Shares of Rivian Automotive, an electric vehicle start-up that went public through a blockbuster IPO last month, plummeted to a new low Friday morning after the company cut its 2021 vehicle production target.
Rivian said after the markets closed Thursday that it expected to fall “a few hundred vehicles short” of this year’s production target of 1,200 vehicles. The company said it faced supply chain issues as well as challenges ramping up production of the complex batteries that power the vehicles.
“Ramping up a production system like this, as I said before, is a really complex orchestra,” Rivian CEO R.J. Scaringe said. “We’re ramping largely as expected; the battery constraint is really an artifact of just brining up a highly automated line, and, as I said, it doesn’t present any long-term challenges for us.”
Shares of Rivian were down 15% early Friday morning to below $93 a share — a new low since they began trading on Nov. 10. Friday also marked the first time the company’s stock opened below $100 a share.
The steep decline occurred despite Wall Street analysts’ warnings that there would undoubtedly be some production bumps in the road for the EV start-up. Overall, analysts played down the production cut, echoing the company’s view that it will have little or no impact on Rivian’s long-term valuation.
“I don’t personally think it’s that big of a deal,” Wells Fargo analyst Colin Langan said Friday during CNBC’s ‘Squawk on the Street.‘ “It’s a disappointing start, but it’s pretty small.”
On the plus side, Rivian said total reservations for the electric R1T pickup and R1S SUV increased to 71,000 as of Dec. 15, up 28% compared with the most recent tally of 55,400 vehicles in November. That’s a higher rate than what the company expected.
The updates came alongside Rivian’s first quarterly report as a public company and confirmation of plans for a new $5 billion plant in Georgia that’s expected to begin production in 2024.
Rivian’s third-quarter results fell in-line with Wall Street revenue expectations and with estimates the company previously released as part of its IPO.
For the third quarter, Rivian reported an operational loss of $776 million and a net loss of $1.23 billion. The company had previously predicted an operational loss between $745 million and $795 million and a net loss between $1.21 billion and $1.28 billion.
— CNBC’s Michael Bloom contributed to this report.