Rivian Automotive INC (NASDAQ: RIVN), a US electric vehicle maker, has lost more than 71% year-to-date and was trading at $29.8 on June 7.
RIVN generated positive news in 2022. In particular, the company received large grants and also attracted the attention of large investors. It plans to produce around 25,000 cars this year, including its original trucks, which outperform competitors in some respects.
Meanwhile, Rivian Automotive Inc (RIVN) had $17 billion in cash and cash equivalents at the end of March 2022, which is enough to continue operations through 2025.
Additionally, Rivian says it has over 90,000 R1 truck orders, as well as a large order of 100,000 service vehicles for Amazon.
Therefore, RIVN shows great potential. However, implementation times and rapid and steady revenue growth are estimated in years. It is this need to wait that is putting pressure on RIVN prices.
A similar picture was seen in Tesla stock, which has performed at least as well as the S&P 500 for three years since 2014. Tesla stock was riskier at the time as the company was just beginning to roll out its large-scale production.
So, for Rivian Automotive Inc (RIVN), the situation is now similar: the company has orders, but they must be fulfilled by creating large-scale production from scratch. It is clear that the electric vehicle market has evolved considerably over the past ten years.
In particular, global battery production is expected to increase 20 times over the next decade, creating a huge demand for lithium. Although lithium suppliers cannot guarantee that all future demand will be met, this is an additional risk for all automakers.
At the same time, there’s also a strong positive that Tesla didn’t have at the start: it’s already clear that electric vehicles are the future, and consumers are showing a strong interest in switching to electric cars.