Rivian
Over the weekend, the news came that Ford would be selling 8 million shares with reports of another 13 million that could hit the market later this week. Even after this sale, Ford will continue to own around 94 million shares.
The news sent EV shares lower across the board and added to the carnage in growth and tech stocks. RIVN is now down nearly 80% since its IPO and is off by nearly 88% from it's all-time high of $180, a few days after its IPO.
For much of the past couple of years, RIVN was considered to be one of the most promising EV startups and was seen as a legitimate threat to Tesla and legacy automakers. This year, Rivian plans to produce 25,000 electric trucks and SUVs.
This is a downgrade from its earlier forecast of 50,000 vehicles due to supply chain issues and setbacks in setting up its production facility. Additionally, these issues are only likely to intensify as leaders in the EV industry like Tesla and NIO have shown that ramping up production is no easy task.
And, it's only likely to get more challenging as nearly every legacy automaker is aggressively pivoting towards EVs. This means more demand (and higher costs) for labor, materials, and battery components. In an inflationary environment, these costs will also be significantly steeper.
Finally, Rivian IPO'd and came of age at a time when investors were willing to invest in growth and reward companies that were doing the same. Now, investors have done a 180 and are focused on metrics like cash flow, margins, and net income.
Needless to say, this is not good for Rivian or any other company that is in the midst of a major growth initiative. The big winner of this may be Tesla
