electric vehicle maker Rivian (countryside) will announce fourth-quarter and full-year 2021 results late Thursday, amid production problems and failed price hikes that have worried customers. Rivian stock rose on Tuesday.
Rivian raised the prices of its cars by up to 20% last week. CEO RJ Scaringe blamed high component costs. Meanwhile, production surged intermittently, as the Rivian’s Normal, Ill. plant was closed. For a week in early January.
AppreciationZacks Investment Research analysts expect Rivian to trim its fourth-quarter loss to $1.58 per share, with sales of $50.38 million.
Rivian reported little profit in the third quarter, but it posted huge losses. Sales came in at about $1 million, and losses of $12.21 per share. Those results were in line with what the company said it expected in an earlier filing with the Securities and Exchange Commission.
It is not unusual for a start-up to have little in the way of revenue and significant losses initially, spending heavily on ramping up and adjusting production. Rivian says she does not expect to be profitable for the foreseeable future.
consequences: Check back Thursday after closing.
Shares rose 3.2 percent to 43.82 points above stock market today After falling 10.5% on Monday. Rivian stock is trading at a much lower price than the IPO price.
Electric vehicle stocks have been hit hard in recent weeks amid the market’s rotation away from growth stocks. The Russian war in Ukraine added more pressure overall.
Among the old automakers with a growing list of electric cars, general motors (GM) rose 0.8% and stronghold (F) decreased by 0.7%. Stilants (STLA), which signed a deal on January 5 to make electric delivery trucks for Rivian’s biggest customer Amazon (AMZN), rose 3.2%.
Rivian . price hike
Last week, Rivian revealed that its R1T electric truck will cost about 17% more than previously expected. That would increase the base cost to about $78,975 from $67,500. The price of the R1S SUV will jump by about 20%, bringing the new base price to about $84,000 from $70,000. All prices are before the $7,500 federal tax credits.
Previous price points will apply to the twin-engine versions of the R1T and R1S, which are expected to be available starting in 2024.
The new rates were originally applied to new and existing reservations, angering customers with reservations who threatened to cancel their pre-orders.
As a result, on March 3, Rivian reversed its decision to apply price increases to existing orders. In a note to Rivian pre-order owners, Scaringe said the company “erroneously assumed that the advertised standard, dual-motor battery pack would offer configurations that would offer similar price points to your original configuration.”
“While that was common sense, it was wrong and we broke your trust in Rivian,” he added. Scaringe has apologized and offered to not only honor pre-orders at the original price but also help those who canceled return their pre-order in original configuration, pricing and delivery time.
RIVN stock fell 25% in the two days following the announcement of the price hike.
Rivian stocks: problems of increasing production
Scaringe said at the Wolfe Research conference on February 24 that ramping up production at a regular plant in Rivian is “definitely making progress,” but supply chain problems are still slowing production.
Scaringi said the global shortage of semiconductor chips was the “most painful” obstacle to increasing production.
The company said on December 16 that it expects to be “a few hundred vehicles less than our 2021 production target of 1,200”. On January 10, Rivian reported that it had sold 1,015 vehicles by the end of 2021 and delivered 920.
Rivian said it has about 71,000 pre-orders for its R1T Pickup truck and R1S SUV in North America as of December 15. Pre-orders require a refundable $1,000 deposit.
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