tesla Rival Rivian won or lost. for a moment This week, the company unveiled its latest model, the R2 SUV. Judging by the jump in stock prices, things seem to be going well.
Since Thursday’s events, the Amazon-backed electric car maker’s market value has jumped more than $1.7 billion. It remains to be seen whether it will fall again as investors reconsider, but the initial reaction meant a much-needed boost for the struggling EV maker.
Last month, Rivian reported disappointing quarterly results and guidance and announced it would cut its salaried workforce by about 10%. Its market capitalization has plummeted from a peak of $153 billion in 2021 to $12.5 billion today.
Gene Munster, managing partner at Deepwater Asset Management, recently considered the possibility of: Apple acquires Riviansaid the company needed to do “something big” after low valuations and tech giants canceled their EV projects.
Tesla CEO Elon Musk said last month He said Rivian’s product design was “not bad,” but added, “The real challenge of running a car company is achieving mass production with positive cash flow.” He suggested that rivals would go bankrupt within six quarters unless they made fundamental changes, saying they needed “significant cost cuts.”
On Thursday, Rivian showed it was ready to do just that, surprising many by announcing it was delaying plans to build a $5 billion factory in Georgia. Instead, the new model will be manufactured at an existing factory in Illinois, saving more than $2.25 billion in capital investment.
deutsche bank Analyst Emmanuel Rosner Said He told Reuters that Rivian appears to have enough cash on hand to sustain R2 production and that the move will “relieve considerable pressure on raising capital in the short term.” .
Rivian surprised investors with other unexpected news Another model also unveiledThe R3, a small and inexpensive compact SUV, will be produced after the R2. Also unveiled was the stronger and more rugged R3X.
CEO Robert “RJ” Scaringe joked, “We never expected ‘another one’ to happen here,” referring to the late man’s tendencies. apple Co-founder Steve Jobs will make last-minute product announcements after the keynote speech.
in X Scaringe wrote in a post Friday that within 24 hours, the company had received more than 68,000 reservations for R2 starting at $45,000. He added that the company was “overwhelmed” by the response to the new car.
But the fact remains that Rivian has never been profitable, still loses money on each vehicle it makes, and overall EV sales are growing at a slower pace than industry expectations.
After a difficult few months, Rivian had a productive Thursday and Friday. It remains to be seen whether this is a temporary event or a turning point.
This story was originally Fortune.com
