Rivian, once considered the “next Tesla” electric car maker, is poised for rapid growth, owning 100-year-old auto industry giants such as Ford Motor, General Motors and Volkswagen. It was upsetting. He planned to make his vehicle an electric pickup and sport utility, a model that would stand apart from the minimalist electric cars Tesla produces.
The company has announced its intention to purchase 100,000 electric delivery vans from Rivian, with billions of dollars in backing from investors including Ford and Amazon.
Rivian’s initial public offering is the largest of 2021, and the stock has skyrocketed within days. For a while, the company’s market value was greater than Ford and General Motors combined.
However, difficulties in sourcing critical computer chips and manufacturing problems at the factory in Normal, Illinois kept production volumes much lower than the company had hoped. It has also struggled to build delivery vehicles for Amazon. Rivian’s stock price has plummeted, and investors remain concerned about the company’s prospects.
Now, as production increases, we are facing a tougher competitive environment. Ford has begun production of his F-150 Lightning electric pickup and is likely to overtake Rivian sales by the end of the year. Ford, Volkswagen, Hyundai and several others are ramping up sales of electric SUVs, and GM says it will start selling an electric version of his Chevrolet Silverado pickup next year, as well as two of his electric SUVs.
Buyers of some of Rivian’s vehicles are also expected to soon lose access to federal tax credits under the climate change bill, which the House of Representatives is set to approve on Friday. The Senate passed it on Sunday. Under the bill, purchases of vans, SUVs, and pickups priced at $80,000 or more are not tax deductible. Credit is also not available to individuals or couples whose annual income exceeds his $150,000 or $300,000.
Rivian said last month it would lay off about 6% of its 11,500 employees. In a letter to his employees, Scaringe said, “To realize our full potential, our strategy is one that supports sustainable growth as we move forward towards profitability. It must be.” “In this macro environment, we need to be able to continue growing and expanding without additional funding.”