【Earnings Preview】：Could Rivian Achieve Mass-Poduce as Planned?
$Rivian Automotive, Inc.(RIVN)$ will announce 2021Q4 financial report after the market on March 10th (Thursday).
As Rivian's large-scale delivery plan starts in 2022, the focus of 2021Q4 financial report may be more on the update of automobile orders and the delivery guidelines this year.
Bloomberg predicted that Rivian revenue for Q4 was $63.96 million, adjusted net profit was-1. 445 billion, and adjusted earnings per share was about-1. 875 dollars.
Rivian's share price fell 25% last week, casting a shadow over the earnings report. Rivian and other electric vehicles are being sold off by the market because of the Russian-Ukrainian war and the start of interest rate hikes, and investors are switching from high-valued growth stocks to defensive value stocks.
The latest financial report of Lucid, the main competitor, emphasizes the supply chain and logistics problems in 2022, and investors are worried that Rivain may face the same dilemma.
In addition, affected by inflation, parts price increase, chip shortage and supply chain restriction, Rivian announced that the price of its R1T pure electric pickup truck will increase by 17%, and the price of its R1S electric SUV will increase by 20%, and customers who have purchased in advance will also make up the price.
This move caused dissatisfaction among customers. After strong opposition from customers, Rivian quickly cancelled the previously announced price increase plan and said that from March 1, all orders will be carried out at the original price.
The retrospective price increase reflects Rivian's helplessness, that is, to achieve the mass production target and the bicycle manufacturing cost much higher than expected. Even Musk once again secretly ridiculed Rivian's "their negative gross margin will be staggering", saying that despite Tesla's scale and technological advantages, it is difficult to build cheap electric pickup trucks.
On March 1st, Wells Fargo lowered the target price of Rivian from US $110 to US $70. The reason is that although they are optimistic about Rivian's products and brand strategy, the company has faced many unfavorable factors recently, including rising interest rates, intensified competition for electric vehicles, the end of IPO stock lock-up period in May, and the expected decline in delivery in the first quarter.
In 2021, the company produced only 1,015 cars. At present, the consensus is that Rivian will deliver 4,000 vehicles in the first quarter of this year. However, because the production line was updated in the first ten days of January, Rivian stopped production for 10 days, and it is estimated that the whole vehicle sales in the first quarter will only be about 2,000 vehicles.
Some analysts predict that pure electric vehicle manufacturers such as Rivian and Lucid may consume $21 billion in cash before the end of 2023, and there is a risk of liquidity depletion. In the next 1-2 years, Rivain needs to raise an additional $4-5 billion against the background of rising interest rates and possible slowdown in economic growth, which undoubtedly increases the risk.
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
Hopefully