Rivian ($RIVN) recently announced plans to raise $1.3 billion in cash by selling green convertible notes, despite indicating it had sufficient cash in last week’s earnings. Investors have reacted negatively to the news, with Rivian stock slipping over 10% following Tuesday’s announcement.
Rivian ended the quarter with over $12 billion in cash and equivalents after burning through $1.4 billion during the period. On its earnings call, the company said it was confident that its cash and cash equivalents could fund operations through 2025.
The EV start-up is looking to improve its capital situation further, and has already made a series of moves to conserve cash, including laying off 6% of its workforce earlier this year and reducing operating costs in the fourth quarter.
Rivian is now looking to raise $1.3 billion in cash through green convertible senior notes. Traditional convertible notes can be paid back in either cash or stock, or a mix of both, making it cheaper and simpler for start-ups like Rivian to raise funds. Meanwhile, “green bonds” offer additional benefits for investing in businesses using the funds for climate-related projects that help with the environment.
Building electric cars is incredibly capital-intensive, and Rivian will need to improve its profitability considerably going forward as it ramps production. The company is taking what it has learned so far with the R1 series and using it as the foundation for the R2 platform, and new technology like the Eduro drive unit, built in-house, is helping drive down material costs.
Rivian said it was aiming to build 50,000 vehicles this year, although an internal meeting suggested it could be around 62,000. The next few quarters will give us a better idea of how Rivian is improving its gross margins as it works to produce more cars at a lower cost.
FAQ
Q1. When will electric cars be available in the UK?
A1. Electric cars are already available in the UK and can be purchased from a variety of dealerships.
Q2. Where can I find electric car charging stations near me?
A2. You can find electric car charging stations near you by using online maps or apps such as PlugShare or ChargePoint.
Q3. Which electric car is the best?
A3. The best electric car depends on your individual needs and preferences. Some popular models include the Tesla Model 3, Nissan Leaf, and Chevrolet Bolt EV.
