EV maker Rivian faces output, cost crunch in earnings report

Public sightings of Rivian's R1T pickup remain rare, even in California, where the electric vehicle startup is based.

But there's increasing photographic evidence of the handsome truck on social media, cruising down the highway or juicing up at a public charger.

Captions often include the phrase "spotted in the wild," along with exclamation points and excited emojis. The public joy sparked by the R1T's presence, however, contrasts with Rivian's struggles to ramp up production of the pickup along with the R1S SUV, which shares the platform.

The scarcity of the Rivian vehicles, nearly six months after launch, is one of several issues the young automaker is likely to address in its fourth-quarter earnings report after the market closes Thursday.

Like the rest of the industry, Rivian faces parts shortages and rising costs, but also a mood of distrust from early adopters who have pushed back on steep price hikes.

This week, Rivian CEO RJ Scaringe predicted that the auto industry as a whole will continue to suffer from supplier bottlenecks, particularly from a shortage of computer chips needed to operate basic vehicle functions.

"I think we're going to see semiconductor shortages for the next 12 months," Scaringe said at the CERAWeek conference in Houston on Tuesday, according to Reuters.

Last week, Scaringe had lamented rising material costs on everything from sheet metal to seats in a letter to customers justifying price increases for the R1T and R1S. And that was before the jump in commodity prices this week caused by fresh economic sanctions against Russia.

Rivian shares fell 6.3 percent to close at $41.16 on Thursday. As of Wednesday, the stock was lower by 44 percent compared with its Nov. 9 initial public offering at $78 per share, and lower by 74 percent compared with its record high close of $172.01 on Nov. 16.

Rivian said in December that it had 71,000 customer preorders for the R1T and R1S. Separately, the company is making delivery vans for Amazon, a financial backer.

The automaker said it delivered 920 consumer vehicles last year, mostly the R1T. That leaves a massive order backlog for Rivian's plant in Illinois, even as the company moves forward with a second factory location in Georgia. Updated production numbers are expected Thursday.

At the beginning of this month, Rivian attempted to implement price hikes starting at $12,000, or about 20 percent, on new orders and existing reservations for the R1T and R1S in response to soaring costs.

Scaringe later backtracked on those price increases for orders placed before March 1, in response to widespread outrage by early adopters.

"The uproar from current Rivian preorder holders was definitely warranted," said Robby DeGraff, industry analyst at AutoPacific. "They've been generously patient waiting for their R1Ts and R1Ss to finally roll off the assembly line after what — to them — has probably felt like an eternity."

Rivian also announced new vehicle trims with less equipment last week in order to keep the base price for new orders at around $70,000. Those models, with fewer electric motors and smaller battery packs, won't be delivered until 2024, the company said.

Although canceling the price increases for existing preorders was applauded by early adopters, it will also leave Rivian with significantly less revenue — perhaps worth hundreds of millions of dollars.

Reuters said in an earnings preview that the current analyst rating on Rivian shares is "buy," with 12 analysts positive on the stock price and four recommending shares be held or sold. The median 12-month price target among Wall Street analysts is $130 a share, Reuters said.