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A new power car company likes to mention hundreds of millions of dollars!

2024-05-30 Update From: AutoBeta NAV: AutoBeta > News >

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AutoBeta(AutoBeta.net)05/03 Report--

According to reports, the new American car-building brand Rivian has announced that it has received $827 million in financial aid from the state of Illinois. Rivian will use the subsidy to expand its production facilities to produce a new model, R2, to increase car capacity.

Rivian's Normal plant in Illinois will continue to produce R1s, R1T electric trucks and commercial electric vans, the report said. On March 7th, Rivian released a new medium-sized platform, which is the foundation of R2 and R3 product lines. Among them, R2 is Rivian's new medium-sized SUV, with a five-seat design, starting at about $45000 (about 323600 yuan), and delivery is expected to begin in the first half of 2026; R3 is a medium-sized cross-border car, and R3X is a high-performance version of R3. R3 will be cheaper than R2 in terms of price. The three models will be launched in North America and then sold worldwide.

Life for Rivian is not as good as it had been foreboded. On April 18th, Rivian said it would cut its workforce by 1% in order to cut costs amid a general slowdown in demand in the electric vehicle market. On Feb. 21, Rivian announced in its fourth-quarter 2023 results that Rivian would cut 10% of its workforce due to slowing demand for electric vehicles and lower costs, which at one point caused Rivian shares to fall more than 14% in after-hours trading.

Rivian laid off staff because of a lack of money, and like most new car makers, Rivian is still losing money, so reducing costs through layoffs is crucial for Rivian.

As a new power brand in the United States, Rivian was once regarded as Tesla's biggest competitor. however, the position of Rivian in the auto market is far inferior to that of Tesla. According to the financial report, the total revenue of Rivian in 2023 was $4.434 billion (about 31.896 billion yuan), an increase of 167.4 percent year-on-year and a record high, but the loss continued, with a loss of $5.432 billion (about 39.076 billion yuan) for the whole year. As of the end of 2023, Rivian's cash and cash equivalents were $7.86 billion. In terms of new car production and sales, the cumulative production of Rivian in 2023 is 57232, and the cumulative delivery of 50122 new cars is much lower than market expectations.

Earlier, Rivian said in a statement that it expected Rivian to produce 57000 vehicles in fiscal 2024, roughly the same as in 2023, but well below the 80, 000 analysts had expected. In response, Rivian explained: "Economic and geopolitical uncertainties, especially historically high interest rates, have affected their expectations for 2024." RJ Scaringi, chief executive of Rivian, said "challenging macroeconomic conditions" were behind the weak outlook.

At present, the domestic new energy vehicle market has entered the Red Sea stage, and the market competition is quite fierce, especially 2024 is defined as the key period for car companies to clean up the sand, the car market will also intensify the reshuffle. Against the backdrop of persistent losses, lack of money, and weak cash reserves, it is impossible to know whether the Rivian in 2024 will get better. It is unclear how long the $827 million in financial aid from Illinois will support Rivian, but what is certain is that fierce competition will not leave room for any player on the court, and admittedly, there is not much time and opportunity left for Rivian.

According to the latest financial report, Rivian delivered a total of 13588 new cars in the first quarter of this year, down 3 per cent from the previous quarter. According to the latest news, Rivian reiterated that it will produce 57000 cars in fiscal year 2024 and plans to suspend production for several weeks in the second quarter to upgrade its production line.

Rivian shares closed at $9.830, or 6.73%, at the close of trading on may 2, giving a total market capitalization of $9.784 billion.

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