Rivian Automotive
It is currently trading around 80 percent lower than the peak price since it was listed on the Nasdaq exchange. Remember that Rivian was listed on Nasdaq in November 2021 when you were fortunate not to make money from trading on the market, specifically for a company operating within the realm of electric vehicles. In a symbol of the exuberant (and past?) period, in the first days of being listed, investors’ enthusiasm was pushing RIVN up 115%, up to US one hundred dollars per share. The market power of RIVN has waned over the next five months and may benefit well with some recharging.
The Rivian price is currently close to reaching the all-time low of US $37.00, approximately 80percent lower than the all-time high. In contrast, Tesla.
TSLA +3.88%
The company, which Rivian investors are hoping to copy, is trading 25 less than its all-time record (US $1,200 versus the US $900) and is reached during the month of November in 2021 (roughly the exact time Rivian made its all-time high).
As demonstrated by its recent earnings conference call, Rivian has a momentous opportunity to grow.
The full-year 2021 results conference and press release 10 March 2022. Rivian announced its first round of revenue. It was US $55 million versus the cost of revenue in the range of US $520 million as well as other operational expenses (mainly R&D and administration) of US $3.7 billion. Therefore, Rivian reported a total net loss (inclusive of all expenses) in the amount of US $4.7 billion in the entire year.
The huge gap between its revenue and expenses is a normal element of its growing difficulties. The enormous barrier in the automobile industry to entry means that Rivian expects to make net losses for some time. However, it is expected to be profitable at the end of the current fiscal year, and this could be the more significant thing to investors who are following the company.
No solution for fast-charging
Rivian is valued at more than US $30 billion and is far from being a failure. But, it could take a few years for the company to raise its stock back up from its IPO cost, which was US $78.00. In spite of enormous valuations for EV businesses and some investor excitement in the market, investors’ trust is being tested by challenges like the notorious chip shortage that has affected a variety of car manufacturers and the tightening of monetary policy by the US Federal Reserve.
To speed up the process and get over some of these hurdles in its path towards the IPO cost, Rivian may have made more utilization of the US $1.8 billion cash reserve and made more than its 10% share of the electric vehicle market in 2030.
According to Rivian’s capacity, theoretically, its two facilities (600K) could account for 10 percent of the 2021 electronic vehicle industry. In 2030 electric vehicle sales are expected to represent 1-in-2 of all vehicles sold, up from the present 1-in-10. In order to account for 10 percent of the total number of EVs that are sold by 2030, Rivian must increase production capacity by around 3 million vehicles annually.
For the purpose of interest, Rivian generated its 2021 revenues in the amount of US $55 million based on the delivery of 2500 vehicles powered by electric power. The company’s forecast for 2022 anticipates 25K vehicles which is an enormous improvement over the current production figures; however, it is a huge distance from the number of pre-orders in its inventory (83K) and far from its target of 10% of 3 million.