Startup electric truck manufacturer Rivian continues to see robust demand for its inaugural products, with nearly 200,000 orders in hand, and a long way to go to fill them.
Rivian announced during a second quarter earnings call Thursday it had more than 98,000 orders for its R1T pickup and R1S SUV as of June 30. Amazon, an early investor in Rivian, has ordered 100,000 commercial electric delivery vans.
The California-based company, which launched production in Normal, Illinois, in September and has struggled with a slower than expected ramp-up, has built about 8,000 EVs and reaffirmed a scaled-back production target of 25,000 vehicles this year.
Rivian generated $364 million in revenues and reported a net loss of $1.7 billion for the quarter. The company reported Thursday it had $15 billion in cash at the end of the second quarter.
In addition to concerns about the production ramp-up, Rivian is navigating the implications of President Joe Biden's historic climate bill, which passed the Senate on Sunday and is headed for a vote in the House on Friday. It includes an extension of the $7,500 federal tax credit for EV purchases, but sets a cap that would make trucks and SUVs priced over $80,000 ineligible. That would cut the majority of Rivian's sales out of the mix for the tax credit beginning next year.
The $430 billion Inflation Reduction Act focuses on health care and clean energy, with a number of measures to promote EV adoption. The bill extends the $7,500 tax credit until 2032, adds a $4,000 tax credit for used EVs and lifts the 200,000 vehicle sales cap for manufacturers.
It also imposes new restrictions, excluding higher-income buyers and EVs priced above $55,000 for sedans and $80,000 for SUVs and trucks, which could impact Rivian and other manufacturers. The bill also includes new domestic battery sourcing requirements.
"We're incredibly happy to see policy that helps drive more rapid adoption of electric vehicles, as well as important investments in building domestic battery cell production," Rivian CEO and founder R.J. Scaringe said Thursday. "While many of our R1 configurations won't meet the bill pricing requirements, our (next-generation) R2 product line and associated cell roadmaps are being developed to allow our customers to capture the value of these incentives. "
The starting price for the R1T truck is $67,500, while the R1S SUV lists for $72,500. But after add-ons and options, most Rivian customers spend more than $80,000 on their EVs, the company said.
On Wednesday, Rivian sent current customers who have reserved an EV a potential workaround to qualify for the full $7,500 tax credit before the bill becomes law Jan. 1. Rivian said buyers can sign a "written binding contract" for their R1T or R1S purchase, making $100 of their existing $1,000 deposit non-refundable, but excluding them from the price and income restrictions, regardless of the delivery date.
Rivian cautioned that the final bill terms were not certain and there was no guarantee the IRS would approve the tax credit, but offered the option "as a way to do what we can to increase the probability of receiving the $7,500."
During the conference call, Scaringe reiterated that ramping up production in Normal remains the "key focus" for Rivian, but the company has elevated the importance of cost-cutting as well.
Last month, Scaringe was in Chicago to unveil the first of 100,000 electric delivery vans to be put in service by Amazon. One week later, Rivian announced it had laid off 6% of its total workforce, or about 840 nonmanufacturing employees, including about 50 at its Normal assembly plant. Scaringe cited rising inflation and tightening capital markets for the cost-cutting move.
Rivian had about 6,000 employees in Normal and about 14,000 across the company before implementing the restructuring plan.
The Normal plant has an annual production capacity of 150,000 vehicles and was projected to build 50,000 in 2022 before global supply chain issues, including the ongoing semiconductor shortage, cut the first-year target in half. Rivian produced 4,401 vehicles during the second quarter, up from 2,553 built in the first quarter.
Amazon electric delivery vans accounted for about a third of the nearly 8,000 EVs produced through the second quarter, the company said previously. The first EDVs rolled out in a dozen cities last month, but Scaringe declined to give a target production total Thursday for the year.
"We're really excited to start seeing a lot more of these on the road," Scaringe said. "We are very, very motivated to deliver as many as possible, and certainly Amazon is pushing for that as well."
While Rivian is downsizing its nonmanufacturing workforce, it still plans to hire an additional 1,500 workers and add a second shift at the Normal plant by the end of the third quarter.
The company is also building a second $5 billion assembly plant in Georgia, which is slated to produce Rivian's next-generation EV on the smaller R2 platform beginning in 2025.
When Rivian went public in November, investors looking for the next Tesla quickly pushed its valuation north of $100 billion. But the stock, which hit a high of $179.47 in mid-November, has fallen sharply this year amid the slow ramp-up. It closed at $38.84 per share Thursday, giving Rivian a market cap of about $34 billion.