Back in October, Rivian quietly revealed that it produced just two R1T electric trucks per day. The automaker has slowly ramped up manufacturing, but it’s still far from reaching a practical production volume, and pre-orders are mounting faster than they can be fulfilled. Unsurprisingly, the cracks are starting to show.
The first problem is money. As expected, Rivian has drained cash since 2020, accumulating an extra $1 billion in losses. And while the company has over 70,000 R1T pre-orders on its plate, customers only pay a $1,000 refundable deposit to reserve their vehicle. And that brings us the Rivian’s second, very big problem; it can’t make cars fast enough.
Again, Rivian only made two cars a day when it kicked off R1T production in October of 2021. If the automaker wanted to fulfill its original list of 55,000 pre-orders by October of 2022, it would need to make 150 trucks a day. That’s a small amount for a Ford factory pushing out gas guzzlers, but challenging for a startup building EVs during a supply shortage and pandemic.
We made our first R1S deliveries last week from our factory in Normal, IL to RJ and our CFO Claire. We’re working towards ramping production over the next few months on our way to full volume production. Thanks to our team for all the hard work to make it happen! pic.twitter.com/Ql9Di2ySBE
— Rivian (@Rivian) December 20, 2021
Yes, Rivian is making cars a bit faster now. But it’s accumulated an extra 20,000 pre-orders, many of which won’t arrive until 2024 or later, according to the startup’s CEO. Additionally, all pre-orders for the “Max Pack” R1T configuration, even if they were filed back in 2018, are delayed until 2023 (unless you change the car’s configuration to a smaller battery).
By the looks of it, Rivian expects to make less than 150 trucks a day (on average) over the next year. The company says it will build a second production plant to speed things up, but $1,000 deposits don’t build an EV factory. That means Rivian will borrow more money, and going deeper in debt means taking on more pre-orders to appease lenders and investors—yeah, normal activity for a tech startup, but not great for a company fighting supply chain issues and strong competitors like Tesla or Ford.
There’s one part of this story we can’t gloss over; Rivian isn’t just building cars for regular people. The automaker has an exclusive deal to build electric delivery trucks for Amazon, and it will soon take orders for other commercial vehicles. Rivian’s financial situation is incredibly complicated, and its stack of unfulfilled pre-orders doesn’t necessarily reflect on the company’s health or hurdles.