Electric Truck Maker Rivian Aims for a 10% EV Market Share by 2030

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【Summary】Rivian Chief Executive Officer R.J. Scaringe said at a conference on Thursday that the electric vehicle company is "making progress" in the increase of production at its factory in Normal, Illinois and the company aims to take a 10% share of the U.S. EV market by 2030.

Eric Walz    Apr 02, 2022 4:20 PM PT
Electric Truck Maker Rivian Aims for a 10% EV Market Share by 2030
Rivian's fully-electric R1T pickup and R1S SUV are being built at the company's factory in Normal, Illinois.

Rivian Chief Executive Officer R.J. Scaringe said on Thursday the electric vehicle company is "making progress" in the increase of production for electric vehicles at its Normal, Illinois, assembly plant and is aiming to take a bigger share of the U.S. EV market by 2030.

The remarks were made during a Wolf Research conference and reported by Reuters.

"We're absolutely making progress," said Scaringe about the company's push to increase vehicle production. "The plant is starting to ramp nicely."

Rivian's factory in Illinois was temporarily idled last month in order for the company to make upgrades of its assembly lines to increase output.

Scaringe said Rivian idled the plant for the first 10 days in early January. 

Scaringe said that Rivian aims to grab 10% of the EV market by 2030 with its electric trucks and SUVs. When questioned about how Rivian would accomplish this, Scaringe said the company will build out a portfolio "to allow us to really work toward building a position of 10% market share within the EV space." 

The CEO's remarks sent Rivian's stock up 10.7% to $63.71 on Thursday. However for the year, the stock is down almost 38% as investors fear that it will take Rivian years to ramp up production.

Like many other automakers, Rivian's production output has been hampered by the global semiconductor chip shortage. Scaringe described its as the "most painful" constraint in the push to increase production. Scaringe said Rivian had replaced some chipsets for some vehicle systems with alternate chipsets that are easier to source. He said the global shortage would remain a factor through the rest of the year.

Rivian produced just 1,015 vehicles last year, coming up short of its target of 1,200 due to supply-chain constraints.

Rivian's stock slumped after it outlined during its first quarterly earnings report as a public company its struggles with the manufacturing of its first two electric models, the R1T pickup and R1S SUV. 

Rivian also has one of the biggest contracts in the industry to supply e-commerce giant Amazon  with 100,000 electric delivery vans by 2025. Amazon is a backer of Rivian and holds a 20% stake. Some reservation holders are concerned that Rivian will prioritize production for Amazon, meaning that customers might have to wait longer to take deliveries of the R1T or R1S.

In an amended SEC filing on Nov 5, 2021, Rivian said it had had approximately 55,400 R1T pickups and R1S SUV pre-orders in the U.S. and Canada as of Oct 31, 2021. But in the filing, Rivian wrote, "based on our current production forecast, we expect to fill our pre-order backlog of approximately 55,400 R1 vehicles by the end of 2023." 

Scaringe also said at the conference that Rivian was building a pilot line for in-house production of battery cells and plans to co-invest with an unnamed supplier on production. Rivian's battery cells are currently supplied by Samsung SDI. He also said automakers will need to work on securing critical battery materials like lithium and nickel.

"It's not a choice. It's a requirement," he said.

In 2018, Rivian announced that it would sell an all-electric pickup truck equipped with a 180 kWh "Max" battery with a range of 400 miles. At the time it was a big selling point, as few automakers were offering electric vehicles with over 300 miles of range. However, in late December, Rivian said it will delay production of the R1T R1S vehicle with the "Max" battery pack until 2023, which indicates that Rivian might be having some battery supply issues.

In December, Rivian announced plans to build a second EV factory in Georgia. The project is said to be a "multibillion-dollar investment" with an annual output of 200,000 vehicles a year and employ up to 8,000 people at full production by 2030.

Rivian launched its high profile IPO in Nov 2021. Investors helped boost the company's stock price, pushing the company's market cap to above $100 billion, which made the company more valuable than U.S. automakers Ford Motor Co and General Motors. Since then the company has lost nearly half its value. Rivian's current market cap is 57.3 billion.

On the positive side, there is the potential for significant upward growth for Rivian. But the company must first solve its short term problems in order to become a major player in the EV space.

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