Amazon-Backed Rivian Delays Output, Citing Supply-Chain Woes

(Bloomberg) -- Rivian Automotive Inc., the electric pickup maker backed by Inc., is pushing back production of its debut vehicle by two months to September because of supply-chain bottlenecks.

The startup also shifted the timeline for its second planned model, an electric sports-utility vehicle, from August until an unspecified time in the fall, according to a letter to customers on Friday. The company cited a shortage of components.

“The cascading impacts of the pandemic have had a compounding effect greater than anyone anticipated,” Chief Executive Officer R.J. Scaringe said in the letter, which was viewed by Bloomberg. “Everything from facility construction, to equipment installation, to vehicle component supply (especially semiconductors) has been impacted by the pandemic.”

The chip shortage has hampered automakers worldwide this year, forcing them to slow or temporarily shutter assembly lines. That’s had a significant impact on sales and left dealer lots with scant inventory of cars and trucks. In June, the lead time for chip delivery stretched to a record 18 weeks. Bloomberg reported in May that Rivian had experienced delays in receiving key parts because of backlogs at U.S. ports.

The Irvine, California-based company is a front-runner in a large pool of startups seeking to challenge Tesla Inc. in electric vehicles. Rivian has raised more than $8 billion from high-profile investors that also includes Ford Motor Co. and investment manager T. Rowe Price Group Inc. Bloomberg News has reported that Rivian is considering conducting an initial public offering this year, though it has yet to deliver a single vehicle to customers.

Rivian plans to build a battery-electric pickup called the R1T and deliveries were scheduled to start this month. Output of its first SUV, the R1S, had been expected to start in August.

The company also has a deal to build 100,000 electric delivery vans for Amazon, with 10,000 expected to be in service by the end of next year. Serial production of the vans has been due to start in the fall, and the retailer has been testing early prototypes. Scaringe on Friday didn’t mention the production outlook for the vans -- which Rivian doesn’t plan to sell to retail buyers.

All three models are to be built at a former Mitsubishi Motors Corp. plant in Normal, Illinois.

Scaringe acknowledged in Friday’s letter that launching three vehicle lines almost simultaneously was a complex task and said small issues have translated into much larger delays. Rivian will prioritize continued testing and quality-control measures over meeting self-imposed deadlines for deliveries, he wrote, noting that the company already has built hundreds of preproduction units.

EV leader Tesla experienced delays and what CEO Elon Musk called ”production hell” issues in 2017 with its first mass-market vehicle, the Model 3 sedan. Some owners complained about panel gaps and paint issues. Bloomberg has reported that Rivian is trying to avoid similar problems.

(Updates with details from CEO’s letter in ninth paragraph)

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