Rivian is setting itself up for a much harder second half than it might seem at first glance. They got 10,365 vehicles out in Q1 and 12,194 in Q2, adding up to 22,559 for the first half of the year. But then they bumped up their full-year target to 65,000 to 70,000. So, if you take away what they’ve already delivered, that means they need to get another 42,441 to 47,441 vehicles out in the second half. That’s more than what they managed in the first six months, and they have to do it in the same amount of time.
If you break that up between Q3 and Q4, each quarter needs to come in somewhere around 21,000 to 23,700. For context, Q2 was just 12,194. So, for the rest of the year, Rivian basically has to almost double what they just did. And they need to keep it up for two quarters in a row. That’s a big leap.
R1 and the commercial vans aren’t going to get them there by themselves. Both have been pretty steady, but steady isn’t much help when the new target calls for almost doubling output. R2 is really the only part of the business with enough room to grow this fast, so hitting those big numbers all comes down to how quickly R2 can move from a few early deliveries to real volume.
That’s the part I wouldn’t assume just yet. Everyone was waiting for R2 to show up in the Q2 report, and getting those first few thousand cars out was a big deal. But there’s a huge difference between that and ramping up to crank out over 42,000 in the second half. Shipping the first batch is one thing. Keeping up that kind of pace is a whole different challenge, and it’s what will make or break this new target.
At least there’s a little wiggle room in their target. The low end is about 21,200 a quarter and the high end is closer to 23,700, so they gave themselves about a 5,000 vehicle buffer from bottom to top. Still, even the low end means R2 has to be well past the “trickle” phase by Q3. If the ramp is slow, they’ll just be hoping to hit the minimum, and the top end won’t be realistic.
I’m not saying the new target is a total long shot. They wouldn’t have raised it if they didn’t have a plan for the second half, and there are plenty of orders in the backlog. But the next two delivery reports are going to get way more scrutiny than this one. Getting R2 deliveries started was the win for Q2. Now, it needs to ramp up fast to keep up with this new goal, and there’s not much margin for error if they come up short.
Another thing to consider is that the R2 will likely cannibalize some R1S sales. Some people that would have otherwise gone for the R1S will instead choose the R2 and save some money.
Recent posts/comments on Reddit are showing VINs in the 2200-2400 range (R2s), for context on how many they’ve made/delivered to date.
The R2 is designed to be much simpler and quicker to build than the R1. Tesla knocks out 5,000 Model Ys per week at EACH of their factories. Rivian should attain a minimum of 1,000 per week or more in Q3, producing roughly 13,000 R2s in Q3. They plan to add a second shift in Q4, thus doubling production. 13,000 plus 26,000 is 39,000 in all. Add in R1 production, and the numbers seem more than achievable.
Not really up to your usual standard Jose. Poorly thought out/researched piece. Adding second shift doubles production capability. Total capacity at Normal is 215k pa. You think they just plucked a number from the air. The revised guidance is easily achieved given demand for not just R2 but also for R1 and vans as stated in the recent update. The production guidance is R1 and EDV not just R2, you seem to be focusing only on R2 and not factoring in a second shift. Of course they are not going t crank out 20k + R2s on a single shift, but that’s not what’s happening
Oh man, I completely forgot about the 2nd shift coming onboard! I am VERY bullish on these numbers and I know Rivian can do it.
And you’re also forgetting that there was a lot of downtime in Q1 and Q2 while the factory was retooled, so there isn’t a straight line comparison between production numbers/capacity in H1 and H2