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Rivian Takes A Serious Hit For One Key Reason

Dec. 17, 2021 4:17 PM ET by Jay Traugott Electric Vehicles / 2 Comments There's a lesson to be learned here. Rivian's IPO last month was all over the news for a good reason. Valued at over $77 billion, it was suddenly thrust into the stratosphere alongside the likes of GM ($85 billion) and Ford ($80 billion). The Blue Oval is one of Rivian's key backers and it too scored a solid return on its investment. But the party at Rivian is winding down somewhat as reality sets in. The electric truck and SUV company, whose only two products (for now) are the R1T truck and R1S SUV, admitted this past week it failed to meet its third business quarter vehicle production target. The stock market immediately reacted. By Friday morning, Rivian shares took a nosedive by 15 percent, a new low since its November 10 IPO. Rivian Rivian Rivian This is also the first time Rivian shares have dipped below $100. Rivian acknowledged it'll fall a few hundred units short of its 2021 production goal of 2,100 vehicles. "Ramping up a production system like this, as I said before, is a really complex orchestra," said Rivian CEO R.J. Scaringe. "We're ramping largely as expected; the battery constraint is really an artifact of just bringing up a highly automated line, and, as I said, it doesn't present any long-term challenges for us." The good news is that Wall Street and industry analysts expected there could be some production issues. Rivian Rivian © 2018 Ben Moon Rivian is a new automaker and it's immensely challenging to get the ball rolling. Just ask Tesla, which is now the world's most valuable automaker with around a $1 trillion valuation. Rivian's stock drop is probably only temporary and there are already signs of recovery. Rivian says that as of the middle of this month, the number of reservations for the R1S has increased from 55,400 in November to 71,000. The company admitted this increase is higher than expected. Earlier in the week, Rivian announced plans to build a new $5 billion plant in the state of Georgia. Production is expected to get underway in 2024. Rivian Rivian Rivian

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