Rivian confirms production of 7,363 electric pickups and SUVs in Q3, a significant ramp

Rivian (RIVN) announced that it produced 7,363 electric pickups and SUVs during the third quarter of 2022. It’s a significant ramp for the automaker, but at what cost?

The third quarter of 2022 closed out Rivian’s first year of producing vehicles, and the automaker managed a significant ramp-up over the last 12 months.

Today, Rivian confirmed:

Rivian Automotive, Inc. (NASDAQ: RIVN) today announced production totals for the quarter ending September 30, 2022. The company produced 7,363 vehicles at its manufacturing facility in Normal, Illinois and delivered 6,584 vehicles during the same period.

That’s a significant 67% quarter-over-quarter increase considering Rivian produced about 4,400 vehicles in Q2. With the release of its Q3 production and delivery results, Rivian reiterates that it believes it can hit its goal of achieving an annual production of 25,000 vehicles in 2022:

These figures remain in line with the company’s expectations, and it believes it is on track to deliver on the 25,000 annual production guidance previously provided.

Rivian has now produced just over 15,000 vehicles so far in 2022. Therefore, it would need to ramp up to 10,000 vehicles in Q4 to achieve its goal.

The automaker is currently producing the R1T electric pickup truck and the R1S SUV built on the same platform as well as a commercial electric van, which it primarily builds for Amazon right now.

Electrek’s Take

This is a great production ramp in terms of pure output. Rivian went from no production to an annualized rate of almost 30,000 vehicles in about a year.

However, I still have concerns about Rivian producing those vehicles in a financially sustainable way.

As of last quarter, the company still had a significant negative gross margin on every vehicle produced before even accounting for large operating costs.

Furthermore, Rivian guided that it sees still having negative gross margins throughout the rest of the year. Ramping up production is great, but if you still have negative gross margins, you are just losing more money on more products.

The company still had $15 billion in cash on hand at the end of the last quarter, so it’s not critical yet, but we need to see some improvements in gross margins because last quarter it cost them over $1 billion to make about $364 million worth of vehicles.

Rivian is losing $1.7 billion a quarter right now.

Hopefully, it can turn things around and start producing vehicles with a positive gross margin next year because the clock is ticking.

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