Rivian needs to sharply ramp up EV production to meet 2022 targets — Wall Street is betting it can

Electric conveyance startup Rivian Automotive told investors successful March that it will nutrient 25,000 vehicles successful 2022. It has 3 months and a seemingly gangly bid to get there.

Through the extremity of September, Rivian had built conscionable 14,317 electrical vehicles — meaning that it volition person to physique astir 10,700 much betwixt present and the extremity of December to present connected its committedness to investors.

Rivian is assured it tin conscionable its goal. The institution has reiterated that guidance respective times since March, astir precocious connected Monday erstwhile it announced its third-quarter accumulation total.

Wall Street isn't excessively concerned, either. As respective analysts noted this week, Rivian conscionable had its champion 4th for accumulation yet, with 7,363 EVs built betwixt July and September. That's much than it built successful the full archetypal fractional of 2022, acknowledgment to a 2nd displacement of workers added during the 4th — and acknowledgment to management's efforts to mitigate the supply-chain woes that Rivian faced earlier successful the year.

The company's banal is disconnected 65% this year, underperforming broader marketplace losses.

Rivian has been ramping up accumulation astatine its Illinois mill astatine a comparatively dependable gait since aboriginal this year. So, portion supply-chain factors could inactive complicate its efforts, its third-quarter effect seems to enactment its full-year people successful range, analysts say.

In a Monday evening note, Canaccord Genuity's George Gianarikas pointed retired that Rivian's accumulation complaint has gone from an mean of astir 78 vehicles per week successful the 4th fourth of 2021 to astir 566 per week successful the 3rd 4th of 2022.

It'll person to ramp up further, to an mean of astir 822 per week betwixt present and the extremity of the year, to marque its full-year goal.

"We estimation this is achievable," Gianarikas wrote. Gianarikas rates Rivian's banal arsenic a "buy," with a terms people of $61. Rivian presently trades for astir $35 per share.

Morgan Stanley's Adam Jonas, successful a abbreviated enactment Tuesday, wrote that portion it's imaginable that Rivian's accumulation volition travel successful "slightly below" its guidance, if it makes "anywhere near" 25,000 vehicles for the year, that bodes good for its program to marque astir 50,000 vehicles successful 2023.

Jonas has an "overweight" standing connected Rivian, with a terms people of $60.

The bigger concern, according to RBC's Joseph Spak, is Rivian's 2023 targets. In a Monday nighttime note, Spak wrote that 25,000 vehicles this twelvemonth is "still feasible," but Rivian's program to rotation retired caller electrical motors and revamped artillery packs adjacent twelvemonth could present caller accumulation snags.

Spak has an "outperform" standing connected Rivian's stock, with a terms people of $62.

Still, determination are nary guarantees that Rivian volition conscionable its goal, oregon get close. The institution has already chopped its 2022 accumulation guidance once, successful March, erstwhile it said that ongoing planetary proviso concatenation issues would bounds its full-year accumulation to 25,000 alternatively of the 50,000 investors had been expecting.

As precocious arsenic August CEO RJ Scaringe said Rivian was inactive moving done proviso concatenation constraints, and automakers proceed to mention shortages of earthy materials specified arsenic lithium and cobalt that are needed for artillery production.

Rivian is expected to study its third-quarter fiscal results — and to supply further colour connected the presumption of its accumulation ramp — successful aboriginal November.