Electric vehicle start-ups Rivian Automotive and Lucid Group having reported Q4 and 2023 full year financial and operational performance, continue to show signs of supply chain and production challenges.

Both providers remain under the looking glass within an industry environment that has become highly competitive for garnering market share and profitability amid tepid demand for consumer focused electric vehicles along with higher interest levels to finance such vehicle. The ability to ramp up and sustain manufacturing output is a further challenge in order to generate needed cash to sustain operations.

Rivian Automotive

Last week, Rivian Automotive reported on the fourth quarter and full year financial performance that disappointed company investors. While progress was indicated against key business performance metrics, investors prompted a reported 25 percent decline in the company’s stock value.

Financial Performance

Rivian Founder and CEO RJ Scaringe indicated to investors that: “We made great progress in 2023 despite economic headwinds and we’re excited about the year ahead. We firmly believe in the full function to support our long-term growth.”

Financial performance headlines included the following:

  • Q4 total revenues of $1.32 billion along with full year 2023 revenues of $4.43 billion.
  • Q4 operating expenses increased by $975 million, as compared to $795 million in the year earlier quarter. Full year operating expenses were reported as $3.70 billion, compared to $3.73 billion in 2022.
  • Loss from operations in Q4 totaled $1.58 billion as compared to $1.72 billion in 2022. For the full fiscal year, loss from operations was $5.74 billion as compared to $6.86 billion in 2022. That stated, the company release indicated that gross profit per delivered vehicle improved to upwards of $81,000 as compared to Q4 of 2022 because of improvements in operating efficiency.
  • Net loss in Q4 was $1.52 billion compared to $1.72 billion in the year-earlier period. For the fiscal year 2023, net loss was reported as $5.43 billion compared to $6.75 billion in 2022.

Rivian’s liquidity at the end of 2023 was reported as $9.27 billion in cash, cash equivalents and short-term investments compared to $10.47 billion of total liquidity at the end of 2022.

In conjunction with the latest financial performance, the company was compelled to initiate an additional 10 percent cut in the company’s workforce.

Operational Performance

In fiscal 2023, Rivian produced 57,232 vehicles and delivered 50,122 vehicles, which met the company’s stated goal for 2023 production. Reportedly, 13,972 vehicles were delivered in the final quarter.

The above compares to 20,322 vehicles delivered in fiscal 2022, over half of which, 10,020 vehicles, were delivered in the final quarter of that year.

In March of 2023, Supply Chain Matters highlighted a report indicating a manufacturing reorganization with Rivian. The move included the relocation of portions of the start-up’s manufacturing engineering team to be directly resident at the company’s Normal, Illinois production facility, as opposed to corporate headquarters in California. Given the 2023 production and delivery performance, the management change appears to have made a difference.

The company’s forecast for expected vehicle output for fiscal 2024 is 57,000 vehicles, similar to what was produced in fiscal 2023. A year ago, the stated objective was to be able to produce 85,000 vehicles in 2024. A lot has occurred since that forecast.

 

Lucid Group

Luxury EV auto maker Lucid Motors also reported both Q4 and 2023 financial and operational performance that has disappointed investors.

Financial Performance

Lucid CEO and CTO Peter Rawlinson indicated in the latest financial performance release: “Lucid is investing for the long term in technology, manufacturing and partnerships to further solidify our place in the market as the premier luxury EV brand in the world. In 2023, we made our first strategic technology arrangement, gained market share, completed the Air lineup, and unveiled Gravity. As we start 2024, I’m very excited about the year ahead and beyond. We are entering the next transformational phase of the Lucid vehicle lineup and are laser-focused on growth.”

Financial performance highlights included:

  • The quarterly Q4 revenue of $157.2 million declined from the $257.7 million in revenue reported in the year earlier period. Full year 2023 revenue of $595.3 million compared to $608.2 million reported in 2022.
  • Operating loss amounting to $736.9 million in Q4 compared to $749.8 million loss in the same year ago period. Annual operating loss in 2023 amounted to $3.2 billion, compared to $2.6 billion reported for 2022.
  • Net loss was reported as $2.8 billion in 2023 compared with a $2.6 billion operating loss in 2022.

This EV auto maker ended Q4 with a reported $4.8 billion in total liquidity. A management presentation indicated that liquidity is sufficient to carry the company into 2025.

Operational Performance

In the final quarter of 2023, Lucid produced 2,931 vehicles and delivered 1,734 vehicles. For the full year, the luxury EV auto maker produced 8,428 vehicles, compared to 7,180 vehicles reportedly produced in 2022.

The company’s forecasted outlook for production levels in 2024 is upwards of 9,000 vehicles.

The company’s management team consists of executives with a track record for bringing industry disruptive products to market, including the Tesla Model S luxury sedan. The top of vehicle line-up, the Lucid Sapphire has what is described as 1,234 horsepower and a battery driving range up to 427 miles.

From a pricing perspective, the 2024 Lucid Air has a sticker price starting at $71,400 and ranges up to $250,00 depending on added trim and luxury options

What further makes Lucid so unique is a core EV technology that is created in-house, and a dedicated production facility in Arizona where this auto maker produces its own electric motors, transmission systems, power electronic inverters, and battery packs.

Added Perspectives

We have contrasted Rivian and Lucid because both of these auto makers came to market with the notion of being the industry disruptor, particularly at the premium and luxury line up of vehicles.

Rivian is unique in that the company designs and produces EV powered delivery vans, and has a supply agreement with Amazon, which is also a minority shareholder in Rivian.

Business broadcasting network CNBC in its reporting of the EV industry financial performance cites data from Cox Automotive that indicates that Rivian and Lucid represent but a fraction of EV sales, compared to industry leader Tesla, which reportedly controls 55 percent of market sales.

Such niche players would be able to financially sustain themselves if demand for respective products were robust and that supporting supply chain and production strategies are well managed. Instead, the EV segment remains challenged, and so is this industry’s supply networks.

As Tesla continues its strategies for aggressively seizing market share by reducing prices, and with China based producers poised to export innovative EV vehicles globally, this industry has a good amount of challenges to address in the coming months.

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