Rivian stock soared Thursday after the aspiring Tesla challenger maintained its 2022 production guidance late Wednesday. That offset a big first-quarter revenue miss for embattled Rivian.
"We are encouraged by the acceleration of our demonstrated production rate," CEO R.J. Scaringe said on a late Wednesday earnings call. Production rates have tripled since the start of the year, Rivian says.
In a note to clients late Wednesday, RBC Capital Markets analyst Joseph Spak highlighted management's "positive comments" signaling the EV production ramp should improve, especially in the second half of 2022.
"Encouragingly, RIVN will add a second shift mid-year... leading to a 2H-weighted production ramp," Spak said, adding that management "indicated they don't see a (battery) cell constraint over the next five years." Spak rates Rivian stock at outperform but cut his price target from $100 to $77, based on valuation.
Rivian boasts heavyweight backers, including Ford and Amazon. Ahead of earnings, Rivian stock hit a record low Wednesday after Ford disclosed it had sold 8 million RIVN shares.
On Thursday, Rivian stock rocketed nearly 18% after CEO Scaringe said "demand continues to accelerate," as well as production.
As of Wednesday, Rivian reports more than 90,000 electric truck and SUV preorders, including 10,000 new orders since a March price increase.
In Q1, Rivian produced 2,553 EVs and delivered 1,227 EVs, including a mix of trucks, SUVs and commercial vans. Amazon has previously ordered 100,000 vans for deliveries.
As of Wednesday, Rivian said it has produced 5,000 EVs, which suggests roughly 1,400 vehicles since the end of March, or 260 per week.
Rivian briefly halted production earlier this year due to chip and other supply disruptions from Covid-19 and the war in Ukraine, among other factors.
On Wednesday, management maintained a target to produce 25,000 EVs in 2022.
"As we demonstrate our production ramp, our suppliers are leaning in to help ensure we can achieve our targets," Scaringe said on the earnings call.
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Rivian Earnings
Rivian lost $1.43 per share in Q1 vs. a loss of $4.10 a year ago. Revenue came in at $95 million. There is no year-ago revenue; Rivian began delivering its first EV late last year.
Analysts polled by FactSet forecast Rivian to lose $1.48 per share on revenue of $132.8 million.
Rivian reported negative free cash flow of $1.452 billion in Q1 vs. a cash burn of $802 million a year earlier. The EV startup ended Q1 with $16.971 billion in cash and cash equivalents.
"Supply chain continues to be the bottleneck of our production," Rivian said in a shareholder letter Wednesday.
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Rivian Stock
Rivian stock surged 17.9% to 24.30 on the stock market today, slashing but not erasing losses from earlier this week. Shares plunged nearly 21% Monday and a further 10% Wednesday amid reports of Ford's RIVN share sales.
Rivian stock is down 80% since the start of the year, and 74% below its IPO price.
Last November, EV startup Rivian came public via a blockbuster IPO at 78 a share. Shares vaulted to 179.47 a few days later, but then began a rapid decline.
It began limited deliveries of the R1T, an all-electric truck, late last year. But in March, Rivian CEO R.J. Scaringe warned that EV production in 2022 will fall well short of plans, despite robust demand. Management halved plans to build 50,000 EVs this year.
Last week, rival EV startup Lucid maintained its production target but warned of supply disruptions, including Covid-related factory shutdowns in China. LCID stock jumped 10% Thursday after plunging 13.1% on Wednesday to the lowest since January 2021.
LI, RIVN: Growing Pains For EV Startups
Both Rivian and Li Auto are promising but embattled EV startups. Backed by Ford and Amazon, Rivian aspires to shake Tesla's dominance in the U.S. market. In China, Li Auto and its startup peers are challenging both Tesla and homegrown EV giant BYD.
Rivian stock had plunged Monday on an report that Ford was unloading millions of RIVN shares. At the time, Ford declined to comment on the report. But late Tuesday, the auto giant disclosed in a Form 4 filing that it had indeed unloaded 8 million RIVN shares on May 9 for $214.4 million, or $26.80 a share. Ford continues to hold around 94 million Rivian shares. A markdown in the value of its RIVN stake weighed on Ford's Q1 earnings.
Meanwhile, Li Auto stock, along with China EV startup peers Nio and Xpeng, have tumbled as EV sales slow and on U.S. delisting fears.
Li Auto Earnings
Estimates: Analysts polled by FactSet expected Li Auto to lose 7 cents per ADR vs. a loss of 6 cents a year ago. Revenue was seen vaulting to $1.49 billion.
Results: Li Auto earned 7 cents per share. Revenue leapt 167.5% to $1.51 billion.
Li has previously disclosed that it delivered 31,716 vehicles during the first quarter, near the high end of its forecast range and jumping 152% year over year. The automaker has one current model, the Li One SUV. The Li One is actually a hybrid, with a small gasoline engine to extend its range.
Outlook: Li Auto expects Q2 deliveries of 21,000-24,000, up 19.5%-36.6% vs. a year earlier but down sharply vs. Q1. It said Tuesday that deliveries of a delayed new EV, the L9, will now start in the third quarter.
Deliveries of the L9 will begin in Q3 despite "recent pandemic related bumps in the road," CEO Xiang Li said in Tuesday's earnings release. In mid April, Li Auto delayed the planned start of L9 deliveries. Li added Tuesday that supply disruptions from the recent Covid resurgence in China "have been challenging for our industry, and uncertainty remains for the near future."
April sales slowed sharply for Li Auto and its China EV startup peers. Li's EV sales slumped 62% vs. March and 25% vs. a year earlier. Many suppliers were shut down, severely affecting Li's production.
The new Q2 forecast implies combined May-June deliveries will improve, but still lag Q1's pace.
Li Auto also forecast Q2 revenue of $972.3 million-$1.11 billion, up 22%-40% vs. a year earlier. Analysts had forecast $1.759 billion.
Li Auto Stock
Shares rose 2.6% Thursday, after rising 2.3% to 20.13 Wednesday. Li Auto stock closed at the bottom of the day's range but extended Tuesday's post-earnings rally.
Li Auto stock undercut the 50-day moving average in April after the SEC added it to a provisional list of foreign companies to be delisted from U.S. exchanges unless they open up their accounts.
Nio stock and Xpeng rose modestly Thursday. They sank recently after joining LI stock on the provisional list of Chinese companies poised for a U.S. delisting.
Find Aparna Narayanan on Twitter at @IBD_Aparna.
