- Rivian’s earnings this week didn’t meet analysts’ expectations.
- The EV startup plans to make fewer cars this year than many anticipate.
- Rivian runs the risk of alienating customers who have been waiting years for their vehicles.
Rivian faces a challenge to win back some of its early supporters as the growing electric-vehicle maker struggles with building enough cars to meet demand.
The startup, which already missed production targets in 2022, provided a lower manufacturing target for 2023 than analysts expected at 50,000 pickup trucks, SUVs and delivery vans.
As Rivian continues to struggle with mass production, its communication with customers who have been waiting years for their vehicles leaves some feeling jittery by the company.
Parker Elmore placed its order for the R1S SUV more than two years ago. They’ve hedged their bets on Rivian with orders for the Tesla Cybertruck and the electric RAM 1500.
“I’d be lying if I said there wasn’t some trepidation: Is this company going to make it?” Elmore told Insider. “You place all orders because you don’t know exactly who will win or deliver.”
Insider has spoken to or corresponded with about a dozen order holders in recent months. Some feel embarrassed by their initial endorsement of Rivian while their wait times stretch to nearly half a decade. Some wait-and-see customers and shareholders have compared Rivian’s struggle to reach mass production to that of Tesla, which entered 2018 without alienating its most staunch supporters and emerging as the most valuable automaker in the world. hell” managed to glitch through.
Rivian previously said that delivery times are “based on a number of factors, including delivery location, configuration, and original preorder or reservation date.” A spokesperson also said that customers experiencing delays have been connected to customer service.
Shareholders and analysts said that for a young company like Rivian, which doesn’t have much left over on marketing costs, these early fans can make or break your reputation.
“The auto industry is notorious for having customers who have intense brand loyalty,” Garrett Nelson, automotive analyst at CFRA Research, told Insider. “For a newcomer like Rivian, it’s a huge challenge to break into when you don’t have a brand, and you’re just starting to establish that relationship and trust with customers.”
This breach in trust between Rivian and some of its early order holders is coming at the worst possible time for the company, Nelson said, as Wall Street was disappointed not only by a modest production target for the year, but also by a lack of transparency. . Where is the company’s pre-order list.
“We’re starting to see how difficult some of these speed bumps are for companies like Rivian,” he said. “We’ve seen some really disappointing results from Rivian and Lucid as they ramp up their production at a much slower rate than a lot of investors and customers expect.”
Rivian posted mixed Q4 results
Rivian reported mixed results for the fourth quarter on Tuesday, with a loss per share less than analysts expected, but revenue falling short of estimates. Investors and customers are concerned about the EV startup’s ability to deliver on its ambitious promises.
Rivian narrowly missed its production targets in 2022, having built 24,337 cars and delivered 20,332. Meanwhile, delivery has lagged, but not to the extent of fellow startup Lucid. About 84% of Rivian’s vehicles made it to customers last year.
Rivian plans to make 50,000 vehicles in 2023, though some analysts expect at least 60,000. With $11.6 billion the company has the most cash on hand compared to other EV startups, but even with some good news, investors are running out of patience.
Shares are down nearly 83% in 2022 and fell a further 17% in Wednesday trading after the news.
Wedbush analyst Dan Ives said in a note after the earnings results that it’s disappointing that “Rivian remains in this cobweb of production with concerns that customers will start churning out to competitors.”
While some order-holders like Elmore remain cautiously optimistic, others who have taken delivery of their Rivians appear pleased with the vehicles.
Earlier this week, Rivian took the top spot in JD Power’s EV ownership study. And David Divinov, founder of a New Jersey-based trucking company, received his R1S last month after placing his order in October 2019. Dvinov said he was glad he waited longer than 3 years.
Rivian’s challenge lies in delay
Rivian didn’t report its pre-order numbers in its latest quarterly report. As of 7 November the company had 114,000 net pre-orders. (In its earnings call, Lucid also announced plans to stop reporting its reservation numbers.)
Rivian plans to launch its first pickups and SUVs, 100,000 delivery trucks for Amazon, a charging business, and even a potential foray into the electric bike space, amid a challenging macro environment and supply chain constraints.
This long list of priorities is frustrating for order holders who have been waiting for their Rivian to arrive since 2019.
Progress on both Rivian’s production and distribution was slower from Q3 to the final quarter of the year than in Q2; Rivian blamed supplier shortages for losing several days of production in Q4.
In an email to the company announcing its second round of layoffs in seven months, CEO RJ Scaring also stressed the need to stay focused.
This is significant because Rivian has not only delayed thousands of customers receiving its flagship products, but it also had to push the launch of its smaller, more-affordable, next-gen R2 platform to 2026.
Are you a current or former Rivian employee, Rivian vehicle owner, or Rivian order holder? Contact these reporters at email@example.com and firstname.lastname@example.org.