To Increase Productivity, Rivian Use of Its Own Motors

April 4, 2023 | Industry News

Rivian Manufacturing in Normal, Illinois.

In Normal, Illinois, Rivian has a cutting-edge facility and a sizable order book, but there aren’t enough computer chips for its Bosch-produced motors to meet demand.

In an effort to alleviate the production bottleneck and cut expenses, the EV manufacturer is switching to an electric drive unit called Enduro it developed in-house, according to a report in Automotive News.

While the R1T was the first modern electric pickup truck, its design features a Bosch electric motor at each wheel that together produce 825 horsepower and a 0-60 mph time of 3 seconds.

The R1S uses the same setup. But a shortage of semiconductors for the motors is forcing customers to wait months for their vehicles, with many eventually cancelling their orders.

Since the R1T and R1S share their underlying architecture, both can be fitted with Rivian’s new Enduro drive unit in a two-motor arrangement, one at the front and one at the rear. The new motors will be used in both the R1T pickup truck and R1S SUV. The thought is nothing new, as Rivian’s commercial vans already utilize the Enduro motor.

Rivian continues to seek ways to increase production.

The drive to build more

The move comes as Rivian is looking to increase production and reduce expenses — and with good reason. Rivian burned through $6.6 billion in cash last year, leaving it with $11.6 billion at the start of 2023. According to estimates, this year, it will burn through another $6 billion in cash.

The company pledged to build 25,000 vehicles last year, but missed their stated goal, producing 24,337 units, with the company reporting a $1.7 billion net loss on revenue of $633 million in the fourth quarter of 2022. Yet the company built 9,395 EVs in the first quarter of 2023, restating their goal of producing 50,000 vehicles by the end of 2023. 

Overcoming logjams

The Rivian R1S and R1T share an underlying architecture.

This is why Rivian is looking at many parts of its operation to help increase production. 

In a related move, the startup automaker is consolidating its manufacturing engineering staff to its Normal, Illinois factory, according to a Wall Street Journal report in March.

Engineers were hired by Rivian during the COVID-19 outbreak wherever they could be found, and the company permitted them to work remotely. As a result, in addition to those who work at its Irvine, California headquarters and Normal, Illinois factory, employees are dispersed across the country in places like Michigan, Texas and Virginia.

As expected, not everyone is happy with relocating, and the company will pay severance to those employees, who will be replaced with new personnel. 

Rivian CEO RJ Scaringe in 2021.

But beyond increasing production and efficiency, the automaker also laid off 840 workers, or about 6% of its employees in February to reduce expenses, although manufacturing operations remained unaffected. Other moves to conserve cash included shelving a European project with Mercedes-Benz to build commercial vans. 

Price pressures

Then there’s the matter of price cuts, which are impacting the brand’s profits as well.

Tesla initiated the round of EV price cuts, reducing its tariffs on all four of its EV models. In response, Ford Motor Co. reduced the MSRP of its Ford Mustang Mach-E, but raised prices on certain versions of Ford F-150 Lightning. And General Motors cut the price of its 2023 Chevrolet Bolt by as much as $6,000.

Increasing competition from legacy automakers like Mercedes-Benz, Audi, BMW and General Motors is one reason behind Tesla’s price cut as its aging lineup faces fresh competition. 

But so far, Rivian has been able to resist following suit due to what company CEO RJ Scaringe said is the automaker’s “robust” backlog. That said, Rivian no longer states the number of orders it has on hand. The last time it did, November 2022, it declared 114,000 orders for its R1T and R1S in the U.S. and Canada.

The 2023 Rivian R1 T starts at $74,800, while the 2023 Rivian R1S starts at $79,800. Rivian’s stock price is down nearly 24% year-to-date, and lost more than 67% of its value in the past year.

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