Rivian Delays Delivery Again, Musk Forecasts Bankruptcy
In an email, Rivian told R1S (SUV) customers that their preorders would not be fulfilled by July as planned. Instead, they might have to wait as long as December. Meanwhile, Elon Musk — surprise surprise — posited the company ‘will go bankrupt’ unless something changes.
There’s no mistaking that Rivian has attracted a lot of attention since it introduced “the world’s first off-road electric pickup truck” back in 2018. Some of the hype has registered as great news for the company, but not all of it.
The most recent splash Rivian made in the EV market more than likely falls in the latter category.
On Tuesday, the company emailed customers awaiting the long-anticipated R1S SUV that they’d have to keep waiting. Rivian previously promised to deliver the R1S by this June or July. But the email, which some reservation holders reportedly did not receive, pushed that promise out as late as December.
After first announcing the vehicle and making it available for preorder in 2019, Rivian unveiled the R1S in late 2021. It then promised first deliveries of the SUV in January 2022. By November, it had already announced the first round of delivery delays.
The company attributed the latest hangup to ongoing supply chain issues and its limited service infrastructure. It said that it would first prioritize deliveries to areas near Rivian’s few service centers. The company currently operates those facilities in just 14 states, so customers in other areas could face an even longer wait.
“As we’ve continued to navigate a tight supply chain, we’ve had to reduce complexity wherever possible, including prioritizing certain build combinations over others,” the email said.
The announcement especially inflamed some buyers in remote areas, further removed from Rivian’s physical presence. One customer on the company’s forum lampooned “[t]he irony of an off-road adventure vehicle delivered only to major cities.”
Rivian’s Battery Keeps Draining
It’s another fly-in-the-ointment for Rivian’s troubled SUV project. Its first production vehicle, the R1T truck, garnered some glowing reviews (including from GearJunkie) and helped propel the company to titanic financial status. (At one point, with only a tiny amount of production trucks on the road, it swelled to a valuation even more massive than Ford and GM.)
But buyers of both the truck and the R1S went ballistic in March when the company proposed substantial price hikes for each vehicle. The announcement caused Rivian (RIVN) to tank on Wall Street, and CEO RJ Scaringe even said it “broke the trust” the company had established with its buyers.
Rivian Retreats on Price Hike After Buyers Rebel
Rivian dropped the price hike for existing customers amid the backlash. But now in the face of the new delivery delay, it’s bound to face more public relations headwinds. And plunging stock prices (down 75% since a December spike at $115 per share) still haven’t significantly recovered.
Right on cue, Tesla CEO Elon Musk took an opportunity to offer a forecast on the company’s future in a podcast on Tuesday.
“Unless something changes significantly with Rivian … they are tracking toward bankruptcy,” he said in the interview with Tesla Owners Silicon Valley.
It’s always a little hard to tell what Musk is really up to; does that amount to a valid market insight or a swipe intended to destabilize rival Rivian stock prices?
Potshot or prophecy, one thing’s clear: Rivian needs to stop overpromising and underdelivering.
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