Rivian is considering laying off 700 employees that are not in manufacturing, according to Bloomberg. he company hasn't made it official yet and it may take weeks before they do.
It is surprising to know this, considering that it's an important time for the electric automaker. Rivian is starting to ramp up its production of pickups, SUVs, and delivery vans for Amazon.
In a recent earnings report, the company produced around 2,500 vehicles and delivered 1,227. They are also still planning to reach 25,000 by the end of the year.
According to The Verge, the company has massive cash reserves but it got a significant loss in the last quarter, which was around $1.59 billion.
Also Read: Rivian R 1T, R1S EVs Prices Increase by $20K-Here's Why
The Deal with Amazon
Amazon invested in Rivian in 2019 as part of its plan to go green. However, in the earnings report just recently, Amazon already took a $7.6 billion loss on its stake in Rivian. In fact, shares of the EV manufacturer have plummeted by over 50 percent in the first three months of 2022, according to CNBC.
Amazon's agreement with the automaker is for the production of 100,000 delivery vehicles by 2030. However, with the current market conditions, that may not be possible.
Like most EV makers and manufacturers, Rivian is struggling with supply chain constraints and internal production snags. However, the company was valued at $86 billion after its IPO pop.
Rivian went public in November last year in one of the biggest initial public offerings, attracted plenty of attention from investors, and even as compared to Tesla with its sleek designs and digital ecosystem built for its customers.
The electric automaker also has a consumer-facing R1 platform that includes an SUV and truck. Furthermore, their direct-to-consumer strategy bypasses the traditional dealership model in favor of showroom experiences that are more suited to lifestyle boutiques. Its first physical showroom, the Hubs in Venice, California last fall with space designated for workshops and gatherings.
They also have an online shop that sells vehicle accessories, branded sweatshirts, crop tops, hats, mugs and other items.
The Problem Automakers are Facing
Rivian isn't the only automaker that is having problems with production. Many are also being bogged down by chip and other parts shortages due to supply chain constraints. EVs are increasing as more brands start to offer them as their main product. However, companies are finding it hard to keep up with the demand. It's just a matter of time before other electric car companies will also have similar challenges.
EVs are still on the rise and the market is expected to grow even more in the coming years. However, the biggest challenge for the automakers and electric car makers is to keep up with the demand. Most companies are having difficulty and it's only a matter of time before other EV makers and manufacturers will also experience similar problems.
Related Article: Rivian to Reorganize its Production for Faster Output, But Some Users Will Have to Wait Longer
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Written by April Fowell
