Rivian was once seen as “the next Tesla,” an electric vehicle maker poised to grow rapidly and unseat century-old auto giants like Ford Motor, General Motors and Volkswagen. He planned to make an electric pickup and a sport utility vehicle — models that would set him apart from the minimalist electric cars produced by Tesla.
The company has earned billions of dollars thanks to backing from investors such as Ford and Amazon, which announced plans to buy 100,000 electric delivery vans from Rivian.
Rivian’s IPO was the biggest of 2021, and within days its share price skyrocketed. For a time, the company’s market value was greater than that of Ford and General Motors combined.
But difficulty sourcing critical computer chips and manufacturing issues at its Normal, Ill., plant kept output well below what the company had hoped for. He also struggled to build delivery vans for Amazon. Rivian’s share price has fallen and investors remain concerned about the company’s prospects.
Now, as production increases, it faces a tougher competitive landscape. Ford has started manufacturing an electric pickup, the F-150 Lightning, which is expected to overtake Rivian in sales by the end of the year. Ford, Volkswagen, Hyundai and several others have increased their sales of electric SUVs, and GM has announced that it will start selling an electric version of its Chevrolet Silverado pickup and a pair of electric SUVs next year.
Buyers of some of Rivian’s vehicles are also expected to soon lose access to a federal tax credit under the climate bill the House is expected to approve Friday; the Senate passed it on Sunday. Under the bill, purchases of vans, SUVs and pickup trucks that sell for more than $80,000 will not qualify for tax credits. The credits will also not be available to individuals or couples who earn more than $150,000 or $300,000 per year.
Rivian said last month it was laying off about 6% of its 11,500 employees. “To realize our full potential, our strategy must support our sustainable growth as we move toward profitability,” Mr. Scaringe said in a letter to employees. “We need to be able to continue to grow and scale without additional funding in this macro environment.”