Rivian Continues To Hemorrhage Money Despite $1.5 Billion in State Incentives
The market for electric vehicles in the U.S. continues to grow: In January 2023, 7.1 percent of all new light-duty vehicles registered were electric, a 74 percent year-over-year increase. During that same period, Tesla’s market share dropped from 72 percent to 58 percent, a sign of serious competition in the space.
Unfortunately, not every company is reaping the benefits: According to a report from Bloomberg, market analysts are increasingly skeptical about the future prospects of Rivian, maker of luxury all-electric trucks and SUVs. In the years since its founding, the company has received multi-billion-dollar investments from established firms like Ford and Amazon, and the state of Georgia is giving as much as $1.5 billion in state incentives for Rivian to build a factory there.
Last month, Reason reported that after a successful November 2021 initial public offering (IPO) that saw its balance sheet swell to $18.1 billion in cash and a market cap of more than $150 billion, “Rivian’s stock lost 80 percent of its value, making it 2022’s worst-performing stock on the NASDAQ 100.” Additionally, by December 2022, “Rivian’s cash on hand had fallen 36 percent, to $11.6 billion.”
According to Bloomberg, the company’s market cap “now stands at less than $12 billion after a 93% stock wipeout, reflecting almost no value beyond the company’s cash hoard,” which it cited as “cash and equivalents of $11.6 billion and debt of $1.6 billion.” First-quarter revenue projections “have fallen more than 25% since the end of December.” And despite struggling to fill its own orders amid rising interest rates, the company may have to come up with even more cash, and quickly.
Ivana Delevska, chief investment o
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