Rivian stock sinks on delivery woes, cheaper R1T trucks with LFP battery to be released in 2024

Rivian's stock took a nosedive again after it announced its quarterly earnings, losing as much as 13% and sinking to a new post-IPO low. The reason for the Rivian stock selloff was that the electric truck maker informed it will be able to deliver only 25,000 R1T pickup and R1S SUV models by the end of this year. This is half of what Rivian promised on its IPO roadshow, forcing investors to scramble for the exits. Rivian lost US$4.7 billion last year, but remains well capitalized with more than US$18 billion of cash on hand thanks to its IPO windfall. According to Rivian's CEO R.J. Scaringe, the EV maker would have been able to deliver the promised 50,000 vehicles in 2022, were it not for the supply chain snags that have been plaguing the industry even before Russia's invasion into Ukraine:

In the immediate term, we are not immune to the supply chain issues that have challenged the entire industry. Those issues, which we believe will continue through at least 2022, have added a layer of complexity to our production ramp-up. We are working diligently and collaboratively with suppliers to identify and head off problems or constraints as quickly as possible.

One of the measures that Rivian is taking to keep delivery numbers as high as possible in today's complex supply chain environment is to move to LFP batteries for its standard-range vehicles, just like Tesla did. These lithium ferophosphate batteries use the cheaper and more plentiful iron compared to the rare and expensive nickel or cobalt metals. With the Russian nickel production cut, a move to LFP packs is the wiser decision for Rivian. Its first EV with an LFP battery will be coming this year in the form of the RCV Amazon delivery vans it is developing, while the R1T pickup will get them in its dual-motor "standard" battery configuration two years from now:

In addition to our Dual-Motor, we announced the Standard battery pack, which we plan to utilize in the RCV platform beginning in 2022 and R1 platform in 2024. We developed this new pack architecture to utilize LFP cells. Expanding our cell and pack technology roadmaps to include both high nickel cells as well as LFP cells will expand our available supply while reducing cost. We believe our commercial customers will see similar daily range capabilities with LFP chemistry, and this chemistry provides meaningful cost savings for us. In our consumer vehicles, we expect an estimated range of over 260 miles in the R1 with the LFP-based Standard battery pack. This battery pack will offer consumers a more affordable entry price to explore the world in a Rivian vehicle.

In other words, if you have preordered a Rivian R1T or R1S truck, you can still get them at the original prices and trim as Rivian reversed its retroactive price hike decision not long ago. Those who plan to buy a Rivian EV from now on, however, and want a cheaper model whose price will at least resemble the original that the company cited, will have to opt for the dual-motor options with 260-mile LFP battery range coming as far out as 2024.

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