Rivian in 2022
Rivian (NASDAQ: RIVN) shares started the year at $103.69. They are currently trading around $19.14, meaning they have lost 81.5% of their value over the year. Rivian's market capitalisation, which stood at $91.6bn on December 31, 2021, has fallen to $16.9bn. Accordingly, $75bn of market value has completely disappeared in one year.
In November 2021, Rivian posted a staggering result on Wall Street when Rivian's share price was $78 at the time of its IPO. The company raised $12 billion. However, a year later, the carmaker's shares had fallen 75.5% from the IPO price.
The reasons for this drop in price are simple: constant supply chain disruptions that increased costs and had a huge impact on the company's drive to mass-produce cars. 2022 was supposed to be a year of ramping up production to meet strong demand, but this proved to be one of costly mistakes, such as suddenly raising the price of products, which tarnished the group's reputation.
At the end of February, the company raised the price of its R1T electric pick-up by 17% and the R1S SUV by 20% due to material costs and chip shortages. The price hike affected all customers, both new and those who had already placed their orders. In the face of protests and order cancellations, the company has been forced to apologise.
In addition, the automaker also terminated its strategic partnership with Mercedes-Benz a few days ago, which would have allowed it to enter the European market and cut its costs.
Rivian is spending a lot of money and faces rising costs, in particular due to soaring raw material and logistics prices. In the short term, the termination of the partnership complicates Rivian's ambitions to compete with Tesla, which has a presence in three important markets such as: North America, China and Europe.
Meanwhile, some investors are beginning to lose patience, such as billionaire George Soros, who further reduced his stake in the group in the third quarter.