Rivian is currently trying to ramp up production of its R1T pickup truck to meet demand
Supply issues to slow down these efforts
The company’s shares lost 10% value after this announcement
The stock market is currently very volatile, especially when it comes to electric car makers. Every move made by a company and every speculation about it can affect its value very quickly.
This is what happened to Rivian, who lost 10% of its share prices due to an announcement that the company could be faced by supply issues that could affect production.
Since Rivian only began production in September and at a very low rate, the company was not affected by the semiconductor shortage that has plagued the entire auto industry since the beginning of the pandemic.
Increasing the production means Rivian will need more components and more electronic chips, which it could have trouble obtaining.
According to the company, supply issues will make the production fall short of the targets set for 2021, at 1,200 vehicles.
Despite production problems, the order book for the R1 vehicles is strong enough, with around 2,000 new pre-orders per week, to justify the construction of a new factory in Georgia that should open in 2024 and the expansion of the current factory in Normal, Illinois to increase its output by 50,000 vehicles.
Current orders will take until the end of 2023 to be fulfilled and supply issues could delay this even further, so many investors are worried customers might get impatient and cancel their order, thus why the company’s share prices went down.