‘The expectation was that they would do a capital raise next year. This blindsided investors,’ analyst says
Rivian Automotive Inc. reminded investors just how costly it is to make its electric vehicles, and how much money they will need to continue making them.
While Rivian had mentioned an eventual debt offering during its earnings call in August, the timing was much sooner than expected, causing investors to get more nervous about how fast it is burning through cash. It had $10.2 billion in cash and equivalents in the second quarter and the company ended the third quarter with about $9.1 billion. In addition, it gave a sales outlook Wednesday that was pretty much on target with Wall Street’s current estimates.
Rivian is currently building a manufacturing plant outside of Atlanta, to the tune of $5 billion, which is much larger than its current plant in Illinois. But the automotive industry is extremely competitive and cash-hungry. Nelson pointed out that prior to the emergence of Tesla Inc. TSLA, -0.43%, the last new entry in the U.S. market to survive was Chrysler, now owned by Stellantis STLA, +0.75%, in the 1920s.
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