According to some analysts, Rivian's cash burning is a concern given how many sales it has.
1st Gear: Rivian Is Burning Through Cash
Back in college, as both a student of Business and a viewer of HBO’s Silicon Valley, I learned all sorts of words that the average person has no business knowing. Runway. Lean Manufacturing. Product-Market Fit. Now, it seems Rivian is learning the meaning of Cash Burn. From Automotive News:
Rivian Automotive is facing scrutiny over its operating costs, capital expenditures and cash burn as part of second-quarter earnings after the market close Thursday, as the EV maker boosts production at its Illinois factory and plans for a second plant in Georgia.
Last month, Rivan [sic] announced a 6 percent reduction in its workforce, which was at about 14,000 before the announcement. Rivian said it wants to optimize spending on increasing its output and on developing its R2 platform for the Georgia plant.
Market analysts are focused on how much money Rivian is burning through because of its relatively limited deliveries and its rising costs due to current and future expansion.
It seems like every time Rivian comes up in The Morning Shift, I have to mention the company’s vertical integration strategy, which increases short-term costs through investment in upscaling capabilities to save in the long term and reduce reliance on outside suppliers. Shit, now I’m using the business words. Rivian is spending a lot of money upfront to save money later, but you know how investors are — every quarter has to have record returns.