Rivian, the popular electric vehicle company backed by Ford and Amazon, reported a net loss of $1.71 billion in the second quarter of 2022 based on $364 million in revenue. This shows that Rivian’s nascent electric vehicle business is accelerating, although compared to the previous quarter, Rivian reported a net loss of $1.59 billion on revenue of $95 million. Still, the company’s revenue beat Wall Street expectations by about $26 million.
The earnings report also shows that Rivian has a long way to go before it delivers on its promise to disrupt the auto industry with beautifully designed, zero-emission, adventure-themed trucks and SUVs. The automaker said it expects to burn through $700 million in additional cash by the end of the year.
The earnings report follows a positive production update in which Rivian said it produced 4,401 vehicles during the three-month period, up 72% from the previous quarter, and delivered 4,467 vehicles , an increase of 267%. The company did not provide a breakdown between the R1T truck and the electric delivery vehicle (EDV) built for Amazon. (Delivery of the R1S SUV has been delayed until later this year.)
The company still needs to produce 18,046 vehicles over the next eight months if the 25,000 target is to be built this year , or about 9,023 vehicles per quarter. It’s going to be no small task, but it’s certainly within the realm of possibility. On its last earnings call, Rivian said it had more than 90,000 reservations for its R1T and R1S vehicles. Now, the automaker reports that its pre-orders have risen to about 98,000.
Still, the company had to weather some rough waves to get here. Last month, Rivian laid off about 6 percent of its 14,000 employees, or about 800 people, citing the need to cut costs to speed up development of future versions of its electric trucks and SUVs.
Ahead of the earnings report, Wedbush’s Dan Ives said Rivian was showing some signs of improvement. After experiencing “significant issues,” Rivian “is beginning to find its backbone,” Ives wrote in a report, adding that the company has the potential to “become a major EV backbone over the next decade.” Power.”
But recent price hikes and news that a revised EV tax credit will change the EV buyer landscape has Rivian scrambling to make respond. Under a new climate bill proposed by Senate Democrats, pricier electric vehicles — new cars, pickups and sedans priced over $55,000 for SUVs — will not be eligible for a $7,500 tax credit.
Some configurations of Rivian’s electric trucks and SUVs will almost certainly be too expensive to get credit, which could dampen demand. Rivian also raised prices on two of its models by 20%, sending its shares tumbling and forcing a public apology from CEO RJ Scaringe.
In response, the company emailed customers and posted a supportive response on its website, advising them to sign a ” Binding Contract” to lock in their $7,500 tax credit. But it also admitted it could not “guarantee eligibility” for incentives.
Rivian reports that it has $15.5 billion in cash on hand. That would be very helpful for automakers if they expect bigger losses this year.