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EV maker Rivian says Ukraine crisis adds to its supply chain pressures

Rivian recently stated that its supply chain pressures and costs have increased as Russia’s invaded Ukraine. It is one of the first US automakers to directly state that the war in Eastern Europe has impacted them, increasing risk and headwind. It was stated through a regulatory filing on Thursday.

Russia's Ukraine War Hits EV Truck Maker Rivian's Supply Chain

Image credits- Bloomberg

Recently Tesla also announced an increase in the prices recently, increasing prices in large amounts. Though it is evident that the supply chain pressures are due to the war. Tesla hasn’t specified the reasons behind the changes.

In the regulatory filing, Rivian also added that the ongoing pandemic and inflation are also causing “disruptions to and delays” in operations. After which it has stated the conflict as a factor. Increasing higher component costs, from battery metals to other vehicle parts, all the prices have risen considerably. The Amazon-backed EV company has already struggled to ramp up its production since it first started production last year. Rivian stated in the filing, “There have been very sizable increases in recent months in the cost of key metals, including lithium, nickel, aluminum, and cobalt with volatility in pricing expected to persist for the foreseeable future,” However, the automaker hasn’t explicitly linked the price pressures to the war.

Increasing prices

Rivian has made 13 references to Ukraine in total in the filing. Previously the company hasn’t made any explicit references to the war. But it did acknowledge the rising prices of commodities and ongoing parts procurement issues. Rivian noted issues with battery cell manufacturers’ “inability or unwillingness” to operate or build battery cell manufacturing plants to meet the supply demands of electric or plug-in vehicle production. It also listed a “disruption in the supply of battery cells due to quality issues or recalls” by battery manufacturers.

Rivian said in the filing, “If we are ever to achieve profitability, it will be dependent upon the successful development and commercial introduction and acceptance of our consumer vehicles, such as the R1T and R1S, our commercial fleet vehicles, such as the EDV, and our services, which may not occur,”

“Our path to EV leadership won’t be easy,” Rivian said in its Shareholder Deck for the quarter. “In the immediate term, we are not immune to the supply chain issues that have challenged the entire industry. Those issues, which we believe will continue through at least 2022, have added a layer of complexity to our production ramp-up.” Rivian also said it does not expect “to reach a vehicle production rate, which, when annualized, [that] would result in us using 100% of the facility’s current installed capacity of up to 150,000 vehicles until late 2023.”

 

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