After a yr of powerful losses together with the shrinking of of its market cap, Rivian’s (RIVN) – Get Free Report future seems to be difficult.
Jim Chen, Rivian’s chief lobbyist who labored on state legal guidelines to get lawmakers to undertake direct-to-consumer gross sales by automobile producers, is leaving the electrical car startup, the newest in a string of exits, in response to the Wall Street Journal.
Several different senior stage executives have additionally resigned up to now few months, together with Rivian’s head of provide chain and basic counsel.
Similar to different startups, Rivian is chopping again on prices because it makes an attempt to ramps up manufacturing gross sales of its vans and burn by way of much less money.
Chen began at Rivian in 2018 and centered on promoting Rivian’s vans on to shoppers as an alternative of at dealerships, a hurdle that’s frequent for firms solely manufacturing EVs resembling Tesla (TSLA) – Get Free Report.
He is anticipated to work by way of the top of February and is leaving by mutual settlement, a Rivian spokeperson informed the WSJ.
Chen had an identical regulatory and coverage function at Tesla beginning in 2010. He left in 2016 after serving as its vice chairman of regulatory affairs and deputy basic counsel.
Besides Chen, Rivian’s head of producing and chief working officer additionally left inside the previous yr.
Rivian’s Financial Woes
Rivian has confronted an uphill battle because it began producing vans in 2021 and went public with a lofty valuation of $86 billion through the first day of buying and selling.
Since the corporate went public, traders have been much less enthusiastic and shares fell by 76%.
Last yr was a troublesome yr for the truck firm – Rivian almost missed its manufacturing goal in 2022 and its shares fell by a whopping 69.7% up to now yr, decreasing its market cap to 16.79 billion.
Cash stream has additionally shrunk to $13.8 billion on the finish of September. Rivian will report its earnings on Feb. 28.
Rivian additionally laid off 6% of its 14,000 staff final July in an effort to protect money.
CEO RJ Scaringe stated the corporate delayed the launch of its cheaper R2 vans and SUVs till 2026 in order that its future plant in Georgia would have enough time for manufacturing.
Unlike Tesla, which slashed costs by 7-20%, enabling its clients to benefit from the newest tax credit score of $7,500 supplied by the Biden administration beneath the Inflation Reduction Act, Rivian’s vans are extra pricey and don’t qualify.
Both Rivian’s R1T pickup and R1S SUV promote for beneath the $80,000 restrict, however as soon as different options and choices are added, the full value doesn’t meet the brink, the corporate stated.
Rivian had predicted that it might ramp up its manufacturing of its automobiles in 2022, however the firm was beset by main disruptions associated to the provision chain, which led it to halve its preliminary manufacturing goal of fifty,000 automobiles mid-year.
While Rivian lowered its objective to solely produce solely 25,000 automobiles over the entire yr, even this decrease bar couldn’t be reached. The group solely produced 24,337 automobiles.
The fourth quarter was a turning level as Rivian manufactured 10,020 automobiles at its solely plant in Normal, Illinois, delivered 20,332 automobiles for the entire of 2022, together with 8,054 within the fourth quarter.
In an electronic mail to staff Scaringe stated Rivian might have improved its manufacturing figures if provide chain points had not pressured the corporate to close down the plant for 20 days and disrupted one other 50 days of manufacturing.
Bad climate additionally pressured Rivian to close down the plant for 5 extra days, Scaringe stated.
Shares of Rivian are up barely by 2.54% throughout this month.