Rivian won’t join EV price battle thanks to ‘robust’ backlog

Rivian Automotive CEO RJ Scaringe said the automaker is not joining the EV price battle started by Tesla Inc. earlier this year due to Rivian’s robust order backlog and the overall value of its vehicles at current price levels.

“We feel confident in the value proposition of what we’re delivering at our pricing levels today,” Scaringe said on the company’s fourth-quarter earnings call Tuesday.

While the current climate of higher interest rates generally reduces consumer demand, Rivian has an order backlog that will take until 2024 to fulfill.

“The demand backlog we have is very robust,” Scaringe said. “It gives us a clear line of sight well into 2024.”

He also noted that Tesla’s price cuts came after price increases for its vehicles last year. The Tesla cuts were also targeted in lower-priced segments where Rivian doesn’t yet compete.

Rivian no longer provides a number for its order backlog, but last November it reported 114,000 preorders in the U.S. and Canada. That number was for its consumer vehicles, the R1T pickup and R1S crossover. Rivian also has a long-term order for 100,000 EDV delivery vans.

In Tuesday’s fourth-quarter earnings report, the automaker said it continues to burn through cash but expects cost reductions and rising production levels will improve vehicle gross margins over time.

The automaker’s stock price fell about 10 percent in after-hours trading following the earnings report.

Rivian posted a $1.7 billion net loss in the fourth quarter and forecast full-year 2023 production of just 50,000 vehicles. That would be double its 2022 output, but still below analyst expectations.

The automaker said that supply-chain issues will limit production from its Normal, Ill., factory and that it has scheduled plant downtime to implement new technologies, including its in-house-made Enduro motor.

“Our Enduro motor is expected to provide cost and range efficiencies while expanding our addressable market,” Rivian said in its fourth-quarter shareholder letter.

The base trim of the R1T pickup will use the new Enduro motor to bring down costs.

The R1T starts at $74,800, with shipping, using the Enduro dual-motor configuration. The base version is available for preorder but is not in production yet. The pickup that’s currently available starts at $88,800, with shipping, using a quad-motor configuration from an outside supplier, and larger battery pack.

The Enduro motor also will be used in the EDV electric delivery vans Rivian will produce for Amazon, along with a new lithium-iron-phosphate battery pack to save costs.