Elain Brown Tech 03.10.2022 23:Mar PM EST

Rivian Stock Drops: Supply Chain Issues Hinder More EV Production

Rivian stock experienced a significant stock dip. The plunge comes after its earnings report stating the company has experienced a massive loss in revenue.

The company also revealed that it is experiencing hampered production due to the global chip shortage.

Rivian Stock Drops

After hitting a new 52-week low earlier in the day, shares of the electric-vehicle automaker were down more than 13%. This recent dip in Rivian Automotive stock fell sharply in after-hours trading on Thursday and is due to the reported losses of the company.

The downfall is a result of the company's failure to meet Wall Street's expectations for fourth-quarter earnings. This comes after Rivian Automotive released its second earnings report since its historic initial public offering (IPO) last year.

Rivian is an American electric automaker company founded in 2009. Rivian is also known to have been backed by Ford and Amazon. The company is also known for its R1T truck and R1S SUV electric vehicles.

Rivian reported that it generated $55 million in revenue over the course of the year, with nearly all of that coming in the last three months.

As reported by CNBC, during the fourth quarter of 2021, Rivian reported an adjusted operating loss of $2.8 billion, including $1.1 billion in the previous quarter, representing a significant increase in losses over the prior year.

The company's net loss for 2021 resulted in a total of $4.7 billion, with $2.5 billion of that coming in the last quarter.

Rivian announced that it had delivered 909 vehicles to customers in the fourth quarter of 2021.

Rivian CEO R.J. Scaringe stated on Thursday that the company would be able to produce more than 50,000 units this year if there were no issues with the supply chain in the process.

Despite the losses, the company remains stable with $18.4 billion in cash on hand at the end of the previous year. Rivian expects its capital expenditures to total approximately $8 billion by the end of 2023.

Rivian Manufacturing Shortage

Rivian is maintaining a modest production schedule for 2022, despite the fact that supply chains are constrained and the global chip shortage is continuing to batter the auto industry.

It is also stated in the shareholder letter that it is expected to produce only 25,000 vehicles throughout the year. The company stated that it would be able to produce 50,000 vehicles if there were no supply chain issues.

In an earnings call, the Rivian CEO RJ Scaringe stated, "We are no doubt experiencing one of the most challenging supply chain environments the automotive industry has ever seen."

Rivian Partnership With Amazon

Rivian also shared its strong partnership with Amazon. Both companies have agreed on a massive scale production of R1T trucks.

Rivian and Amazon are working together on an electric delivery van. These R1T trucks will be used as electric delivery vans for Amazon.

To help reduce carbon emissions from its logistics fleet, the e-commerce giant announced that it would order up to 100,000 vans through 2024.

As reported by The Verge, Amazon recently confirmed that it owns approximately 20% of Rivian after participating in multiple funding rounds prior to the company's initial public offering (IPO).

According to Google Finance, the Rivian stock price is now at $41.16.