Rivian Won't Join Tesla's EV Price War, CEO Says Demand Is Robust
Rivian CEO RJ Scaringe said the automaker is not joining the EV price war started by Tesla earlier this year.
He motivated the decision with the fact that Rivian has a robust order backlog and the vehicles it sells offer plenty of value for the current price levels.
“We feel confident in the value proposition of what we’re delivering at our pricing levels today,” Scaringe said on Rivian’s fourth-quarter earnings call on February 28, as reported by Automotive News.
He noted that the carmaker has an order backlog that will take until 2024 to fulfill, in spite of the current climate of higher interest rates that generally reduces consumer demand. “The demand backlog we have is very robust. It gives us a clear line of sight well into 2024,” Scaringe said.
However, Rivian did not provide a number for its order backlog; in November, the company reported 114,000 preorders for the R1T pickup and R1S SUV in the US and Canada. Rivian also has a long-term order from Amazon for 100,000 EDV delivery vans, which have to be delivered by 2030.
Speaking about Tesla’s price cuts, he noted that they came after increases last year and they also targeted lower-priced segments where Rivian doesn’t yet compete. That said, Tesla did lower prices on the Model S and Model X as well in the United States, although none of these models can be considered a direct rival for the Rivian R1S or R1T.
Rivian reported a fourth-quarter revenue of $663 million and a fourth-quarter net loss of $1.7 billion compared with a $2.5 billion loss a year earlier. The company also reported cash and cash equivalents of $11.6 billion, down from $13.3 billion at the end of the previous quarter.
In its fourth-quarter earnings report, the carmaker said it continued to burn through cash but expected improved vehicle gross margins over time through cost reductions and rising production levels.
Rivian forecast full-year 2023 production of 50,000 vehicles, including the R1S, R1T and EDV van. That’s double its 2022 output but below analyst expectations of 67,170, according to Visible Alpha data cited by Reuters.
The automaker said that supply chain issues will limit production from its plant in Normal, Illinois, which has a capacity of 150,000 per year.
Source: Automotive News
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