Rivian said that it may fall short of the production targets it set for itself in 2021 as a result of supply chain constraints. Following that, its shares have dipped to their lowest point since it started trading as a public company.
Shares fell about 13 percent on Friday to hit a record low for the automaker, reports Reuters. The automaker with the highest market cap after Tesla saw its stock price reach $94.77 in early trading, opening below the $100 mark for the first time since the company’s IPO.
The reaction follows the revelation that the company expects to miss its production target of 1,200 vehicles by “a few hundred vehicles” due to supply issues. Increasing production of the R1T pickup truck, the R1S SUV, and Amazon’s delivery vans within the next few months would be akin to conducting a “really complex orchestra,” Robert “RJ” Scaringe, Rivian’s CEO, admitted.
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Rivian did announce yesterday that it will be building a new $5 billion manufacturing plant in Georgia. Construction is expected to begin next summer, though, and vehicles are only supposed to start rolling off the line in 2024. Thus, the company plans to increase production at its Normal, Illinois plant, which opened in September, by 50,000 vehicles.
Still, the stock market has taken a dim view of Rivian’s current production troubles that have, in many ways, reminded traders that the company still faces many challenges.
“The strong order book provides support for the production ramp, though does add pressure to get vehicles to customers that may get impatient as current R1 orders won’t be ready until the end of 2023,” Wells Fargo analyst Colin Langan told Reuters.
Staying optimistic may prove to be a big challenge for the brand that is ramping up production during one of the most severe supply chain challenges in recent memory.
