Some Bad News for Rivian Investors

Despite the doom and gloom surrounding the electric-vehicle (EV) industry lately, Rivian (RIVN -2.10%) investors have found some glimmers of positive news to digest. Unfortunately, that wasn’t the case recently with registration data from S&P Global Mobility, which showed a sharp decline in vehicle registrations and some of Rivian’s closest competitors surging.

By the numbers

Rivian carved out a niche in the EV market by beating rivals to the EV truck market during the fall of 2021. Unfortunately for Rivian investors, the competition caught up quickly, and it’s taking a toll on the start-up EV’s registrations.

Ford Motor Company‘s (F -1.06%) F-150 Lightning remained the most popular EV truck in March, according to data from S&P Global Mobility. But perhaps more surprising was that the Tesla (TSLA -1.41%) Cybertruck, with its untraditional styling, also outsold Rivian’s R1T.

According to Automotive News, Tom Libby, associate director of industry analysis at S&P Global Mobility, said: 

In its fourth month, the Cybertruck had over a thousand registrations and outsold the R1T by more than two to one. And frankly, I’m a little bit surprised. The Cybertruck is very, very unique, and it’s interesting that it’s been able to do that type of volume so quickly.

Specifically by the numbers, Ford’s F-150 Lightning notched 2,893 registrations for the month of March, which was nearly triple the number from the prior year. The Cybertruck notched 1,158 registrations in March, while Rivian’s R1T spiraled 65% lower to only 548 registrations.

This might surprise investors because the Cybertruck was initially presented to sell for just under $40,000 before the price rose to just over $60,000 — but it hasn’t seemed to impact enthusiasm for the vehicle. What’s worse for Rivian investors is that in February, the price of the R1T was slashed by $3,100.

What it means

Investors knew that Rivian’s production and deliveries were going to stall this year, as evidenced by company forecasts. Also, to be clear, registrations aren’t sales, but they do serve as a proxy to sales as Tesla doesn’t break out its U.S. sales from global deliveries.

Investors also have to keep in mind that Rivian sells more of the R1S and it’s a more profitable vehicle currently. The R1S registration data isn’t included here. It’s possible a surge in R1S sales could offset weakness in its R1T numbers.

What’s next?

These figures illustrate what investors already know: Rivian needs to launch its R2 vehicles more quickly. Fortunately, that’s exactly the decision management made recently when it announced it would start production of R2 vehicles at its original factory in Normal, Illinois instead of waiting until the completion of its Georgia factory.

Using the excess capacity at its Illinois facility instead of waiting until Georgia came online also saved the company $2.25 billion and, more importantly, accelerated the launch schedule.

Ultimately, these registration figures aren’t anything for Rivian investors to panic about. They’re just a symptom of another thing investors already know: Competition is increasing. Rivian still has plenty of liquidity to survive until the launch of the R2 vehicles, but the decline in registrations highlights how important it is for the next generation to be a hit with consumers.