Tesla CEO Elon Musk accuses the Rivian boss of poaching employees.
(Photo: Bloomberg)
new York They are easy to find in the US electric car industry: the ex-Tesla managers at the top of the company. Peter Rawlinson was chief engineer at Tesla, today he heads the electric car manufacturer Lucid. Henrik Fisker designed the original Tesla Model S, now the Dane leads the car start-up named after him. Only Rivian, the hotly traded electric pickup maker that went public in 2021, is run by a non-Tesla man: Robert “RJ” Scaringe. Which could be one of the reasons why the company boss likes to mess with Tesla.
But first he has to ramp up his own production. Rivian continues to struggle with supply chain difficulties, high costs and erratic demand, the Irvine, Calif.-based manufacturer said late in the week. Revenue in the past quarter rose to $364 million. Analysts had expected an average of $335 million. The loss was higher than expected.
The net loss rose to $1.7 billion in the second quarter, almost tripling the same period last year. The pressure on Rivian to quickly deliver more cars and reduce costs is growing. The company ended the quarter with approximately $15.5 billion in cash and cash equivalents.
Scaringe has to reduce profit expectations for the year as a whole: Rivian now expects a loss of 5.4 billion instead of the previous 4.7 billion dollars, partly because of higher costs for the raw materials required. “Our main focus remains ramping up production,” Scaringe said. “However, we believe supply chain constraints will continue to be the limiting factor.”
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The company still expects to produce 25,000 electric vehicles this year. At the end of June, 98,000 pre-orders were recorded.
Rivian went public in 2021. The stock has fallen 62 percent since the beginning of the year. Like its competitor Lucid, Rivian had to significantly lower its production targets for 2022, which was met with grumbling on the stock exchange. Both companies rely on the complex development of their own production, with all the known challenges. In contrast, competitors have Fisker produce to order. Rivian has a facility in Normal, Illinois. The company recently announced that it would have to lay off six percent of its workforce.
Rivian focuses on wealthy, sports-savvy customers
The Rivian founder is seen as a counterpoint to Elon Musk. Scaringe seems cautious, speaks in a calm voice and doesn’t let himself be lured out of his reserve. Unlike the Tesla boss, he is comparatively reluctant to engage on Twitter and holds back on political issues. The manager, who received his doctorate from the elite university MIT, has opted for a two-pronged strategy. Rivian will produce electric vans for Amazon, which the two companies will jointly develop. Amazon has ordered 100,000 vehicles to be delivered by 2030. More could follow.
At the same time, the start-up produces the R1T pick-up truck and the R1S SUV for the mass market. Rivian relies on wealthy customers with an affinity for sports. The pleasingly designed R1T has been shipping since September 2021 and is available from $68,000, with an additional charge including a retractable barbecue grill.
Scaringe recognized the growth potential of the electric car market early on. “There are around a billion vehicles in the world that will all need to be electrified in the next 10 to 15 years,” he told Bloomberg-TV. Rivian wants to do its part and therefore has to switch to mass production as quickly as possible.
Scaringe was repeatedly at odds with Tesla. Musk accuses the competitor of poaching employees who also take trade secrets with them. Scaringe denies that.
The founder is now relying on external expertise. Rivian announced that former Mercedes-Benz manager Harald Kröger is moving into the board of directors. According to industry insiders, Rivian is currently exploring the construction of a plant in Europe – Germany is also in focus, despite the high energy prices.
More: Tesla challenger Lucid cuts production target in half – Fisker sees itself on course.