By Akash Sriram and Tina Bellon
(Reuters) -Rivian Automotive Inc on Wednesday reaffirmed its annual production forecast of 25,000 units, saying ongoing supply chain disruptions and material costs prevented the electric vehicle maker from reaching its original target of 50,000 vehicles.
The Irvine, California-based company's shares rose 5% in extended trading after closing the day down 9.6%.
"We remain focused on ramping production throughout 2022. We believe that the supply chain constraints will continue to be the limiting factor of our production," Rivian said in a letter to shareholders, adding that it would be able to double its annual output absent supply constraints.
Rivian had halved its 2022 forecast in March as it struggled to secure the chips needed to make its R1T pickup truck, R1S SUV and electric delivery van for Amazon.com Inc (NASDAQ:AMZN).
Investors have been disappointed with the company's progress, and Rivian shares came under growing pressure this week as the company's post-IPO lockup period expired. Ford Motor (NYSE:F) Co sold eight million Rivian shares for $124 million, a Tuesday filing showed.
At around $18.5 billion, Rivian's market valuation has plummeted since it went public in November. The company is now valued roughly in line with the $17 billion it holds in cash and cash equivalents.
That made Rivian a potential acquisition target by Amazon, its second-largest shareholder, "or a traditional automaker looking for a bolt-on EV acquisition," CFRA Research analyst Garrett Nelson said.
Rivian, which currently operates a single plant in Illinois, is planning to invest $5 billion to build a new production plant in Georgia. A company spokeswoman last week said Rivian aimed to open that plant in late 2024, but Rivian on Wednesday said it was looking at a 2025 launch date.
Rivian said it had enough cash on hand to open the Georgia factory. That was a "big plus," said Redburn analyst Charles Coldicott, adding that analysts had expected the company to raise additional capital in 2024.
Rivian is one of several EV startups facing a crowded field of competitors, including market leader Tesla (NASDAQ:TSLA) Inc. Other large, incumbent automakers have pledged billions in investments on new technology and EV plants.
While Rivian is sitting on a larger cash pile than many of its smaller competitors, the company's operations are using up significant capital. Operating activities in the first quarter burned around $1 billion in net cash, and Rivian last quarter said it continued to expect negative gross margins throughout 2022.
Rivian delivered 1,227 vehicles in the first quarter, up from 909 units in the previous quarter.
It said it has received more than 90,000 pre-orders in the United States and Canada for its R1S SUV and R1T pickup truck as of May 9.
The company reported first-quarter revenue of $95 million, below analysts' estimates of $130.5 million, according to Refinitiv data.
Its net loss widened to $1.59 billion from $414 million a year earlier.