Rivian risks alienating customers who have been waiting years for their vehicles

Rivian risks alienating customers who have been waiting years for their vehicles

Rivian reported mixed results for the fourth quarter on Tuesday, with a loss per share less than analysts expected but falling short of revenue estimates.

  • Rivian’s profit this week fell short of analysts’ expectations.
  • The EV startup is planning fewer cars this year than many expected.
  • Rivian risks alienating customers who have been waiting years for their vehicles.

Rivian faces a challenge to win back some of its early backers as the upstart electric vehicle maker continues to struggle to produce enough cars to meet demand.

The launch which Production targets in 2022 have already been missedIt included a lower-than-expected build target of 50,000 vans, SUVs and vans for 2023.

As Rivian continues to struggle with mass productioncommunication with customers who have been waiting for their vehicle for years leaves a part burning feeling from the company.

Parker Elmore placed its order for the R1S SUV more than two years ago. It hedged its bet on Rivian with orders for the Tesla Cybertruck and the electric Ram 1500.

“I’d be lying if I said there wasn’t some trepidation: Is this company going to do it?” Elmore told Insider. “You place all the orders because you don’t know who’s actually going to win or deliver.”

Insider has spoken or corresponded with about a dozen customers in recent months. Some feel embarrassed by Rivian’s early support as their wait time grows to nearly half a decade. Some expectant customers and shareholders have compared Rivian’s struggle to reach mass production to Rivian’s Teslawhich managed to wade through “production hell” in 2018 without alienating its most fanatical supporters and emerge as the world’s most valuable carmaker.

Rivian previously said delivery times are “based on a number of factors, including delivery location, configuration and original pre-order or reservation date.” The spokesperson also said customers experiencing delays have been put in touch with customer service.

For a young company like Rivian that doesn’t skimp on marketing, those early fans could make or break its reputation, shareholders and analysts said.

“The auto industry is notorious for customers who have strong brand loyalty,” Garrett Nelson, an automotive analyst at CFRA Research, told Insider. “For a newcomer like Rivian, it’s a huge challenge to break in when you don’t have a brand and you’re just starting to build that relationship and trust with customers.”

This breach of trust between Rivian and some of its early customers comes at the worst possible time for the company, Nelson said, as Wall Street was disappointed not only by the modest production target for the year, but also by the lack of transparency. where the company’s pre-order list is.

“We’re starting to see how difficult these speed bumps are for companies like Rivian,” he said. “We’ve seen some really disappointing results from Rivian and Lucid, as they’ve been ramping up production much more slowly than many investors and buyers would like to see.”

Rivi’s posts were mixed in the fourth quarter

Rivian reported mixed results for the fourth quarter on Tuesday, with a loss per share less than analysts expected but falling short of revenue estimates. Investors and customers remain concerned about the The EV startup’s ability to deliver based on his ambitious promises.

In 2022, Rivian almost reached its production targets, produced 24,337 cars and delivered 20,332 units. Meanwhile, deliveries were missed but not nearly as much starting Lucid‘shaving. About 84% of vehicles produced by Rivian reached customers last year.

Rivian plans to build 50,000 vehicles in 2023, though some analysts expected at least 60,000. The company has the most cash of any EV startup at $11.6 billion, but even with some good news, investors are running out of patience.

Shares have fallen 83% in 2022 and were down another 17% in Wednesday trading following the news.

Wedbush analyst Dan Ives said in a post-earnings note that “Rivian remains in this cobweb of production issues, worried that customers will start turning to competitors.”

While some customers, such as Elmore, remain cautiously optimistic, others who have taken delivery of their Rivians are pleased with the vehicles.

Earlier this week, Rivian led the JD Power Electric Vehicle Ownership Study. And David Dvinov, the founder of a trucking company in New Jersey, received his R1S last month after placing his order in October 2019. Dvinov said he’s glad he waited the more than 3 years it took.

Rivian’s challenge lies in the delays

Rivian did not disclose its pre-order numbers in its latest quarterly report. The company had 114,000 net pre-orders as of November 7. (Regarding its earnings, Lucid has also announced that it will stop reporting bookings.)

Rivian is juggling its first pickup and SUV, 100,000 delivery trucks for Amazon, a charging business and even foraying into the electric bike space amid a challenging macro environment and supply chain constraints.

The long list of priorities is frustrating for those who have been waiting for their Rivians to arrive since 2019.

Rivian’s production and shipments were both slower from the third quarter to the final quarter of the year than from the second quarter to the third quarter; Rivian attributed several days of production downtime in the fourth quarter to the lack of suppliers.

In an email to the company announcing its second layoff in seven months, CEO RJ Scaringe also emphasized the need for focus.

This is crucial, as Rivian not only delayed thousands of customers from receiving its flagship products, but also had to push the introduction of its smaller, more affordable next-generation R2 platform to 2026.

Are you a current or former Rivian employee, Rivian vehicle owner or Rivian order holder? Contact these reporters at naughton@insider.com and astjohn@insider.com.

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