Rivian looks to raise $1.3 billion amid growing concerns about EV demand

Rivian Automotive plans to rise $1.3 cardinal successful currency via a merchantability of convertible notes, joining a increasing database of EV makers scrambling to hoard currency arsenic request falters.

Shares of Rivian were down astir 6% successful premarket trading connected Tuesday.

Rivian said precocious Monday it plans to merchantability the convertible notes – bonds that tin beryllium paid backmost with cash, banal oregon a premix of the 2 – to assistance money the improvement and motorboat of its upcoming smaller R2 bid of vehicles, present expected successful 2026. The organization investors purchasing the notes volition person the enactment to bargain further notes worthy up to $200 million, if they choose, supra the archetypal $1.3 billion.

Rivian isn't successful an urgent currency crunch, astatine slightest not yet. The EV shaper had $12.1 cardinal connected manus arsenic of the extremity of 2022, it said during its fourth-quarter earnings presumption past week, capable to money its operations done 2025. But it precocious made a bid of moves to conserve cash, laying disconnected 6% of its workforce and pushing the R2 motorboat retired a year.

Rivian besides said past week that it that it expects to nutrient 50,000 vehicles successful 2023, less than the astir 60,000 that Wall Street analysts had expected. That whitethorn beryllium a motion that request for its high-priced pickups and SUVs is falling abbreviated of its expectations.

Lucid, different startup making high-priced electrical vehicles, besides guided investors to lower-than-expected accumulation successful 2023 and said that it plans to ramp up its marketing successful coming months, suggesting that it excessively is seeing less orders than expected.

Rivian raised astir $12 billion erstwhile it went nationalist successful precocious 2021, helping it amass a currency hoard that inactive dwarfs that of astir different EV startups. The company's shares person mislaid implicit 80% of their worth since the debut, though.

Rivian said the convertible notes volition suffice arsenic "green bonds," meaning they conscionable a acceptable of criteria that tends to pull institutions consenting to judge little returns successful speech for supporting sustainable development.

The notes volition mature successful March of 2029. The involvement complaint and different presumption volition beryllium decided erstwhile the offering is priced.