Ecommerce giant Amazon joined Detroit based automaker Ford in reporting significant expenses from an investment in electric vehicle startup Rivian, as the company’s stock tanked from all-time-highs it reached around its IPO.
Amazon reported during its Earnings Call on Thursday that it lost $7.6 billion on its Rivian investment.
Shares of Rivian surpassed prices as high as $179.47 per share but have fallen over 75 percent since then.
Currently trading at around $31.77, Rivian’s losses come as the automaker fights to ramp its vehicles during supply chain shortages.
Rivian Automotive announced it produced 2,553 vehicles while delivering 1,227 of them during 2022’s first quarter, reaffirming its goal to build 25,000 all-electric cars this year.
The company is dealing with a growing order bank due to high demand for EVs, but chip and parts shortages have plagued the automaker from avoiding a tumultuous ramp-up process of its first few vehicle models.
Rivian has done a tremendous job of remaining resilient through an extremely impossible time.
Amazon has lived by Rivian for several years, investing billions in the company and even ordering 100,000 electric delivery vans from the automaker in 2019.
Rivian has started delivering the vans to Amazon, as well as R1T pickups and R1S SUVs, it said last quarter. However, it expects to be impeded by shortages and other bottlenecks for some time.
“Our path to EV leadership won’t be easy,”
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Rivian said in its Shareholder Deck.
“In the immediate term, we are not immune to the supply chain issues that have challenged the entire industry.
Those issues, which we believe will continue through at least 2022, have added a layer of complexity to our production ramp-up.”
Separately, in a 10-K filing from late March, Rivian told investors it expects to incur continuing losses for the foreseeable future.
“We have incurred net losses since our inception, including net losses of $0.4 billion, $1.0 billion, and $4.7 billion for the years ended December 31, 2019, 2020, and 2021, respectively,”
Rivian said in the filing.
“We believe that we will continue to incur operating and net losses in the future while we grow, including following our initial generation of revenues from the sale of our vehicles, which began with the R1T in September 2021 and the R1S and EDV in December 2021.
We do not expect to be profitable for the foreseeable future as we invest in our business, build capacity, and ramp up operations, and we cannot assure you that we will ever achieve or be able to maintain profitability in the future.”
Read more: https://www.teslarati.com/amazon-reports-losses-rivian-investment/
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