Michael Wayland / CNBC NORMAL, Ill. – Rivian Automotive CEO Robert Scaringe comes out of an R1T electric pickup outside the company’s factory in downtown Illinois as a man shouts, “RJ, RJ!” Scaringe, who says these initials, turns to the male clerk who thanks him for working in Rivian’s huge factory. The 39-year-old founder of the company reciprocates the appreciation and offers a handshake before going to a meeting with suppliers. The admission was one of many that included punches, waves and other heartfelt demonstrations during a recent half-day visit to the media factory and Scaringe, whose daily office is located inside the former Mitsubishi Motors facility. . They are pleasant, but also signs of trust in the CEO in view of the terrifying challenges for the manufacturer of electric vehicles. Wall Street has also applauded Scaringe, who founded the company in 2009 and made it public through a major IPO in November. More specifically, Morgan Stanley chief automotive analyst Adam Jonas described the Rivian as “the one” who could compete with industry leader EV Tesla. Production of Rivian R1T electric trucks on April 11, 2022 at the company’s plant in Normal, Ill. Michael Wayland / CNBC But Rivian, like the rest of the auto industry, is facing huge supply disruptions and internally faced expected but still problematic production hurdles that made it lose its production expectations last year. The company’s share price has fallen more than 60% this year as investors seek safer ground from an EV boot amid fears of a recession. See what Scaringe had to say about the company’s production, spare parts shortages and more.
Disorders of production and suppliers
Scaringe said Rivian remains “really confident” that it can produce 25,000 vehicles, including the van and R1, by 2022. That estimate is lower than initial expectations for about 50,000 vehicles, which were cut from supplier breaks. The rarity in semiconductor chips, a shortage that the automaker has been facing for more than a year now, and the wire belts that act as the nerves of a vehicle are the biggest obstacles for the company. Both are critical components in vehicles. Production of Rivian R1T electric trucks on April 11, 2022 at the company’s plant in Normal, Ill. Michael Wayland / CNBC “The vast majority of our vehicles have no supply chain restrictions. It’s just a small percentage,” Scaringe said. “It does not take more than one piece to stop production.” Scaringe does not expect semiconductor supplies to be normalized by next year. He, along with every other executive in the automotive industry, is in regular contact with suppliers who try to procure, produce and ship as many spare parts as possible. For Rivian, this includes having some of its employees at its supplier facilities in an effort to assist production. “We have no demand challenge at all. We have a challenge ‘we can create enough vehicles,’” he told CNBC after a tour of the vehicle factory. “We have a supply chain problem. It’s disappointing, but we will get over it. “ Michael Wayland / CNBC Rivian says trucks can be produced faster than R1T and R1S consumer vehicles because they have fewer features. They also go through fewer processes in the factory. For example, painting trucks – a tedious and time-consuming process – takes two hours less than painting other vehicles. Victor Taylor, senior director of sealing, body and plastics for the company, also noted that less complexity and time is required for trucks in the body shop.
EV with lower price
To the disappointment of bookers, Rivian raised prices for its vehicles last month due to higher freight costs. The company quickly withdrew the increases for its 70,000 existing booking holders, but said it would maintain new pricing for new bookings made from March 1st. The increases make the starting prices of the vehicles $ 67,500 for the R1T and $ 72,500 for the R1S. At these prices, both are considered luxury vehicles rather than mainstream models. Michael Wayland / CNBC Scaringe said the company plans to produce lower-priced vehicles on the next-generation EV platform. These vehicles will be produced at a planned $ 5 billion plant in Georgia, which is expected to hit the internet in 2024. Like other automakers, Rivian also plans to maximize profits and increase the performance of current models, according to Scaringe.
End of natural gas vehicles
It’s the beginning of the end for fossil fuel-powered consumer vehicles – as far as Scaringe is concerned. The 39-year-old believes that the production and sales of such vehicles will end in his life, sooner rather than later. Without giving an exact date, Scaringe said the end of that era is probably closer to 20 years from now than to 50 years, with companies being forced to move away from fossil fuels out of necessity as well as possible pressure from the Wall. Street and regulators. . “Most countries around the world will stop selling gasoline-powered cars. The scale of the change is difficult to fully assess,” he said. “The challenge is whether it is politically driven or not. The companies that are going to survive are the ones that recognize that the final state of combustion is zero.” Rivian RJ Scaringe CEO’s inside the company’s customer experience center outside its factory on April 11, 2022 in Normal, Ill. Michael Wayland / CNBC
SPAC
Rivian is one of a number of start-ups that have been listed on the stock exchange in recent years, but the company’s competitors have done so through agreements with special purpose acquisitions or SPACs. Rivian made a traditional and more immediate initial public offering. Many companies that followed the SPAC path had financial problems or received inquiries from the US Securities and Exchange Commission about their public or other business arrangements. Scaringe believes that some of these companies will not be competitors that Rivian needs to worry about much more. “As financial markets shifted from a growth orientation to a more value orientation, I think a lot of these really underfunded SPACs and companies like these will slowly start to disappear,” he said. “They will run out of capital.” Production of Rivian R1T electric trucks on April 11, 2022 at the company’s plant in Normal, Ill. Michael Wayland / CNBC
Specially made autonomous vehicles?
Tesla CEO Elon Musk recently announced that the car company will build a “dedicated robotaxi”. It did not offer a schedule or additional details other than that it would “look futuristic” and be completely self-driving, something the company has not achieved despite the name of the “Full Self-Driving” (FSD) driver assistance facility. . Rivian has not announced plans for a similar vehicle and Scaringe would not comment immediately. However, he said the company would “offer many different products in the future”. Scaringe, who moved from Southern California to the nearby 3.3 million-square-foot factory, is known as a rushing, horizontal designer who usually lets his actions speak louder than his words (or tweets). It’s a different style from Musk, although both are considered highly detail-oriented and ambitious leaders.
EV pickups
Rivian became the first automaker to start mass production of an all-electric pickup truck last year, surpassing Tesla and long-time leaders General Motors and Ford Motor, which owns about 12% of Rivian. GM began shipping the GMC Hummer EV pickup in December, months after Rivian introduced the R1T. Ford is expected to begin shipping an electric version of the F-150 pickup called the F-150 Lightning soon, followed by the long-delayed Tesla Cybertruck, which is scheduled to go into production next year. Production of Rivian R1T electric trucks on April 11, 2022 at the company’s plant in Normal, Ill. Michael Wayland / CNBC While many comparisons have been made of the Rivian R1T with other electric pickups, the Scaringe is not bothered by the competition. Really welcomes it, for now. He believes that at the moment there is more than enough demand to meet EV pickup production in the short term. “People love winners and losers, as everything in life should be a zero-sum game,” he said. “I really do not see it that way … I see it as I hope Hamer is very successful. I really do. I hope Lightning is very successful and I hope we are very successful. And I think all three of that can happen the view of spiritual sincerity “.
