After a rough start to production, EV maker Rivian seems to be getting its feet under it, revealing during its Q2 earnings call it plans to begin a second shift in the weeks ahead.
The additional shift comes as part of its push to meet its goal of building 25,000 trucks and SUVs in 2022 — a number the company reaffirmed during the call and in a letter to shareholders. Company officials revealed earlier this year it planned to add a second shift at its plant in Normal, Illinois in order to meet the 25,000-vehicle target.
The launch date for the second shift is unclear, CEO R.J. Scaringe saying it will take a bit of time while noting some workers have already been hired and are in training.
Hitting the target
On the surface, Rivian appears to be getting the bottlenecks in its production process eliminated, as it nearly doubled its output of vehicles from Q1’s total of 2,553 to 4,401 in the second quarter — a total of 6,954 vehicles.
It also built 700 electric delivery vans for Amazon, which is has an order for 100,000 vans — and is Rivian’s largest investor. This means in order to produce the 18,046 vehicles it needs to hit the mark; it will have more than double its Q2 output.
That may seem doable, but Scaringe has repeatedly pointed to supply chain issues as the biggest culprit in its production delays — more than learning the fastest, most efficient way to build the vehicles.
“There was a lot of the second quarter where we weren’t able to fully utilize our (production) line,” he said during Q2 earnings call, adding later, “we weren’t able to even run a full single shift because of component supply.”
However, that appears to be a problem its addressing, noting he’s “encouraged” by recent improvements.
Part of those issues it’s addressing it streamlining its personnel to focus on meeting the 25K goal, while also slowing the company’s cash burn. It lost $1.71 billion during the quarter on revenue of $349 million. It went through $1.2 billion, leaving it with just under $15 billion to keep moving forward.
Officials sought to reassure investors during the call saying that it had plenty of money to continue launching the new vehicles while preparing for its second series of vehicles, the R2s. They’re expected to be produced at a yet-to-be-built plant in northern Georgia in 2025.
Fortunately, revenue will grow as it produces more vehicles as it has a backlog of more than 98,000 reservations for the R1T and R1S. Doubling the production and delivery numbers will obviously double the revenue, slowing the company’s cash outlay.