Rivian Gets Hammered Again

Rivian Automotive Inc. (NASDAQ: RIVN) posted good quarterly results. However, they were a reminder of how far behind Tesla and legacy car makers its sales are. And it also reminded investors that Rivian cannot catch up. (These are the 13 biggest electric vehicle business failures in American history.)

Rivian’s shares dropped almost 10% right after it announced earnings. That brought it to just below $23. Due to some recent recovery, Rivian’s stock is up 19% year to date, about the same as the market. Tesla’s shares are 102% higher. Even GM’s stock is 8% higher.

Rivian said it will build 52,000 trucks this year. It delivered just over 12,000 in the quarter.

Tesla’s total production for the second quarter was 480,000. Granted, these were not pickups. However, its Cybertruck will be on the market this year. Tesla says it has years of backorders. Some of these will go away. Nevertheless, Tesla’s brand will bring a huge bulge of buyers.

The most formidable competitor, the Ford F-150 Lighting, has been available for a year. Every major pickup manufacturer will have EV versions of its products in the market in 2024. That is an avalanche of competition. There is no room for all of them.

Rivian had revenue of $1.1 billion, up from $364 million in the same period a year ago. It lost $1.3 billion, compared to $1.7 billion a year ago. Management boasted Rivian had $11.6 billion in cash and cash equivalents. This means it can go along with losses of $4 billion for over two years. Cash does not matter if the company cannot compete effectively in a crowded market dominated by large companies. And Rivian cannot.

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Fast forward those two years. Ford could easily be selling hundreds of thousands of Ford F-150 Lightings. Pickup champions Silverado and Ram could be doing the same. Tesla undoubtedly is competing directly against them in sales.

Rivian’s shares are falling because its prospects to compete effectively are tiny.

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