Rivian lost $1.7 billion in three months
Rivian lost $1.7 billion in three months, but it is not a big problem considering that the company has $15.5 billion in cash and popular vehicles like the R1S SUV and R1T pickup truck, both of which have received positive reviews, with the R1T being named the MotorTrend Truck of the Year.
If Rivian can maintain its speed, it appears to have an equal chance with Tesla’s American competitors.
According to some experts, Rivian has a backlog of close to 100,000 orders. Additionally, Rivian intends to build a $5 billion plant in Georgia that it claims will be able to produce 400,000 cars annually. Richard Langlois, a professor from Connecticut who has researched the economic history of technology, claims that significant losses are not unusual when adopting new technologies.
In scaling up, it’s not uncommon to experience significant losses.
As it pushed to create the Model 3, Tesla, for instance, lost $717.5 million in the second quarter of 2018. It still had $2.2 billion in cash after the losses. Despite Rivian’s loss, investors haven’t reacted harshly. Following the announcement, the stock increased little on Friday.
We think Rivian is well-positioned to take advantage of the enormous increase in both current and future EV demand.