Rivian has been buffeted by poor results and concerns about whether it can stay in business. One of the world’s most famous investors recently dumped almost his entire position in the manufacturer’s stock.
According to Bloomberg, Soros Fund Management, the chair of which is George Soros, one of the world’s largest hedge fund managers who is worth about $8 billion, sold 10.8 million shares of Rivian in the first quarter. That leaves him with 3.6 million shares.
Rivian Inc., the electric vehicle company, may run out of highway. After it posted mediocre earnings, investors asked whether it could continue to fund itself. If not, it will join a long list of car manufacturers that have gone under in the past 12 decades. (These are the biggest electric vehicle business failures in American history.)
The Wall Street Journal reported, “Absent new funding, they face a limited timeline in which to turn a profit before running out of money.” Rivian foundr and CEO Robert Scaringe believes he can increase the number of vehicles the company makes and cut costs simultaneously. He faces an EV market in which price cuts are frequent. That means he also may have to struggle with lower margins.
Buried in a preposterously long quarterly earnings statement was a negative cash flow of $1.8 billion. Rivian’s net loss was $1.3 billion. Cash on hand dropped to just above $11 billion. That is not enough to cover losses in a remarkably competitive market.
Rivian said it would make 50,000 vehicles this year. This is not enough against competitors like the Ford F-150 Lightning and several EV pickups coming online from major car companies. And the R1T model carries a ridiculously high sticker price of $73,000. That is well above what most pickup drivers can afford. While people can reserve one for $1,000, they also can cancel easily.
Rivian continues to move toward the car model junkyard graveyard. People who buy a Rivian will end up with a collector’s item.
ALSO READ: The Worst New Cars for Humans and the Environment
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