Rivian has become a major player in the rapidly evolving field of electric vehicle (EV) companies, grabbing attention with its innovative designs and promising outlook. As curiosity surrounding Rivian grows, one question often arises: How much cash does Rivian actually have?
Understanding the financial strength of a company like Rivian is crucial for investors. This article will explore Rivian’s cash position, including how much cash it has on hand and how important that amount is to the company’s current and future plans.
By gaining insights into Rivian’s cash reserves, we can better understand the company’s financial stability, strategic decisions, and potential to disrupt the EV market.
So, let’s dive into Rivian’s latest financial earnings release and get a glimpse of the green in their bank account.
The Rise of Rivian
Rivian was founded in 2009 by Robert “RJ” Scaringe. Under Scaringe’s leadership, the company has gone public.
Rivian went public with its initial public offering (IPO) on November 10, 2021, which raised close to $12 billion in funding. The company was valued at $66.5 billion after up to 153 million shares were sold at the IPO of $78.00. The shares listed on the exchange opened at $106.75.
With the stock’s closing price of $100.73 per share, the company was valued at almost $86 billion. The closing price was a nearly 30% increase over their offering price. At the time, this was more than Ford Motor Company’s market capitalization, which was also one of Rivian’s main investors.
Today, Rivian has a market capitalization of $22.24 billion (as of September 13, 2023). This also ranks the company as the 22nd most valuable automaker company in the world by market cap compared to other automakers.
Q2 2023 Financial Earnings Release
Rivian recently released its Q2 2023 financial earnings and reported a revenue of $1.12 billion, mostly due to the delivery of 12,640 vehicles. The company reported revenue of $364 million after delivering 4,467 vehicles in the same period last year.
But what is the company’s cash position?
Rivian’s Cash Position
So, how much cash does Rivian actually have? In its Q2 2023 earnings report, Rivian had $10.202 billion in cash, cash equivalents, and short-term investments on hand.
For a total of $11.3 billion in liquidity at the end of Q2, it also had around $1.1 billion in credit lines available. In comparison to $359 million during the same period last year, capital expenditures totaled $255 million in Q2 2023.
However, Rivian is burning through its cash very quickly. For the second quarter, the company had a negative free cash flow of $1.616 billion, compared to $1,563 billion in Q2 2022. Annualizing it brings the total negative free cash flow to nearly $6.5 billion. This means the company could burn through its current cash in just over 1.5 years if it brought its cash down to zero, which isn’t ideal for any company.
The solution to this problem would be for the company to raise more capital quickly!
Rivian Compared to Similar Companies
Rivian is a smaller and newer company compared to its competition. But let’s compare the company to its competitors to better understand how much cash Rivian actually has.
Tesla, the most valuable EV company in the world, has a total of $23.07 billion cash on hand, as per its Q2 2023 financial report. In contrast, Lucid has a cash reserve of $5.24 billion, which is much less than Tesla and Rivian.
While Rivian may have a lower cash reserve than most of its competitors, it has enough cash on hand to buy Alaska Airlines twice, with a market capitalization of $4.94 billion. In addition, Rivian would have enough money to buy the whole of Isuzu, which has a market cap of $10.09 billion!
Investing in the Future
Rivian’s financial success is about more than just increasing its cash. The company also invests in research and development, expanding production capacity, and expanding its charging infrastructure.
- Research and development: Rivian spent $444 million in Q2 2023 on research and development. This is an 18% decrease compared to the same period in 2022. The main cause of this decline was a $94 million drop in payroll and related expenses, which included stock-based compensation.
- Production capacity: Production and deliveries increased by 50% and 60%, respectively, from a quarter-over-quarter basis.
- Charging infrastructure: Rivian has adopted the North American Charging Standard (NACS), providing its customers access to Tesla’s more than 12,000 Superchargers from early Spring 2024. This gives Rivian drivers larger accessibility to charge their vehicles across the U.S. and Canada.
Rivian is also moving into international markets and broadening its product range. After partnering with Amazon, Rivian announced that more than 300 of its Electric Delivery Vans (EDVs) would be used to deliver packages in Germany.
The Bottom Line
The strength of Rivian’s finances and cash on hand will be critical to their capacity to carry out their goals. Rivian is well-positioned to continue its path in the automotive sector thanks to rising consumer interest in EVs and its partnership with Amazon.
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