Rivian (RIVN) officially shuts down Normal EV plant for upgrades as R2 creates a buzz

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Rivian (RIVN) officially shut down production at its Normal, Illinois plant as the EV maker prepares for its next growth phase. The company is upgrading the facility to cut costs and improve efficiency as it looks to expand the brand.

Rivians shuts down EV production at Normal, IL plant

First announced in November, Rivian is shutting down production at its Normal EV plant for several weeks to introduce new tech and practices to improve efficiency.

CEO RJ Scaringe explained the company was planning a shutdown to “implement a whole host of changes that introduced a dramatic cost reduction in materials costs” for its R1S and R1T models.

The changes enable Rivian to produce vehicles with less labor and, therefore, less cost per vehicle. Although the downtime is from April 5 to April 30, it will impact all four quarters as it scales production.

As a result, Rivian expects production to remain flat this year, with around 57,000 vehicles built in 2024.

Rivian has already significantly reduced the cost of building each vehicle over the past year, but the EV maker expects the upgrades will “meaningfully reduce” material costs.

Q3 ’22 Q4 ’22 Q1 ’23 Q2 ’23 Q3 ’23 Q4 ’23
Rivian loss per vehicle $139,277 $124,162 $67,329 $32,594 $30,500 $43,372
Rivian loss per vehicle by quarter

The company lost $43,372 on each vehicle built in Q4, down from $124,162 per vehicle the year before.

Rivian believes the upgrades and new supplier cost reduction will lead to a modest growth profit in Q4 2024.

Rivian-Normal-plant
Rivian production at its Normal, Ill facility (Source: Rivian)

Entering the next growth stage

The company built 13,980 vehicles in the first three months of 2024 while delivering 13,588. Although this is down slightly from Q4, Rivian expected deliveries to fall between 10% and 15%, yet they only dropped by 3%.

Rivian will go from three shifts to two when it reopens its Normal plant. However, all assembly line workers will remain.

“We are increasing the overall capacity and efficiency of our lines,” Tim Fallon, executive vice president of manufacturing in Normal, said. “Plus, we’re making a lot of upgrades to our vehicles, many that you won’t see, but they help us with our costs,” Fallon said, according to the Chicago Tribune.

Rivian’s president of manufacturing was speaking at an open house over the weekend at the facility, where it was showing off its next-gen vehicles.

Rivian-R2
Rivian R2 (Source: Rivian)

Rivian revealed its smaller, more affordable R2 last month with a starting price tag of around $45,000. Scaringe also had a Steve Jobs-like “one more thing” moment, revealing an even more compact and affordable R3.

“The R2 being at $45,000 is something that the vast majority of the population can look at as an option,” Scaringe said. “There’s a lack of choice, we believe, in that price category for really nicely done EVs.”

Rivian-Normal-plant
Rivian family. From left to right R1T, R1S, R2, R3, R3X (Source: Rivian)

Less than 24 hours after opening orders, Scaringe said the R2 received over 68,000 reservations.

Rivian decided to start production at its Normal plant rather than its new $5 billion facility in Georgia. Scaringe said the move will accelerate the R2 launch while saving the company $2.25 billion.

Scaringe reiterated his commitment to Normal and Georgia Saturday, hinting R2, and even R3, could continue being built in Normal even after the GA facility goes live.

Rivian-R3X-design
Rivian R3X (Source: Rivian)

“We’re anticipating many hundreds of thousands of units of demand, ideally over a million units of demand across the globe. That means we will have at least two plants producing the vehicle,” Rivian’s CEO explained.

The R2 stole the show at Rivian’s first open house in Normal since Fall 2019 as potential buyers lined up to see the new EV.

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