, even falling below the issue price to $75.13 last Wednesday. As of the previous session, Rivian closed at $86.28, with a market value of only $77.68 billion, and the global car company's market value ranking also fell to eighth.
What about the next Tesla?
Founded in 2009, Rivian has completed multiple financings since 2019, raising more than $10 billion in cumulative capital. Among them, the two major established car companies in the United States, General Motors and Ford, have invested in Rivian. Amazon, on the other hand, is the biggest backer and shareholder, holding not only 18.9 percent of Class A shares and 17.3 percent of the shares, but also ordering 100,000 electric vans at Rivian in 2019, with the first to be delivered in 2022.
With a strong endorsement and 100,000 orders, Rivian can be said to be listed with a golden key, and the stock price naturally ushered in a surge. In recent days, however, Amazon has shaken. On Wednesday, Stellantis and Amazon announced a collaboration with automotive software at its core. At the same time, Amazon announced its decision to buy an electric delivery van from Stellantis. While not disclosing the exact number, Carlos Tavares, CEO of Stellantis, said: "It's a "substantial number." ”
Amazon's empathy has led to the collapse of Rivian's stock price in recent days, but the calmness of capital has a lot to do with Rivian's poor cash flow and production capacity.
Like other emerging automakers in their infancy, the current Rivian is facing poor production capacity, especially in the context of the core shortage, its production and delivery capabilities are even more tested.
In September 2021, Rivian unveiled its first model, the R1T electric pickup, and began delivering another model, the R1S electric SUV, in December 2021. Rivian's earnings report shows that as of September 30, 2021, it has produced 12 R1T electric pickup trucks and delivered 11 vehicles. As of December 15, 2021, Rivian had produced 652 vehicles and delivered 386 R1 vehicles.
Previously, Rivian planned to deliver 1,200 vehicles in 2021. But just last month, Rivian said it might not be able to meet its own 2021 production targets due to severe supply chain constraints; it expects to deliver hundreds of vehicles in 2021 instead of the previously planned 1,200.
In the earnings report, Rivian also admitted that it relies on third parties to manufacture and supply key semiconductor chip components required by the vehicle, has not signed long-term agreements with all semiconductor chip manufacturers and suppliers, and if the manufacturer or supplier is unwilling or unable to provide enough semiconductor chips, it may not be able to find an alternative source in time, and the business will be adversely affected.
Constraints on capacity and delivery put cash flow under extreme pressure. Rivian's prospectus shows a loss of $426 million in 2019 and widened to $1.018 billion in 2020. Coming to 2021, the loss is further expanded. In the third quarter of 2021, Rivian's net loss was as high as $1.233 billion, compared to $288 million for the same period in 2020. From January to September 2021, Rivian's net loss was as high as $2.227 billion, which was also significantly higher than the loss of $665 million in the same period in 2020.
At the moment when Rivian's market capitalization was high, Musk, who also suffered from capacity problems, had already poured cold water on him: "I hope that Rivian can achieve high yields and breakeven cash flow, that is the real test." Of the hundreds of auto startups, whether fuel or electric, Tesla is the only U.S. car company to achieve mass production and positive cash flow in the past 100 years. It is worth mentioning that at the end of October, Rivian opened a second line without the first line running properly. Musk commented that Rivian did not focus on large-scale mass production and deliver sales results, and first amplified the probability of failure. ”
Unexpectedly, Musk's two sentences became a slur, poking at Rivian's pain points and hidden dangers. Musk's divine prediction stemmed from Tesla's experience. In 2017, in order to solve the mass production problem of the Model 3, Musk often worked overtime at the Tesla Gigafactory, and even slept in the factory when needed.
From the third quarter of 2019 to the first quarter of 2020, Tesla achieved three consecutive quarters of profitability for the first time. This happened after the large-scale delivery of the model 3. In addition, in 2020, Wei Xiaoli's gross profit regularization is also after their respective large-scale deliveries.
Obviously, even if the new forces how to advertise themselves as technology companies, but it is difficult for smart women to cook without rice, the attributes of automotive products are doomed to sales and the cash flow brought by sales is the root of the survival of enterprises. However, in this regard, Rivian is not prepared, Tesla, Wei Xiaoli stepped on the pit, Rivian is bound to step on again.
After this big ups and downs, many people began to look at Rivian's prospects calmly. Pessimists believe that Rivian's main pickup truck products are not suitable for China and Europe, the world's two largest electric vehicle markets, and Rivian has no possibility of turning over.
In this regard, I do not think the same, Rivian's main promotion of skateboard chassis technology, compared to the traditional platform car can be launched more quickly, as long as the body body is replaced, you can derive various types of products such as cars, SUVs and even sports cars, if you want to enter China and Europe, Rivian will not be without cars to sell.
At the same time, Rivian has received quite a few orders. Earnings reports show that as of December 15, 2021, it has received about 71,000 R1 orders in the United States and Canada, and amazon has not yet reduced or cancelled truck orders, Amazon said: "We are still excited about the partnership with Rivian, which will not change our investment, cooperation, order size and timing." "So, as long as we can survive the capacity dilemma, the nearly 200,000 orders are enough for Rivian to turn a profit."
AUTHOR RushB
"Don't leverage, the bar is your right"