Wall Street Journal By Sean McLain 10/2/2023
The EV maker has struggled to keep production up and costs down Rivian Automotive set out to build the ultimate electric vehicle for American consumers—a pickup truck with sports-car handling and a dizzying array of features.
Engineers gave the truck a beefy underlying metal frame for higher crash-test ratings and one of the most complicated suspension systems on the market for a smoother ride on- and off-road. It can go from zero to 60 miles an hour in 3 seconds. Rivian added pop-out flashlights stored away in the doors and a portable Bluetooth speaker.
All that comes at a cost. Rivian vehicles sell for over $80,000 on average. Yet they’re so expensive to build that in the second quarter the company lost $33,000 on every one it sold. That’s roughly the starting price of a base model Ford F-150.
When Rivian launched onto the electric-vehicle scene, industry watchers expected it to beat rivals to market and become the “Tesla of trucks.” Investors piled into its splashy market debut in 2021, when it raised nearly $12 billion in cash and became the U.S.’s largest IPO in years. For a short while, Rivian was worth more than Ford Motor and General Motors.
In two years, Rivian has blown through half of its $18 billion cash pile, in part because it struggled to master the nuts and bolts of manufacturing. While production is now growing and losses have narrowed, Rivian still loses money on its vehicle sales. In an industry known for narrow margins and tough competition, Rivian pays too much for parts and produces too few vehicles to cover its costs.
The company currently sells three models: the R1T pickup truck, the R1S SUV and an electric delivery van for Amazon.com
Rivian’s truck and its SUV, which share many parts, accounted for 83% of its August sales, according to Motor Intelligence data.
As of the end of September, Rivian had only built a total of around 65,000 vehicles, a fraction of what other car companies manufacture at a single U.S. factory in a year. Even with output increasing, Rivian’s factory in Normal, Ill., is operating at less than one-third of its build capacity. It aims to produce 52,000 vehicles this year.
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https://www.wsj.com/business/autos/rivian-ev-truck-electric-vehicle-8e8dc124?mod=djemalertNEWS
