Rivian’s cash burn was $1.7 billion

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Photo: Rivian

Electric vehicle maker Rivian is losing money like it was go out of fashion, there are relatively few remaining inventory on dealer and Mazda lots. All this and more on this glorious Friday edition of The morning shift for August 12, 2022.

1st Gear: Rivian lost nearly $2 billion in just a few months

Electric truck maker Rivian said its second-quarter net loss tripled to $1.7 billion, something we saw it coming yesterday. This prompted the start-up to save money and move quickly to fulfill customer orders.

The California-based company said revenue in the quarter was about $364 million as it ramped up production and deliveries of its vehicles.

The results, while dismal, roughly met analysts’ expectations. The company reported an adjusted net loss of $1.62 per share. the wall street journal:

The automaker confirmed its 2022 production forecast to build 25,000 vehicles by the end of the year, but said its operating loss was expected to reach $5.45 billion, compared to its previous projection. of $4.75 billion for the full year.

Rivian is looking to rein in those costs by shipping more and more vehicles by rail rather than truck, which is cheaper but could result in longer delivery times to customers, Ms. McDonough said.

For the company to meet its production goal of 150,000 vehicles per year at its Normal, Illinois plant, it would have to operate day and night.

As it focused on ramping up production, Rivian also said it had cut capital spending to preserve cash and planned to spend $2 billion instead of its original projection of $2. .6 billion.

At the end of June, Rivian had about $15.46 billion in cash and cash equivalents, about $1.5 billion less than at the end of the first quarter.

The company produced only 4,401 vehicles in the second quarter. It aims to reach 25,000 by the end of the year.

2nd gear: vehicle inventory decreases

Vehicle inventory levels are stagnating in the United States at just 1.02 million vehicles, according to Cox Automotive and the Automotive News Research & Data Center.

This is mainly due to ongoing supply chain issues and microchip shortages. The problems are preventing automakers from ramping up production despite slowing sales. Of Automotive News:

Cox estimates in its most recent survey that inventory fell in July to 1.02 million vehicles, down about 98,000 from the previous month and marking the seventh consecutive month that inventory has remained between 1 million and 1.1 million. Cox said the total represented a 37-day supply, based on its practice of using the sell rate from the most recent 30-day period. That compares to a 35-day supply a month earlier and a 31-day supply at the same time last year, when Cox estimated inventory at 1.2 million.

Of the seven automakers that continue to report sales and inventory data to the Automotive News Research & Data Center, Subaru still had the tightest supply, at three days, with other Asian brands also lean due to of their long lines of supply.

For example, the Toyota brand started the month of August with 86,696 vehicles, which represents a 15-day supply. Of that number, only 9,530 were in dealer hands, with the rest still being delivered. Lexus had a 20-day supply of 18,094 vehicles, but only 4,728 were at dealerships.

Of the reporting brands, Ford apparently has the highest 40-day inventory levels (unless you want a Bronco). Cox says supply is tightest for small cars, minivans and electric vehicles.

3rd gear: Mazda

Mazda was hurt a bit by various COVID-19 lockdowns in China, as Mazda sources most of its supplies from China. In this regard, it is not much different from many other automakers, even if Mazda tries to learn from its recent past, according to Reuters:

Mazda Motor Corp. announced on Friday that it would ask its parts suppliers to increase inventory in Japan and produce components outside of China after COVID-19 lockdowns in Shanghai destabilized supply lines and hampered production .

The Hiroshima-based automaker’s request underscores the vulnerability of sprawling supply chains that have been tested by the pandemic and geopolitical tensions, casting uncertainty over businesses.

[…]

Mazda said it brought crucial auto chips and parts to China for assembly, but was unable to receive those components from Shanghai during the city’s lockdown.

Even though Mazda’s direct suppliers were Japanese and European companies, they still had parts flowing through China, said Takeshi Mukai, chief executive of the automaker.

“In our case, we were the first affected by the lockdown, as we had been encouraging parts sourcing through China for some time,” Mukai said. “Given the current policy (zero-COVID), the key point is to keep (the parts) in our hands.”

4th gear: Hino and Toyota are in trouble

Japanese truck maker Hino and its parent company, Toyota, are accused of historical misconduct in a class action lawsuit filed in the United States

The case, which is filed in the Southern District of Florida, is being brought on behalf of those who purchased or leased a 2004-2021 model year Hino truck in the United States, the company said in a statement. Of Reuters:

An investigative report released this month by a company-appointed panel said Hino, Toyota’s main subsidiary, falsified emissions data for some engines dating back to at least 2003, more than a year. decade earlier than previously indicated.

Hino blamed an inward-looking company culture and an inability by management to engage enough with workers that led to an environment that places a higher priority on meeting schedules and numerical goals than process monitoring.

The panel said the investigation focused on midsize and large engines for the US domestic market, but did not rule out the risk of similar problems overseas.

5th gear: high speed Rail! High-High-speed train ! High-High-speed train !

California’s High-Speed ​​Rail Authority announced it had won $25 million in new federal grants to advance its project beyond the 119 miles under constructionaction. The agency is seeking an additional $1.3 billion in rewards.

The U.S. Department of Transportation grant will provide more than half of an estimated $41 million for a design contract to connect the California cities of Madera and Merced. Last fall, President Biden’s administration awarded him $24 million for “crucial safety, efficiency and construction.”action projects” around Wasco, California. Of Reuters:

The new grant helps fund “the design of civil infrastructure, track and system, and station platforms,” ​​the USDOT said. The project “is expected to reduce vehicle miles traveled by more than 200 million miles per year, and the high-speed rail system will run on fully renewable energy,” he added.

The rail will eventually travel from San Francisco to the Los Angeles Basin at over 200 miles per hour (322 km/h) in less than three hours. The fastest US passenger train, the Acela on the Northeast Corridor, travels up to 150 miles per hour, but aging infrastructure prevents that top speed for much of the route.

California is seeking $1.3 billion in federal grants to double 119 miles under construction and buy new trains.

Congress approved $66 billion for rail as part of the $1 trillion infrastructure bill of 2021, with Amtrak receiving $22 billion and $36 billion allocated for competitive grants.

In June last year, the Biden administration reinstated a $929 million grant for the project. It came after a 2019 decision by then-President Donald Trump to withdraw funding for the project… calling it a “disaster.” That’s it, again, small potatoes compared to how they do it abroad.

Reverse: They found the bones!

Neutral: Enjoy your weekend

You work hard, now it’s time to play hard. Have some brewskis and sit in a lawn chair. It’s going to be a nice weekend.

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