Rivian, the electric car maker invested in by giants such as Amazon and Ford, reported a loss of $1.7 billion last quarter and expects a loss of $5.45 billion for the full year. In three months, the company produced only 4,000 cars, despite 98,000 orders.

Rivian has been dubbed by many as “the next Tesla,” the idea being that it could be a fast-growing manufacturer that would change the face of the automotive industry by selling large volumes of electric SUVs and trucks. However, starting mass production is not easy at all.

Rivian has a huge electric vehicle order from Amazon, 100,000 units that it must deliver by 2030.

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But Rivian suffered heavy losses due to higher raw material costs, shipping and supply chain issues.

Rivian makes the cars in a town called Normal in the US state of Illinois, but the big problem is that the company has produced just over 4,000 electric cars in three months and is forecasting 25,000 for the full year. By comparison, Tesla will produce more than one million cars and Dacia more than 250,000 in Mioven.

One of the problems for smaller, newer companies like Rivian is that they don’t order as much as Ford or GM, and so can’t have preferential contracts with many suppliers.

Immediately after going public in the fall of 2021, Rivian’s market value briefly topped $150 billion, only to continue falling to a low of $18 billion in May. Now the capitalization is about 35 billion dollars.

Rivian is struggling and has announced it will lay off more than 600 of its 11,500 employees as it needs to cut costs quickly. Another blow is related to the subsidy in the US for buyers of electric cars in the amount of $7,500. Soon a law will be passed that the subsidy will no longer be given to those who buy electric SUVs, vans and minibuses worth more than $80 thousand.

Sources: New York Times, WSJ

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