On November 10 last year, Rivian, who was carrying the "Tesla killer" on his head, officially landed on the NASDAQ and successfully raised nearly $12 billion, setting a record for the largest financing scale in the automotive industry. Although a car was not delivered when it was listed, but due to the good market prospects and the endorsement of giants such as Ford and Amazon, Rivian has been strongly sought after by the capital market since its listing, and its stock price once rose by 15.6%, and the market value reached more than 140 billion US dollars, surpassing the traditional giants Ford and Volkswagen, and leapt to become the world's third car company in one fell swoop, only Tesla and Toyota.
In the past 2021, saying that Rivian is the hottest car-making force in the capital market in addition to Tesla, there should not be many people who disagree. But in less than three months, the once-world-renowned new force has encountered a lot of problems, and now the stock price is less than $60, down 23% from the issue price of $78, and 66% from the highest point.
From becoming the world's third-largest car company to falling below the issue price, Rivain took less than two months. So how did this new car-making force, once known as the "Tesla Killer", come to where it is today?
The Rivian crisis is emerging
In the early days of listing, the reason why Rivian was invincible in the capital market, in addition to Tesla's pearl jade in the front, its own good fundamentals were the fundamental reasons that supported its pursuit. However, a few months have passed, and the previous advantage of Rivian is gradually losing, so its stock price will continue to decline, and even somewhat weaken.
As a new force deeply rooted in the US market, Rivian knows the love of American consumers, so it launched the R1S and electric pickup R1T that meet local needs. According to the data, suVs account for up to 50% of the US market, and pickup trucks account for 19%, of which pickup trucks sell about 2.93 million vehicles a year. Rivian's latest earnings report shows that the total number of electric pickup trucks R1T and electric SUV R1S in the United States and Canada has reached 71,000 units, up 15,000 units from the november disclosure. It is precisely because of the good market prospects and the large number of orders in hand that Rivian's stock price will reach new highs.
However, no matter how high the order volume, the delivery can only be done in a hurry. Earlier, Rivian announced that it had produced 1,015 vehicles by the end of 2021, with 920 deliveries, below its initial target of 1,200 vehicles. In fact, as early as the end of last year, Rivian said that due to supply chain problems, its final production will be hundreds less than the target. It can be said that with the advancement of time, this emerging car company is encountering a terrible "production capacity hell". Not only that, according to Rivian's introduction, its orders are supportive and can be refunded at any time, if Rivian does not solve the capacity crisis in time, consumers who do not have much loyalty to Rivian can wait for how long, which will be a big question mark.
In addition, Rivian, which has suffered a production capacity crisis, is facing a situation where opponents are pressing forward step by step. Although Rivian is not the first car company to launch an electric pickup truck, it is the first car company in the US market to deliver, but now this first-mover advantage is being lost. It is understood that HUMMER EV has been officially delivered before, and the Ford F-150 EV, which has received 150,000 orders, will be delivered in the spring of 2022, and with the delivery of these 2 blockbuster electric trucks, rivian R1T will face a white-hot fight.
It is worth mentioning that the reason why Rivian initially attracted capital pursuit was inseparable from the endorsement of ford and Amazon, of which Ford intended to use TheIvian skateboard chassis to build a car, and Amazon directly signed an order for 100,000 EDVs with Rivian. However, from the recent news, the two giants seem to have signs of drifting away from Rivian. As early as 2019, when it spent $500 million to invest in Rivian, Ford announced that it would build a car based on Rivian's skateboard chassis, but at the end of last year, Ford's new CEO Jim Farley told the media, "Ford has abandoned plans to jointly develop electric vehicles with Rivian and accelerated the process of independent electric vehicles." ”
In addition to being abandoned by Ford to build its own car, Rivian's order for 100,000 EDVs is also unstable. According to the information disclosed by Rivian in the prospectus, "if we fail to fully perform the EDV Agreement (the subscription agreement with Amazon), resulting in a smaller total purchase than we expected, or if either party terminates the EDV Agreement for any reason, our business, prospects, financial condition, results of operations and cash flow may be materially and adversely affected". This means that Amazon has the right to terminate the order at any time if the delivery of the EDV is not as expected.
In fact, with Rivian experiencing a capacity crisis, Amazon seems to be unable to wait for the delivery of EDV. Earlier, Amazon announced that it would purchase electric cargo cards from stellantis, a major automobile manufacturer, and cooperate in the development of in-vehicle software. Under the agreement, Amazon will be the first commercial customer of the Stellantis electric van Ram ProMaster. Apparently, Stellantis also wants a piece of Amazon's electric truck business. Although Amazon told the media afterwards, "We are still excited about the partnership with Rivian, which will not change our investment, cooperation, order size and timing", but if Rivian does not solve the capacity problem quickly, it is likely to lose Amazon, the biggest financier. The roof leaked during the overnight rain, and Rivain, which suffered from a production capacity crisis and abandoned by investors, was also unstable inside. Earlier, Rod Copes, chief operating officer who has been with Rivian since March 2020, announced his departure. In The Rivian statement, Ruder Finn began gradually retiring from Rivian a few months ago, and his responsibilities have been taken over by the Rivian leadership team. Although in the statement, Rivian COO Rod Cops is planning to retire, as the previous head of Rivian production capacity, It is difficult for Rod Cops to announce his departure at this time. Under multiple negative influences, Rivian's stock price once fell by 5% after Rod Cops' departure.
In a short period of time, if Rivian cannot solve the capacity problem in time, then Rivian, who has no way to achieve positive profitability, will endure a long period of stock price downturn like Tesla that year. Now all the pressure has come to The founder of Rivian, Dr. RJ Scaringe, when "Silicon Valley Iron Man" Musk personally stationed in the factory, it took more than 1 year to solve part of Tesla's production capacity problem, so how will RJ Scaringe escape the "capacity hell" and become a real "Tesla killer"?
How much color remains of the Tesla Killer?
Rivian has indeed suffered a lot of crises in recent times, but its difficulties are not the same as Tesla's bankruptcy, so even if Rivian's stock price fell by two-thirds in just two months, Mizuho Americas continued to give Rivian a buy rating in the investment research report, setting the target stock price at $145. In the Mizuho Research Report, it clearly stated that with the expansion of the European market and the increase of production capacity, Rivian can continue to promote the global expansion strategy, occupying a favorable position in the long-term layout of the EV industry.
In fact, the Rivian fundamentals, which have suffered consecutive setbacks, have not fundamentally changed. As the seventh-largest IPO in U.S. history, Rivian, backed by the giants of Amazon and Ford, has raised $10.5 billion in seven funding rounds since 2019, compared with $5.2 billion in cash and cash equivalents at the end of the third quarter. Given the proceeds of Rivian's initial public offering (IPO) and the value of its senior secured bonds, Rivian has about $19.9 billion in cash available to it. It can be said that although the losses of the expanding Rivian are still expanding, the Rivian, which has a huge cash flow, has not broken the wealth in a short period of time. This is obviously different from musk's continuous search for financing and the solution of production capacity problems.
In addition, the reason why Rivian has been highly sought after as soon as it is listed is not unrelated to the fact that it holds the "core weapon" is the skateboard chassis. Although the skateboard chassis is not original to Rivian, it has flourished in its hands. As a new car-making technology, the skateboard chassis can be standardized and platformized because of the chassis module, which can enable the production of different models on the same platform, with multiple advantages of low development cost, short cycle and high interoperability.
Not only that, because it can be decoupled like a non-load-bearing body, Rivian can realize modular dismantling of traditional car-making steps through skateboard chassis technology, and develop tops and bottoms separately, which means that once the capacity problem is solved, Rivian can quickly develop more products to launch on the market.
It is worth mentioning that as a new power car company, Rivian also has a brilliant performance in intelligent driving technology. Previously, Rivian independently developed a set of L2 level automatic driving functions called Driver+, with the assistance of multiple radar sensors and cameras, with automatic emergency braking, lane keeping assistance, highway assist (combination of lateral and vertical control) and parking assistance and other functions, and the current mainstream automatic driving assist technology is not significantly different.
Also, although the HUMMER EV and ford F-150 EV have begun to enter the delivery state, but Rivian's biggest rival Tesla Cyberruck is still delaying deliveries, the latest delivery time is at least until 2023, so in the next year, if Rivian can solve the capacity problem, the stock price back to the high point is not a fantasy.
Summary: Although Rivian has been experiencing crises in recent times, it is still the most growing new car company in the US market after Tesla. And most importantly, Rivian, who has a lot of cash flow, has no bankruptcy in a short period of time, and even As long as Rivian with good fundamentals solves the production capacity crisis, there is still a great chance to catch up with Tesla again. As for when Rivian can get out of the "capacity hell", I believe That Rivian will not make us wait long. After all, what Rivian lacks most is time.