Rivian’s Cash Burn is $1.7 billion

Electric vehicle maker Rivian is losing money go out style, there are relatively few Remaining inventory on dealer lots and Mazda. All that and more on this glorious Friday edition of Morning shift Because August 12, 2022.

First gear: Rivian lost nearly $2 billion in a few months

Electric truck maker Rivian reported its net loss for the second quarter tripled to $1.7 billion, something we saw up to yesterday. It has put pressure on the startup to save some cash and move quickly to fulfill customer orders.

The California-based company said revenue for the quarter was about $364 million as it ramped up vehicle production and deliveries.

The results, though dismal, have mostly lived up to analysts’ expectations. The company reported an adjusted net loss of $1.62 per share. The Wall Street Journal:

The automaker confirmed its 2022 production plan to produce 25,000 vehicles by the end of the year, but said its operating loss is expected to grow to $5.45 billion, from the projected $4.75 billion for the full year before that.

…

Ms. McDonough said Rivian is looking to contain those costs by increasing transportation of vehicles by rail instead of by truck.

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In order for the company to hit its production target of 150,000 vehicles per year at its Normal, Illinois plant, it would have to be run on both day and night shifts.

As it focused on ramping up production, Rivian also said it had trimmed capital expenditures to preserve cash and expected to spend $2 billion rather than its original projection of $2.6 billion.

At the end of June, Rivian had about $15.46 billion in cash and cash equivalents, about $1.5 billion less than at the close of the first quarter.

The company produced just 4,401 vehicles in the second quarter. It aims to hit 25,000 by the end of the year.

2nd Gear: Vehicle Inventory Is Dwindling

Vehicle inventory levels are pretty much stagnated in the U.S. at just 1.02 million vehicles, according to Cox Automotive and the Automotive News Research & Data Center.

It’s primarily due to the continued supply chain issues and the microchip shortage. The issues are blocking automakers from boosting production despite a slowdown in sales. From Automotive News:

Cox estimated in its most recent survey that inventories fell in July to 1.02 million vehicles, down about 98,000 vehicles from a month earlier and marking the seventh straight month of inventory levels at low levels. from 1 million to 1.1 million. Cox says this total represents a 37-day supply, based on practice using sell rates for the most recent 30-day period. That compares with a 35-day supply a month earlier and a 31-day supply at the same time last year, when Cox estimated inventory at 1.2 million.

Of the seven automakers that continue to report sales and inventory data to the Automotive News Research & Data Center, Subaru still has the tightest supply, at three days, of the year. while other Asian brands also performed poorly due to their long supply lines.

For example, the Toyota brand started August with 86,696 vehicles, representing a 15-day supply. Of which, only 9,530 units have been delivered to dealers, the rest are still in the process of delivery. Lexus has a 20-day supply, at 18,094 vehicles, but only 4,728 vehicles at dealers.

Of the brands reporting, Ford seems to have the highest inventory levels at 40 days (unless you want a Bronco). Cox says supply is scarcest for small cars, minivans and electric vehicles.

3rd gear: Mazda

Mazda got a little hurt by different COVID-19 lockdowns in China, as Mazda supplies a lot of spare parts from China. In this respect, it is not much different from many other automakers, although Mazda is trying to learn from its recent past, according to Reuters:

Mazda Motor Corp. said on Friday that it would ask parts suppliers to increase inventories in Japan and produce components outside of China after the COVID-19 lockdown in Shanghai destabilized the supply chain. and hinder production.

The request from the Hiroshima-based automaker highlights the vulnerability of a sprawling supply chain that has been tested by the pandemic and geopolitical tensions, creating uncertainty for businesses. .

[…]

Mazda said it shipped chips and key auto parts to China for assembly, but was unable to receive those components from Shanghai during the city’s shutdown.

Even if Mazda’s direct suppliers are Japanese and European companies, they still have parts from China, said Takeshi Mukai, a senior executive at the automaker.

“In our case, we were the first to be affected by the lockdown, as we have been promoting parts purchases through China for a while,” said Mukai. “With the current (zero-COVID) policy, the bottom line is to keep (parts) in our hands.”

4th gear: Hino and Toyota are in trouble

Japanese truck maker Hino and its parent company, Toyota, are being charged with historic misconduct in a class-action lawsuit brought in the US.

The company said in a statement the case, which is being filed in the Southern District of Florida, is being carried out on behalf of people who purchased or rented Hino model 2004-2021 trucks in the US. Are from Reuters:

An investigative report this month by a board authorized by the company said Hino, Toyota’s main subsidiary, had falsified emissions data on some engines from at least 2003, or more than a decade. previous century.

Hino blames the introspective corporate culture and management’s failure to adequately interact with workers for an environment that places a high priority on meeting schedules and quotas. rather than following procedures.

The panel said the investigation looked at mid- and large-sized engines for the domestic US market, but did not rule out the possibility of similar problems abroad.

5th gear: High speed Rail! Tall-High-speed rail! Tall-High-speed rail!

California’s high-speed rail agency reports that it has won $25 million in new federal funding to push its project beyond 119 miles by understanding.action. The agency is seeking an additional $1.3 billion in bonuses.

The U.S. Department of Transportation grant will provide more than half of the estimated $41 million for a design contract to connect the California cities of Madera and Merced. Last fall, President Biden’s administration awarded it $24 million for “critical safety, effectiveness, and understanding.”ction project” around Wasco, California. Are from Reuters:

The new grant helps fund “design of civil infrastructure, rail systems, and station platforms,” USDOT said. The project “is expected to reduce vehicle mileage by more than 200 million miles per year and the high-speed rail system will run on fully renewable energy,” it added.

Eventually, the rail line will travel from San Francisco to the Los Angeles basin at more than 200 mph (322 km/h) in less than three hours. America’s fastest passenger train, the Acela on the northeast corridor, travels at 150 mph but aging infrastructure prevents that top speed along much of the route.

California is seeking $1.3 billion in federal funding to dig the 119-mile dual track under construction and purchase new train sets.

Congress approved $66 billion for railroads as part of a $1 trillion infrastructure bill for 2021, with Amtrak receiving $22 billion and $36 billion allocated to utilities. competitive grants.

In June of last year, the Biden administration restored $929 million in funding for the project. That comes after US President Donald Trump’s 2019 decision to withdraw funds for the project … calling it a “disaster”. This is all, still, small potatoes compared to how do they do it abroad.

Reverse: They found bones!