Rivian said it is on track to meet its goal of producing 52,000 vehicles by 2023. Rivian currently sells the R1T pickup truck and the R1S SUV.

For the quarter that ended Sept. 30, Rivian delivered a total of 15,564 vehicles, compared to Visible Alpha’s estimate of 14,740, an increase of 23.1% from the second quarter (12,640 vehicles).

Notably, the company produced 16,304 vehicles at its plant in Normal, Illinois, up from 13,992 in the second quarter. This means Rivian needs to produce just over 12,300 more vehicles in the quarter to reach its full-year goal.

▲Photo courtesy of Rivian

According to Cox Automotive, thanks to price cuts, the average price of a Rivian electric car has dropped to $53,376 in July 2023 (currently about RMB 390,000), compared to nearly $70,000 a year ago.

It’s worth noting that Rivian has also been trying to cut costs and move to in-house Enduro powertrain development to reduce its dependence on suppliers.

Despite the slowdown, there are positive signs of growth in the U.S. EV industry, which has become one of the fastest-growing EV markets, according to market research firm Canalys Research.

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Tesla’s global price cut of up to 20 percent on its electric cars last week may attract new buyers of electric cars in the sector, but it will also force other carmakers to respond with lower prices or risk falling behind, several analysts and investors said.

Some start-ups may not be able to afford the price cuts, while also grappling with a number of challenges, such as rising raw material and production costs, and far lower vehicle production than Tesla. Tesla delivered more than 1.3 million electric cars in 2022.

Garrett Nelson, an analyst at CFRA Research, a leading US investment bank, said Tesla’s move would “strengthen their competitive advantage over other carmakers”.

Today, most electric car startups are in a bad position, a far cry from the initial public offerings (IPOs) of the past few years. At the time, investors thought these companies would get a slice of the electric car market and receive excitingly high valuations like Tesla.

However, neither Rivian Automotive nor Lucid Group is yet profitable. Last year, the two companies delivered a combined 24,000 vehicles, and Rivian Automotive’s cost of goods sold last fiscal quarter was about 2.7 times its revenue, while Lucid Group’s cost of revenue was about 2.5 times its sales, as each vehicle cost more to build than the car’s selling price.

Despite this, Rivian Automotive ended the third quarter with $13.8 billion in cash, the most of any US electric car startup, and Lucid Group, which has the second largest cash reserve at $1.26 billion, raised another $1.52 billion in the fourth quarter.

This provides both companies with a fairly long production runway, while at the same time, Faraday Future and British electric car startup Armining are always looking to raise capital and warn that they may not be able to sustain operations until 2023.

Daniel Ives, an analyst at Wedbush Securities, said: “Electric car startups face a ‘Game of Thrones battle and will face a tough test in the next 12 to 18 months if they fail to meet their financial targets. In the face of M&A consolidation or even worse prospects, we expect there will be some losers.”

The balance sheet position of these companies is expected to become clearer when they report their fourth-quarter results.

Lucid Group, now headed by former Tesla executive Peter Rawlinson, has yet to announce whether it plans to launch a mass-market version of its electric car to compete with Tesla’s Model 3 and Model Y, which start at $44,000 and $53,000 respectively.

Rivian Automotive’s R1T electric pickup starts at $73,000, while the R1S SUV starts at $78,000. The company does not plan to sell mass-market vehicles based on the next-generation R2 platform, which is more spacious and less expensive to produce, until 2026.

Analysts said that just a few months before Tesla’s price cut, contract manufacturer Magna Steyr had just started production of Fisker’s Ocean SUV, which starts at $37,499, making it more vulnerable to the price cut. Fisker declined to comment on this.

Lordstown Motors, which sold a large number of its assets to contract manufacturer Foxconn in May to raise funds, said its electric pickup truck, the Endurance, would be launched only for the commercial fleet market.

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