Electric vehicle (EV) company Rivian — which had a blockbuster IPO in November but has since been struggling with supply chain issues and chip shortages — recently had its first annual shareholder meeting as a public company on June 6. Concurrently, the company also released a letter to shareholders, a letter in which it said that the $17 billion in cash on its balance sheet will support the 2025 launch and ramp of its R2 platform.
While acknowledging that “the journey ahead won’t be easy,” CEO RJ Scaringe said in the June 6 letter that the company continued “to grow demand with a backlog of over 90,000 R1 preorders and Amazon’s initial order of 100,000 EDVs [electric delivery vehicles].”
“Our strong partnership with Amazon and its initial order of 100,000 vehicles enables us to work with one of the most sophisticated fleets in the world,” he added.
Scaringe said that Rivian’s production plant in Normal, Illinois, has 150,000 units of annual capacity, and that “we will continue to ramp our supply chain and production to fully utilize this capacity.” “Scaling vehicle production is non-trivial as each unit represents a complicated symphony of component supply,” the letter reads.
Barron’s reports that while the company plans to ship 25,000 units in 2022 and has capacity for 150,000 units, Wall Street doesn’t predict sales will rise north of 100,000 units until 2024.
Shares of Rivian were down 2.4% on the morning of June 7 and are down 72.4% year-to-date.
Just like its EV rivals, Rivian has been struggling with supply chain and battery issues, an area where the company anticipates seeing the most change in the coming decade, “with the need for battery production capacity in the world to expand by more than 20 times during this time,” according to the letter.
Rivian said that it aims to build partnerships with cell providers and “upstream pre-cursor material suppliers” that will complement its initiatives.
More From GOBankingRates