Rivian generated $95 million in revenue for Q1 2022, reporting a negative gross profit of $502 million. The EV startup also revealed that it produced 2,553 vehicles in the first quarter and delivered 1,227 cars.
Rivian stated that it would continue to experience negative gross profit related to labor and overhead costs but expects it to improve once it ramps to higher production volumes.
“Additionally, we recorded a lower cost [sic] or net realizable value (“LCNRV”) adjustment to reflect the amount we anticipate receiving upon vehicle sale (after considering future costs necessary to ready the inventory for sale) and losses on firm purchase commitments. These expenses negatively impacted gross profit in the first quarter of 2022 by $188 million,” noted Rivian in its Q1 2022 Shareholders Letter.
Supply Chain Challenges
Rivian also noted that it experienced increased logistics costs caused by supply chain challenges. The company believes supply chain constraints will be a limiting factor to its production. However, it reaffirmed its 2022 annual production target of 25,000 vehicles. Rivian believes that its plant could produce two times the currently expected output for the remainder of 2022, if supply constraints were resolved.
As of May 9, 2022, Rivian has produced ~5,000 vehicles since the start of production. The planned total annual capacity between the Normal and Georgia facilities is ~600,000.
Preorders and Prices
Rivian reported more than 90,000 R1 net preorders in the United States and Canada, as of May 9, 2022. The Rivian brand attracted organic growth and awareness without any paid marketing or media. Rivian also noted that it received 10,000 R1 preorders in the US and Canada, despite raising prices. The average price for an R1 vehicle is over $93,000.
Rivian updated its reservation system due to supply constraints and the rising prices for raw materials and other production costs. The new preorder process will separate reservation and configuration steps. New customers can reserve their vehicle but can only browse through configuration options. Preorder holders can save specific configurations when their build slot’s date is closer.
“This change ensures that when a build is configured, the customer is choosing from the latest features, packages, and pricing. This new reservation system equips us to better navigate managing a large demand backlog with inflation uncertainties, planned content changes, and enhancements to ensure customers are offered the latest product offerings,” wrote Rivian in its report.