Rivian CEO: Parts crunch won’t affect company’s bright future

rivian ceo parts crunch wont affect companys bright future
Scaringe on factory floor

NORMAL, Ill. — Rivian Automotive’s modern factory in Central Illinois could pump out far more R1T pickups, R1S SUVs and Amazon delivery vans except for the shortage of a few key parts. But its slow-motion production ramp doesn’t threaten the EV startup’s bright future, CEO RJ Scaringe told Automotive News.

“There’s 168 hours in a week,” Scaringe said in an interview at the factory last week. “We’re using a very small fraction of those hours [for production]. So that’s by far our biggest focus as an organization — getting as many parts as we possibly can so we can be building more vehicles.”

Rivan estimates it will make about 25,000 vehicles this year, about half what it could produce with adequate parts supply. At full ramp, the factory has the capacity to build 150,000 vehicles a year.


“There’s a tremendous amount of focus on the short term,” Scaringe said at the former Mitsubishi plant that Rivian acquired and refurbished with modern equipment. “But I didn’t start Rivian only focused on next week.”


The number of parts holding up the production line is relatively small, Scaringe said. But there have been surprise complications, such as the war in Ukraine. Semiconductor chips are in short supply across the industry and a labor shortage in Mexico has reduced availability of wiring harnesses.

“Most of the components, whether it’s chips or hardware inside the vehicle, are not constrained — the vast majority,” the CEO said. “But the ones that are constrained, it’s for a reason. The world needs more of those.”

Rivian reported first-quarter production of 2,553 vehicles but didn’t break them down by model. The automaker said in March it had 83,000 reservations for the R1T and R1S, in addition to Amazon’s initial order for 100,000 vans.

As of March 31, Rivian said it had made 3,568 vehicles since the factory opening in September.

The R1T starts at $68,575 with shipping and can be pushed over $100,000 for higher trims with pricey accessories. The R1S starts at $73,575 with shipping.


While parts scarcity has forced Rivian to be hyper-focused on short-term supply chain issues, that hasn’t stopped the startup from moving forward on ambitious plans for a second factory near Atlanta, and expanding vehicle features, including new motor and battery configurations.

Moreover, Rivian’s initial public offering last year has given it the funds to survive and thrive, Scaringe said.

“We’ve fortunately capitalized the business to a level that whether we deliver ‘x’ vehicles or ‘2x’ vehicles this week, that doesn’t have a material impact on our financial viability,” Scaringe said.

Rivian’s stock price has fallen from more than $100 per share at the start of the year to about $40 at the close last week. In March, the company reported a net loss of $2.46 billion in the fourth quarter compared with a loss of $354 million from a year earlier.

The automaker is moving forward with plans to build a new generation of electric motors in-house and to develop a proprietary 800-volt battery architecture. Longer term, Rivian is working on a second platform dubbed R2 for smaller vehicles with more affordable prices.

Parts shortages could potentially delay some aspects of those plans, Scaringe said. But there’s no point in changing course due to temporary bumps in the road.

“If we set our strategy and the things we are working on long-term based on short-term supply blips that we’re feeling today,” Scaringe said, “that would be ludicrous.”


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