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2022-04-06 18:15

Rivian Automotive Inc. stock closed 5.0% down on Wednesday even after confirming that it was on track to hits its production target for the year.

Rivian’s production numbers
Rivian disclosed first-quarter production and deliveries figure and fortunately the company has managed to live up to expectations.

Late Tuesday, the business announced that for the quarter ending March 31, it built 2,553 automobiles and delivered 1,227. Rivian also foresaw shareholder concerns about its intentions for the remainder of 2022. The carmaker believes it is in good shape to meet its full-year production goal of 25,000 vehicles. For the rest of the year, that would demand an average of 2,500 automobiles per month.

Moreover, the company also has informed its shareholders about a scheduled 10-day closure to upgrade production lines, as well as supply chain issues, which were noted as headwinds by the corporation.

The propagation of the omicron form is predicted to result in an increase in COVID-19 cases, as well as severe winter weather at its Illinois site were also among the hurdles faced by the company.

Baird’s price target on Rivian
“We are optimistic with stabilizing expectations," according to Baird analyst George Gianarikas, amid manufacturing setbacks since the business went public in November. He's also happy that, despite supply chain difficulties, manufacturing has begun to ramp up. He maintained his outperform rating and $84 price target for the company. Rivian's 25,000 car target, which was initially published in the company's latest financial reports in early March, was widely viewed as underwhelming.

Rivian was unable to achieve a run rate of closer to 50,000 vehicles due to supplier constraints, and the manufacturer will need to demonstrate its capacity to continuously scaling up production to keep customers pleased and pent-up demand high.

For investor and customer Amazon, the company maintains a facility in Normal, Illinois, where it currently produces the R1S sport utility vehicle, R1T pickup truck, and a delivery van. Rivian has stated that it plans to grow its yearly capacity to 200,000 vehicles by 2023 as it adds additional vehicles to the production.

Rivian to build a new plant

Rivian, which plans to develop a new plant outside Atlanta in 2024, will eventually be able to produce 400,000 automobiles per year as well as battery cells. Rivian Automotive, Inc. was created in 2009 as an electric vehicle manufacturer and automotive technology firm in the United States. Rivian is developing an electric pickup truck and sport utility vehicle on a "skateboard" chassis that can support future cars or be used by other companies.

The stock is down 60% for the year and 50% from the price at which it had its initial public offering.