A dose of good news for Rivian (RIVN) has shares of the EV truckmaker on the move today.
The maker of electric pickups and SUVs reported it produced 7,363 units in Q3 and delivered 6,584. That production total represents a 67% jump from Q2, when it produced 4,401 trucks. The company produced around 2,500 trucks in Q1.
CEO RJ Scaringe is focused on production gains and adding new shifts at the company’s lone factory in Normal, Illinois. The rising output has led the company to reiterate its 2022 annual goal of 25,000 vehicles produced for the quarter, despite component shortages the company noted earlier this year. Rivian’s initial annual goal was 50,000 trucks produced, which it later cut in half in March.
While the stock is jumping on optimism, one Wall Street analyst isn’t buying the story just yet.
“RIVN said it believes it is on track to deliver on its prior 2022 production guidance of 25,000 units. Doing so will entail improvement in Q4 (production of 10,683+ unit) and we continue to believe it will fall short,” CFRA analyst Garret Nelson said in a note.
Nelson also believes the current environment remains difficult for startup EV companies because they are “several years from achieving profitability.” Those capital constraints, coupled with competition from established names like Ford, GM, and Tesla, will make it difficult for Rivian to succeed and become profitable, at least in the near term, Nelson added. CFRA maintains its Sell rating and $25 12-month price target.
For the Rivian bulls, a big part of the growth story is the second plant the company intends to open in Georgia in the next two years, where it plans to build its cheaper R2 series of vehicles. However, those plans were dealt a blow recently.
In a court ruling late last week, a local Morgan County judge denied $15 billion in bonds meant for construction of the plant in Rutledge, Georgia.
Judge Brenda Trammell ruled Thursday that the Joint Development Authority (JDA), an organization that seeks to attract businesses to the region, could not prove construction of the Rivian factory would be “sound, reasonable, and feasible,”meaning the company is not eligible for the bonds.
Judge Trammell also ruled Rivian would have to pay traditional property taxes, which it was originally excluded from paying.
“We basically were able to prove that we were only going to get $44 million the way the contract was written,” said JoEllen Artz, one of the organizers of a local opposition. “But if it was actually taxable … the two counties would get over $700 million in property taxes.”
The JDA and its partner the Georgia Department of Economic Development said they would appeal the judge’s ruling.
—
Pras Subramanian is a reporter for Yahoo Finance. You can follow him on Twitter and on Instagram.
Read the latest financial and business news from Yahoo Finance
Download the Yahoo Finance app for Apple or Android
Follow Yahoo Finance on Twitter, Facebook, Instagram, Flipboard, LinkedIn, and YouTube
Source: https://finance.yahoo.com/news/rivian-q-3-production-jumps-67-reaffirms-production-forecast-164434629.html