Rivian Falls Apart

Rivian Automotive Inc. (NASDAQ: RIVN) recently gave up on a promising deal with one of the world’s premier car and truck companies. It had a partnership to make vans with Mercedes-Benz Vans. The arrangement was only three months old. It is an example of how badly Rivian has struggled to find direction as management gropes toward a future that likely is no longer there.

Rivian is barely in business. It delivered 6,584 vehicles in the third quarter. Management celebrated. Of course, there is a reason. Rivian might have yet to deliver any. While it has 114,000 reservations for its R1 truck, all these are subject to cancellation. These should not give investors any confidence.

Rivian has another distinction. It lost $1.7 billion last quarter. That loss level is usually only posted in bad quarters for the world’s largest car companies. Rivian did it as one of the smallest.

Rivian faces several buzz saws. The most powerful of these is the Ford F-150 Lightning. It is the electric version of the top-selling vehicle in the United States. This is a distinction the F-150 has held for decades. Ford likely has at least 6 million of these on the road, giving it a massive customer base to which to market the Lightening.

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Elon Musk’s Tesla will start production of the company’s Cybertruck in a year. Tesla’s brand and spot as the world’s top electric vehicle company give it strong leverage with potential customers.

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Rivian’s other challenge is that every major car company will have an electric pickup on the road within two to three years. While each may only have a modest market share, the avalanche of models will overwhelm Rivian, if it is still around.

Wall Street already has passed its judgment. Rivian’s stock trades near $26, down from a 52-week high of $121.64.

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