Rivian Automotive ( RIVN -0.35% ) the stock fell Friday morning, losing nearly 4.6% in the first hour of trading before gaining ground. Electric vehicle (EV) stock was already under pressure this week after Rivian’s expansion plan ran into hurdles, and it looks like some of the things CEO RJ Scaringe just said during Wolfe Research virtual global auto, auto-tech and mobility conference failed to lift investor morale.
One of the biggest challenges Scaringe highlighted at Thursday’s conference was the current shortage of semiconductor chips, according to Reuters. The supply constraint was the main reason Rivian missed its 2021 production target of 1,200 vehicles, and its shares were hit hard afterwards.
Investors are now hoping to see the chip supply crisis – which began in 2020 and hit the auto industry the hardest – ease in 2022. Unfortunately, Scaringe thinks the chip shortage could last for the rest of the year. year, even as the company tries to navigate other headwinds, such as labor constraints.
Scaringe also revealed that Rivian idled its assembly plant in Normal, Illinois for 10 days in January. While this could mean lower production and deliveries, it should only be a one-time setback and end up working in Rivian’s favor as the company has idled the plant just to upgrade its production lines. production to increase capacity. Last quarter, Rivian announced plans to increase annual production capacity from 150,000 vehicles to 200,000 vehicles at its Normal plant.
In December, Rivian also announced plans to set up a second US manufacturing facility in Georgia, with an annual production capacity of 400,000 units. The plant, however, has faced opposition from local residents, as reported this week, with state authorities now taking charge of project approvals.
The chip shortage is a real concern, and the hurdles to Rivian’s normal factory expansion have only added to the many questions investors are already seeking answers from the company when it releases. its quarterly figures on March 10. Scaringe, however, also just said that Rivian is aiming for a 10% market share in the electric vehicle market by 2030.
The company’s R1T pickup won the 2022 MotorTrend Truck of the Year award, so expectations are high. Now it’s up to the company to earn investor confidence on March 10, as it’s the day that could largely decide the next direction for Rivian’s stock.
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