Rivian Automotive (RIVN) failed to meet its 2021 production targets. Citing regulatory filings, Reuters reports that the company produced 1,015 vehicles, in line with its lowered expectations. In addition, the company’s Chief Operating Officer (COO) Rod Copes has stepped down. RIVN shares fell 5.61% to close at $81.44 on January 10.
Rivian designs, develops, and sells electric vehicles and accessories.
Rivian Woes
The Amazon-backed electric pickup truck maker projected production of 1200 cars. However, it failed to meet the target after feeling the effects of supply-chain constraints. Consequently, the company ended up delivering 920 vehicles by the end of the year.
The wave of negative news has been compounded further by the confirmation that COO Copes, who began a phased retirement several months ago, retired last month. Copes’ duties have since been absorbed by the leadership team.
The truck maker has also suffered a major blow with Amazon (AMZN), one of its major investors, opting to buy electric delivery vans from its rival Stellantis.
Stock Rating
Last week, Morgan Stanley analyst Adam Jonas reiterated a Buy rating on the stock with a $147 price target, implying 80.50% upside potential to current levels. According to the analyst, investors should keep their near-term expectations in check as ramping electric vehicle manufacturing follows an extremely difficult path.
The analyst expects Rivian to account for 25% of Amazon’s final mile van purchases this year and is expected to increase to 70% by 2030. However, Jonas also warns that investors should expect problems as Rivian has never produced and serviced light vehicles at scale.
Consensus among analysts is a Moderate Buy based on 10 Buys and 4 Holds. The average Rivian price target of $134.64 implies 65.32% upside potential to current levels.
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