Daily Brief: Rivian Won’t Make As Many EVs As It Said It Would This Year, But It’s Still Worth More Than Ford And General Motors

Daily Brief: Rivian Won’t Make As Many EVs As It Said It Would This Year, But It’s Still Worth More Than Ford And General Motors

about 2 years ago3 mins

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Rivian admitted late last week that it won’t hit its production targets for this year, as the electric vehicle (EV) maker realizes how much easier it is to say things than do them…

What does this mean?

Here’s the trouble with never having sold a single EV before this month: Rivian – which raised $12 billion in its initial public offering (IPO) last month – revealed in its first quarterly earnings update that it’s been struggling to produce enough EV batteries. Layer supply chain issues on top, and it’s expecting to fall “a few hundred” short of the 1,200 EVs it aimed to produce this year. And while the company still thinks it can fulfill its 170,000 existing orders by the end of 2023, it did concede that any new ones would probably get delivered the following year. So it’s all hands on deck: the EV-maker’s been on a hiring spree, and said it’d spend $5 billion on a new plant that could produce 400,000 EVs a year from 2024. Those costs didn’t appeal much either: investors initially sent its stock down 10%.

Rivian stock
Source: Google Finance

Why should I care?

For markets: Bless ‘em.

Rivian is still worth more than both General Motors and Ford, mind you. That has to hurt: they made $27 billion and $33 billion in sales respectively last quarter, which is – … carry the one… – $27 billion and $33 billion more than Rivian. Analysts reckon it’s because investors expect Rivian to pull a Tesla, but those are some big tire tracks to fill.

Rivian value
Source: The Wall Street Journal

The bigger picture: Ford talks to the hand.

If Rivian’s the TikTok star saying it’ll be bigger than the Beatles, Ford is the backwards cap-sporting geriatric promising to be BTS: the carmaking stalwart said last week that it’s aiming to eventually overtake Tesla’s EV sales. Take a chill pill: Tesla has already produced well over 600,000 EVs this year, and Ford’s not expecting to get jiggy with that number until 2024.

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FedEx Beat Expectations, Even With All These Labor Shortages

FedEx image

FedEx reported better-than-expected quarterly earnings late last week, as the US delivery company shows investors just how much it has to offer.

What does this mean?

FedEx can’t just coast by on its raw sex appeal anymore: the company has had to up wages to win over staff, meaning it spent around $470 million more on labor shortage costs than the same time last year. But FedEx is more than just a pretty face, and the company shrewdly upped sales to smaller customers who typically pay more for its services than big ones who demand discounts. Keep in mind too that retailers were pretty desperate to lock in deliveries ahead of the festive season, and FedEx was more than able to bump up its prices without losing business. What a catch: its overall revenue came in 14% higher than the same time last year.

Why should I care?

For markets: FedEx’s comeback.

FedEx said it’s expecting workforce shortages and their costs to clear up by the middle of next year, which can’t come soon enough: new data has shown that FedEx’s deliveries were on time just 86% of the time in the second half of November, versus UPS’s 96%. That might partly be why FedEx’s stock is down 4% this year, compared to its rival’s 27%. At least one new development might help redress that imbalance: FedEx announced on Friday that it’d be buying back $5 billion worth of its own shares, and investors – whose shares will become more valuable as the supply dwindles – sent its stock up 6%.

FedEx stock
Source: Google Finance

The bigger picture: Oh nomicron.

The UK has certainly been keeping FedEx busy: data out on Friday showed that British retail sales were 1.4% higher in November than the month before – well above the 0.8% economists were expecting. Brits might want to enjoy it while they can, because analysts think the country’s Omicron-driven surge in cases could spell a drop-off in the next few months.

UK retail sales
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