Rivian Sticks With Year-End Guidance as Quarterly Loss Widens

The company’s net loss nearly quadrupled to $1.6 billion for the January-to-March period, compared with $414 million in the prior-year quarter, as the company continued to spend heavily on R&D and increased manufacturing of its first vehicles. Rivian said higher logistics costs also weighed on results, due in part to higher spending on expedited shipping as a workaround to supply-chain disruptions.

The company manufactured 2,553 vehicles and delivered 1,227 of them to customers during the three-month period.

The quarterly report follows a multiweek slide in Rivian’s stock price, which hit an all-time low this week and is trading at nearly a quarter of its initial offering price of $78 a share.

Following the results, Rivian shares rose 3.8% in after-hours trading. Before that, the stock fell 9.6% during the regular session, closing at $20.60 a share.

The Irvine, Calif.-based auto manufacturer, led by Chief Executive Officer RJ Scaringe, was among a handful of EV-focused startups that went public last year with highflying valuations, tapping Wall Street’s zeal for the auto industry’s transition to electrics. But this year has proved challenging for the young company, which has struggled to increase production of its first two models, the R1T pickup and R1S sport-utility vehicle. Both went on sale last fall.

Like other auto makers, Rivian is confronting rising raw material costs, particularly on ingredients needed to manufacture batteries, and troubles securing enough semiconductors and other parts to fully run the assembly line.

Rivian in March cut its 2022 production forecast to 25,000 vehicles, citing supply-chain and logistical difficulties. The company said it otherwise would have produced 50,000 trucks and SUVs. 

Rivian reported an adjusted loss of $1.43 a share for the first quarter, compared with analysts’ expectations of a loss of $1.37 a share.

The obstacles facing the broader global auto industry are falling hard on startups like Rivian, which have yet to build the type of clout with suppliers that some of their well-established competitors have amassed over decades, executives and analysts say. The car company this spring increased prices on vehicle orders placed after March 1, reflecting the toll that higher commodities costs are taking on its business.

Rivian’s shares have been in sharp decline since its blockbuster IPO in November, a listing that at the time was among the largest U.S. debuts since 2014. At one point shortly afterward, Rivian’s valuation climbed to more than $160 billion, surpassing the market cap of that at both

General Motors Co.

and

Ford Motor Co.

F -3.90%

The stock sank to an all-time low Monday, after reports that Ford—an early investor in Rivian—sold about 8% of its stockholdings, following the expiration of a post-IPO lockup period. Ford has since confirmed the stock sale in a regulatory filing.

Shares continued to slide this week ahead of the quarterly report and are down more than 80% from the start of the year. As of Wednesday’s close, Rivian’s market value stood at $17.9 billion, according to FactSet.

The company’s tumbling share price has weighed on earnings for both Ford, which held about 102 million shares before the recent sale, and

Amazon.com Inc.,

AMZN -3.20%

another early investor, with a roughly 18% stake in Rivian. Both Ford and Amazon swung to a loss in the first quarter as a result of declines in the market value of their Rivian holdings.

The stock declines also reflect a wider cooling on Wall Street for auto startups that had burst onto the scene last year with big promises and little-to-no revenue.

Rival electric-vehicle startup

Lucid Group Inc.,

which makes luxury sedans that compete directly with

Tesla Inc.,

has also cut production forecasts and raised prices in recent months.

Rivian executives have highlighted that demand is there for its models, citing 83,000 reservations as of the end of March and a 100,000-vehicle order from Amazon for electric vans. They have also expressed confidence in their manufacturing capabilities, saying they are working with suppliers to ease bottlenecks.

At the end of the first quarter, Rivian had $17 billion in cash and liquidity, a sizable pile for an electric-vehicle startup. About $12 billion was raised through its IPO.

In addition to its factory in Normal, Ill., Rivian has committed to spending $5 billion to build a new factory in Georgia, which would produce a more-affordable EV called the R2. Production is expected to start in 2024, and the company said it believed it could accomplish this goal with its current cash.

The company’s supply-chain challenges don’t stop with electronics. Mr. Scaringe also has warned of a looming battery shortage, which would limit the auto industry’s ability to hit their EV sales targets over the next decade.

Write to Sean McLain at [email protected]