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: Rivian stock tanks after EV maker sees production constraints hindering sales

Rivian Automotive Inc. stock tanked late Thursday as the electric-vehicle maker posted its first financial snapshot as a public company, reporting mounting losses and facing headwinds from supply-chain snags and a tight labor market.

Rivian RIVN, -5.33% said it lost $1.2 billion, or $12.21 a share, in the third quarter, compared with a loss of $288 million, or $2.88 a share, in the year-ago quarter, on higher operating losses, the company said.

Rivian said it lost an adjusted $766 million in the quarter. Its letter to shareholders did not specify a per-share amount. Sales hit $1 million as it delivered its first few vehicles in September.

Analysts polled by FactSet expected the company to report a GAAP loss of $12.04 a share on sales of $900,000.

The stock fell more than 10% in the extended session Thursday after ending the regular trading day down 5.3%. The losses, initially mild following results, intensified as Rivian executives detailed production headwinds hindering the EV maker’s deliveries amid indications of rising demand.

“We are at a steep part of our climb, but I couldn’t be more grateful,” Chief Executive RJ Scaringe said in a call with analysts after the results. Demand is not a problem, he said. Thanks to production constraints, however, an order for one of its EVs placed today will most likely be fulfilled in 2023, Scaringe said.

The company said it had more than 71,000 preorders for its electric pickup truck, the R1, as of Dec. 15, from about 48,000 preorders in late September.

“Watching and ramping production of three different vehicles within a few months is an incredibly tough challenge,” exacerbated by ongoing global supply snags and a tight labor market, he said.

Rivian is producing electric last-mile delivery vans for backer Amazon.com Inc. AMZN, -2.56% and electric SUVs and pickup trucks that are marketed for outdoors pursuits.

Rivian will be “a couple 100 vehicles short” of its goal of producing 1,200 vehicles this year. “The good news is that we do not believe any of our supply-chain challenges are long term,” Scaringe said. “They are solvable problems.”

Rivian also announced Thursday it has chosen Georgia as the site second U.S. factory, with construction slated to start in the summer and production to start in 2024. The facility in Morgan and Walton counties is expected to employ more than 7,500 people at peak production, the EV maker said.

Rivian said its total operating expenses for the third quarter grew 141% to $694 million, with research and development expenses rising to $441 million, from $220 million a year ago. Selling, general, and administrative expenses rose to $253 million, from $68 million a year ago, as the company built up its corporate, sales, and customer-service operations, it said.

Rivian went public with a bang in November, pricing its upsized initial public offering, the largest of the year and seventh largest in the U.S. in nearly 30 years, well above its expected range. The company raised nearly $12 billion.

The first Wall Street takes on the company were mostly positive, and of the 15 analysts covering Rivian polled by FactSet, nine have buy ratings and six have hold ratings.

See also: More electric pickup trucks are coming to market. The question now is who will buy them?

Rivian shares are down more than 6% so far this month, contrasting with gains of more than 4% for the S&P 500 index. SPX, -0.87%

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