The financial results for the second quarter (April to June) of three leading electric vehicle (EV) start-ups have been completed. The image is one corner, Rivian’s electric pickup truck “R1T”.
The financial results for the second quarter (April-June) of three leading electric vehicle (EV) startups, Rivian, Lucid, and Canoo, have been completed. It became clear that it is becoming increasingly difficult for each company to increase the production volume of its main models.
Common points highlighted by the three companies were supply chain and logistics issues, unexpected delays, and the difficulty of the “capital-intensive” process of getting operations off the ground.
In particular, Lucid and Canoe frankly admit that they deviated greatly from the original plan. The production volume of the former remained at a fraction of what was expected. The latter announced the current situation that it has no choice but to outsource the manufacturing of the number of units that will reach the delivery deadline at the end of 2022 to a third party.
The remaining company, Rivian, posted a net loss of $1.7 billion in the second quarter despite gradual progress in pre-order deliveries, and laid off a significant number of employees in July. I was laid off.
Pavel Molchanov of US financial services firm Raymond James explains:
“Establishing a supply chain, expanding production capacity, and building a large-scale factory are all challenges. And, to be honest, you have to have a certain amount of luck.
We asked four experts in the automotive industry for their views on the just-announced second-quarter financial results of the three companies and their forecasts for the third and fourth quarters.The composition of Rivian ‘getting out of the horse group’ has come into view.
Lucid’s task is to rebuild the system
Lucid Motors unveiled the Lucid Air in early August with an optional “Stealth Look” paint job.
Lucid Motors CEO Peter Rawlinson said at the company’s second-quarter financial results briefing that the reason for the company’s shortfall in production was “due to logistics constraints, the number of units produced did not lead to an increase in
Rawlinson also said that in addition to failing to introduce parts of the right quality to the production line at the right time as planned, the company’s thorough stance of maintaining a particularly high quality standard compared to other companies He said he made the hurdle even higher.
The number of vehicles delivered in the second quarter was 679 (half of which was delivered in April), which is a dismal result considering that the annual production target for 2022 was originally set at 20,000. It’s okay.Even from the first quarter, production was 1,405 units and deliveries were 1,039 units, far short of the target..
The factory was shut down for two and a half weeks during the period to install machine tools and relocate the warehouse.Further reduced the production target to 6000-7000 units.
The company, which is seen as a rival to Tesla,Second Quarter Sales of $97.3 Million, Cash and Cash Equivalents of $4.6 Billion, Backlog of 37,000 Units(worth $3.5 billion).
Ari Fagli, managing director of Guggenheim Securities (in charge of automotive market research), analyzes the current situation of Lucid as follows.
“To justify its $30 billion market cap valuation, we’d like a outlook that gives us strong confidence that the company can produce much higher volumes than it does today.
Although the reduction of the full-year production forecast to a achievable level is somewhat optimistic, even if we can achieve the revised downward target of 6,000 to 7,000 units, it will still lead to a higher level of production. The inference that we can expect a volume increase is not valid.”
According to CEO Rawlinson, the second quarter “exposed the immaturity of the logistics process.” decided to move.
Additionally, Lucid is restructuring its management structure with a focus on improving logistics processes.
Vice President Global Logistics Walter Ludwig (former Mercedes-Benz); Process Transformation Evelyn Zhang (ex-Tesla); Senior Vice President Operations Steven David (Fiat) (from Chrysler) and automotive industry veterans.
As an organization, we have improved efficiency and stability by placing supply chain, quality and logistics directly under operations (i.e. Ludwig and Chan report directly to David).
Rivian doing well
Rivian’s electric utility sports vehicle (SUV) “R1S”.
Rivian built 4,401 vehicles in the second quarter and delivered 4,467.Since the first quarter, 6,954 vehicles have been produced and 5,694 have been delivered.. Although it is behind schedule, it is making good progress toward its 2022 full-year production target of 25,000 units.
The company, in which Amazon owns 18% of the outstanding sharesSecond Quarter Sales of $364 Million, Cash and Cash Equivalents of $15 Billion, Backlog of 98,000 Units(Total of “R1T” and “R1S” as of June 30).
however,Full-year operating loss (loss before interest, tax, depreciation and amortization to be precise) widens from the forecast at the time of the first quarter results announcement, widening from $4.75 billion to $5.45 billionIt says.
Rivian Chief Executive R.J. Scarlinge and Chief Financial Officer Claire McDonough said during an investor briefing that the supply chain is in particular trouble.
Still, auto-industry pundits appear to be feeling good about Rivian’s second-quarter results.
Dan Ives, of Wedbush Securities, analyzed in an email to clients.
“Overall, production is on track and the full-year losses are expected to widen, while the order momentum that Wall Street analysts are watching is also picking up.
Immediately after the initial public offering (IPO), a horror show continued (the stock price fell by less than 90% compared to the highest price).It can be said that the team led by CEO Scaringe has put Rivian, which is regarded as the flagship of the EV industry, back on a growth trajectory and regained a clear momentum that will continue in 2023.
Supply constraints will continue to constrain the company, but the outlook for production beyond the third quarter is positive.”
Unstable business continues for canoes
Canoo is developing a Lifestyle Delivery Vehicle (LDV).
canoeSecond Quarter Reported Cash and Cash Equivalents of Only $33.8 Million, Net Loss of $164.4 MillionIt was a dangerous content.
At the financial results briefing, it was announced that production of the flagship model would start in the fourth quarter (October to December), but it would be difficult to achieve this without the support of other companies.
CEO Tony Aquila said at the briefing, “Partnered with a third party for temporary production consignment until our production facility is operational’” he explained the situation.
Canoe originally planned to start operations at the Bentonville plant (Arkansas) in 2022 and the Pryor plant (Oklahoma) in 2023. (At the time of the announcement of the first quarter financial results, it was announced that it would be delayed to early 2023 and 2024, respectively.) I have to).
According to Aquila CEO, the delivery of the first vehicle will be delayed to the first quarter (January to March) of 2023, and the model will be a commercial EV “Lifestyle Delivery Vehicle (EV)” ordered by Walmart, a major US retailer. LDV)” is given priority.
The order from Walmart is for 4,500 units (with options for up to 10,000 units), and production is scheduled to start early in the third quarter (July to September). Before the deal with Walmart was signed, Canoe said it wanted to produce between 3,000 and 6,000 units by the end of 2022.
Concerning the canoe, there was concern about the depletion of working capital, but at the time of the announcement of the financial results, the funding plan was confirmed again.
Screenshot from Canoo’s Q2 2022 earnings presentation. He appealed the enhancement of the fundraising plan.
As announced on the company’s first quarter earnings call, it entered into a $300 million prepaid subscription rights allotment agreement with Yorkville Advisors, of which $50 million ($50 million) was paid, and two The company is also planning a $300 million public offering, as well as a $300 million public offering using a comprehensive shelf registration system.
Sam Abuelsamid, of Guidehouse Insights, said smaller firms are at a disadvantage.
“Electric vehicle development is by any stretch of the imagination a capital-intensive business.
With a bear market soon to follow and rumors of a recession, all the smaller companies are on the verge of running out of cash.”
[Original: Rivian, Lucid, and Canoo’s brutal Q2 results show just how far they are from becoming ‘the next Tesla.’ Industry experts share 3 takeaways for where they go from here]
(Translation and editing: Chikara Kawamura)
Source: BusinessInsider
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