Rivian stock drops on hints of vehicle production issues

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Stock in electric truck start-up

Rivian Automotive

fell Tuesday due to two issues impacting the same key success factor for the company: vehicle production.

Shares of Rivian (ticker: RIVN) fell about 3% and traded below USD 79. The stock fell about 1.5% in early trading at $80.26. The

S&P 500
and

Dow Jones Industrial Average
decreased by 0.3% and 0.5% respectively.

For starters, investors are nervous about the departure of the company’s chief operating officer, Rodney Copes. His profile on the professional networking site LinkedIn said: he is retired from Rivian.

That news hits stocks because it was a surprise. The company has not issued a press release or filing announcing the departure.

In addition, Rivian is on the cusp of ramping up production of its first product, the R1T pickup truck, at its first plant in Illinois. Increasing production is a task overseen by each chief operating officer. It is not known if anyone has taken his place.

Neither Copes nor the company responded to a request for comment on his departure.

Jimmy Knauf is Rivian’s vice president in charge of facilities. He started in November 2021. Charly Mwangic is the vice president in charge of manufacturing engineering. He joined Rivian in May 2020.

In addition to the departure of the operational chief, The Wall Street Journal reported that Rivian said it will be producing about 1,000 vehicles by 2021. In mid-December, CEO RJ Scaringe said the company’s goal was to make about 1,200 units by 2021. Rivian just came up short.

The pace of production is an important factor for investors to keep an eye on this year at Rivian. Wall Street expects the company to ship about 40,000 vehicles. That means production needs to ramp up from a handful of units per week to perhaps 1,500 per week by the end of the year. From there, production has to increase. Wall Street expects 100,000 deliveries by 2023.

Rivian’s Illinois plant has a design capacity of approximately 200,000 vehicles.

The Rivian share has had a difficult start to the year. In Tuesday’s trading, stocks are down about 21% so far in 2022. Rising interest rates have hit all growth stocks. The

Nasdaq composite
is about 4.5% lower.

Rivian shares are now just above its initial public offering price of $78 a share, about 55% lower than its November 52-week high of nearly $180 a share.

Write to Al Root at [email protected]