Rivian vs. Tesla

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Will Rivian (RIVN) eventually become a formidable competitor to Tesla (TSLA)? Maybe, but in the distant future.

Investors are trying to size that up following the EV maker’s Q2 results. Shares wobbled between gains and losses after-hours, though largely remained near the $40-level, in a similar story that has taken place since the company went public in November. IPO hype initially saw the stock hit as high as $180, before starting to gradually decline to a lower evaluation, even touching lows of under $20.

First off, Rivian lost $1.7B during the quarter, which is a great deal of money even for a company that is in the early stages of production. That puts it in a place to conserve cash and hustling to fill customer purchases, with around 98,000 pre-orders on its books from customers in the U.S. and Canada. With regards to guidance, Rivian still expects to record a whopping $5.5B EBITDA loss in 2022, up from the $4.8B estimate it disclosed three months ago.

“We’ve seen unprecedented levels of inflation, especially across our raw material inputs and lithium prices,” announced CFO Claire McDonough. “We’ve also experienced increased costs in regard to our expedited freight expenses.”

Outlook: Despite building fewer than 7,000 vehicles in the first half, Rivian reaffirmed its goal of producing 25,000 EVs this year (a second factory shift will be added by the end of the current quarter). The EV maker also said its current models will not be eligible for new federal tax incentives passed in the Inflation Reduction Act, but it could bag subsidies of up to $40,000 per vehicle for the large electric commercial vans it’s building for Amazon (AMZN). Rivian currently produces the R1T electric pickup, while the smaller and less expensive R2 SUV is due out in 2025.