Rivian Reports First Quarter Loss; Ford sells a large part of its shares
May 12, 2022
As electric vehicle maker Rivian announced its first quarter financial highlights, Ford revealed it had sold 8 million shares of its stake in the company, leaving the automaker with 10.5% of the shares of Rivian as the fourth shareholder, according to Reuters.
Rivian says it produced 2,553 vehicles during the quarter, delivering 1,227 and generating $95 million in revenue. It generated a negative gross profit of (502) million dollars.
The company summarized its position in a letter to shareholders.
“While we produce low volume vehicles on production lines designed for higher volumes, we have and will continue to experience a negative gross margin related to significant labor and overhead costs. This Momentum will continue in the near term, but we expect it to improve on a per-vehicle basis as production volumes grow faster than future increases in labor and overhead costs.
“In addition, we have recorded a lower adjustment to cost or net realizable value (“LCNRV”) to reflect the amount we expect to receive upon sale of the vehicle (after taking into account future costs necessary to prepare inventory for sale) and losses on firm purchase commitments These expenses negatively impacted gross profit by $188 million in the first quarter of 2022. In addition, we expect these items to continue negatively impact operating results in the short term. We also experienced increased logistics costs due to expedited freight associated with supply chain challenges.”
Sources: Rivian, Reuters