Rivian has captured the world‘s attention as it leads a new breed of electric vehicle (EV) startups challenging old-guard automakers. But ambitious plans require huge amounts of capital. Let‘s dive into the financial profile of this fascinating company!
Rivian At a Glance
Before analyzing Rivian‘s finances, let‘s recap what they do:
- Founded in 2009, first vehicles delivered in 2021
- Making electric pickup trucks, SUVs, delivery vans
- Raised nearly $10 billion even pre-IPO
- Partnership with Amazon for custom electric vans
- Expansion into Europe signals global ambitions
With this hyper-growth strategy, Rivian‘s cash reserves are extremely important to track. Running out of cash could severely limit their capabilities.
The Road to IPO Riches
Rivian has attracted giant investments in recent years:
| Date | Funding Received | Major Investors |
|---|---|---|
| July 2021 | $2.5 billion | Amazon, Ford |
| January 2021 | $2.65 billion | T. Rowe Price, Fidelity |
| July 2020 | $2.5 billion | T. Rowe Price, Amazon |
| December 2019 | $1.3 billion | T. Rowe Price, Ford |
| February 2019 | $700 million | Amazon |
- Over $9.6 billion raised even before the much-anticipated IPO
- Big backers include strategic partner Amazon and automaker Ford
The November 2021 IPO brought an immediate cash infusion, raising $12 billion to fuel Rivian‘s ambitious growth.
So how has Rivian‘s cash stash evolved since then?
| Date | Cash Position | Context |
|---|---|---|
| June 2022 | $15.46 billion | Sold shares post-IPO to boost cash |
| March 2022 | $18 billion | Share sales also increased Q1 2022 cash |
| December 2021 | $18.4 billion | Closing cash after successful IPO |
However, Rivian‘s cash burn rate has also rapidly accelerated as the company ramps up:
- Q2 2023: $1.6 billion cash burn
- Q1 2023: $1.5 billion cash burn
- Q4 2022: $2.3 billion cash burn
At this quarterly burn rate of ~$1.5 billion, Rivian risks flaming through its $10 billion cash reserves within 2 years. Cutting costs and avoiding further share sales crucial next steps.
How does Rivian‘s cash stash compare to rivals?
Rivian has less cash than EV juggernaut Tesla but more available funds than Lucid and Nio. However, Rivian‘s cash burn rate highest among major startups.
Where‘s All the Cash Going?
Rivian funnels billions into initiatives vital for sustainable growth:
R&D:
- ~$444 million spent here in Q2 2023
- Focus areas:
- Improving battery costs/range
- Upgrading vehicle computing systems
- Expanding model ranges
- Robust R&D can cement technological leadership
Production Expansion:
- Adding second shift at Normal, Illinois plant
- Labor force growing over 50% quarterly
- Localized supply chains for cost efficiency
- Scale enables lowering per-vehicle cost
Charging Infrastructure:
- Partnership announced with Tesla on charging compatibility
- Opens access for Rivian owners to Tesla‘s 12,000+ Superchargers
- Alleviates driver range anxiety as sales expand
Global Growth Ambitions
Beyond just boosting production, Rivian is expanding internationally by leveraging key partnerships:
Amazon Delivery Van Deal:
- Announced plans for over 300 Electric Delivery Vans in Germany
- Amazon seeking to electrify last-mile fleet across Europe
- Leverages Rivian‘s proven van capabilities
- Follows initial 100k van order in US from Amazon
More Strategic Deals Possible:
- Rivian potentially licensing vehicle skateboard platforms to other automakers
- Would allow focusing on own vehicles while still monetizing technology investments
- Discussions speculated but no deals confirmed yet
Can Rivian‘s Cash Fund Growth?
Rivian has rapidly built capabilities to compete long-term in the EV space. But ambitions require billions in ongoing investments, while sales still relatively low.
Positives:
- $10 billion current cash reserves still provide substantial runway
- Amazon van order and potential licensing deals offer revenue
- Global expansion taps into larger addressable markets
Risks:
- Alarming cash burn rate of ~$1.5 billion per quarter
- Would exhaust cash in under 2 years at current spend
- Additional capital raises may face challenging market conditions
Balancing growth plans versus financial discipline will require deft management. But Rivian remains an enticing electric vehicle startup brimming with potential.
