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Rivian (RIVN) Q1 2022 earnings preview


Rivian CEO RJ scaringe in the customer experience center of the company outside its Normal plant, Aptil 11 2022. Normal, Ill.

Michael Wayland/CNBC

Make your own electric vehicle Rivian AutomotiveAfter the market closes on Wednesday, Refinitiv will release its first quarter earnings. Wall Street analysts polled by Refinitiv expect a loss of $1.44 per share on revenue of about $130.5 million – but those numbers are likely to be just a small part of the story.

Rivian’s future outlook over the next quarter is the bigger story. Rivian is like many automakers struggling with disruptions in global supply chains that started when Covid-19 locked downs were initiated and which have been magnified since Russia invaded Ukraine. CEO RJ Scaringe warned investors in MarchRivian would not be able produce the same number of vehicles by 2022, as originally planned, in spite of a growing order book.

The electric truck maker may also face questions about whether its largest investors – AmazonAnd Ford Motor – are losing confidence. CNBC reported that Rivian’s shares fell by more than 15% Monday. Ford sold 8 millionThe total number of shares in the company is 102 million.

Here are three themes that may come up in Rivian’s results, if reports last week from high-profile companies in the EV space — Fisker, NikolaAnd Lucid Group — offer any guidance.

There is a strong demand for all types of EVs

Last week, Fisker (Nikola) and Lucid reported high order books in their quarter-end results.

Lucid stated it now has over 30,000 ordersAir sedans are more expensive than the Air. 25,000 last quarter – and that doesn’t include a recent order for up to 100,000 Lucids over the next 10 years from the government of Saudi Arabia, CEO Peter Rawlinson said.

Nikola claimed that Nikola has received purchase orders, letters of intention, and memorandas of understanding. more than 500 of its battery-electric heavy trucks. Although it may not seem like much, Nikola still has a lot of things to prove. allegations that founder Trevor Milton misled investors. Although Milton denied these allegations, they nevertheless brought about his arrest. abrupt departure.) This number will likely grow, as more fleets get a chance for Nikola’s semitruck-powered Tre to be evaluated, according to the company.

Fisker now holds over 40,000 reservations to its Ocean SUV which will launch in late 2018. Henrik Fisker, CEO, stated that the demand for the Ocean SUV is so high, Magna International is now working with Fisker to double the production capability from the originally planned 50,000 annually to up to 150,000 by 2023.

Rivian stated it back in March. about 83,000 reservationsIts R1T pickup truck and R1S SUV. Investors will eagerly await Wednesday’s announcement.

Still, supply chain problems are a major challenge

Since last year, automakers of every size have struggled with shortages of semiconductor chips. This is due to a surge in demand for gaming and personal computers during Covid lockdowns. The Russian invasion in Ukraine, which occurred more recently, has caused shortages of some components as well as a rise in commodity prices.

Fisker will not begin production before mid-November. However, both Lucid and Nikola had to reset their expectations about this year’s production numbers. Lucid lowered its full-year production guidance to 12,000 vehicles from 20,000 in February. Rawlinson stated that the chip shortage played a part in this decision. However, there were also shortages of common materials such as glass and carpet. Lucid reiterated the guidance last week in its earnings report.

Nikola is likely to sell more than 500 trucks in this year’s market, however it anticipates that only 300-500 of these will be built due to part shortages. Nikola’s Arizona plant is capable of building 2,500 trucks annually, despite further expansions. The issue is that the company isn’t confident that it can secure enough chips – specifically, control units for its battery modules – CEO Mark Russell told investors on Thursday.

Rivian also has already reduced its 2022 production estimates. In March, it said it expected to produce 25,000 vehicles in 2019, a decrease from its 50,000 predicted at the IPO roadshow. Wall Street will seek out updates on the production capacity of the company when it reports next week.

It will take more effort to raise cash.

As TeslaWhen a stock price is high, it’s easy to raise cash. Investors are well aware of this. Fundraising can become difficult when stock prices are low.

Rivian’s stock has fallen nearly 90% since its peak in 2020. This means that the company must make agreements with private money to obtain cash. In its most recent deal, announced last week, a private investor agreed to buy $200 million worth of convertible notes – notes that will pay 8% interest if Nikola repays in cash, and 11% if it repays in stock.

Lucid has nearly $5.4 billion in cash left over from its public listing, said Sherry house, chief financial officer. But with big plans to expand its own Arizona factory, and a planned second factory in Saudi Arabia – a total of $2 billion in planned capital expenditures in 2022 – even relatively cash-rich Lucid may find itself in need of more funds before it can get to sustainable profitability. Without a significant increase in its stock price, it could be difficult to achieve a multibillion dollar raise without significantly diluting shareholders.

Fisker stated that the company still holds $1 billion of cash. However, a large portion of this is used to fund costs associated with starting production of the Ocean SUV. Geeta Geeta-Fisker is the chief financial officer. She estimates that Fisker will spend between $715 and $790 millions this year on capital and operating expenses.

At that rate, Fisker might need to raise $1 billion or more of additional capital as soon as the second quarter of next year – and like Lucid, its stock is well off its highs, which will make a big secondary offering a challenge.

Rivian, unlike its competitors, may not have to worry too much about cash in the near future. As of December 2021, Rivian held $18.4 trillion in liquid assets. In March, the company stated it expected to use $8 billion by the end 2023 to fund its production ramp-up of R1S and R1T as well as an electric delivery van. Amazon.

Rivian could use this cash advantage as a competitive edge to keep its stock prices up in a crowded EV market.