Rivian to move staff to Illinois in a bid to boost production: Report

Yahoo Finance’s Pras Subramanian joins the Live show to discuss reports that Rivian will move staff to Illinois in an effort to boost production.

Video Transcript

- Let's talk about another comedy that we're watching, that is Rivian. Its production facility in Normal, Illinois forecasting 2023 production below analyst estimates. Now, the company is looking to move part of its manufacturing and engineering team to the facility in a bid to speed up production. That's according to reports from "The Wall Street Journal". Yahoo Finance's Pras Subramanian has the details on what's going on here. Pras.

PRAS SUBRAMANIAN: Hey, Julie, how are you doing. So I'm actually about 150 miles outside of that Rivian plant. I'm in Chicago, Illinois, not too far away from there. But yeah, this is a big deal with the Journal reporting that the Rivian wants to move that manufacturing, engineering staff to the Illinois factory. They want to speed up production.

And this would entail moving staff from around the country from places like Michigan, Illinois Virginia, to Normal, Illinois. Not sure how many people would actually make the move, the Journal is reporting. But that for those who won't do it, they're offering severance. So they'll basically have to leave the company if they don't want to do this move and help out at the plant.

So, you know, what's at stake here is basically, like I said, if boosting efficiency, making more trucks, they barely missed their 25,000 production target goal of 2022. Looking at 50,000-year, doubling that, maybe more potentially at Normal for 2023.

The goal is here to make these trucks cheaper. They're losing a lot of money, spending a lot on CapEx. And even CEO RJ Scaringe just talked about, it isn't capital-efficient to operate the plant the way they are right now because they're just not making enough vehicles to sort of spread across those costs.

- And Pras, what's at stake for Rivian if it falls behind in the EV pickup market?

PRAS SUBRAMANIAN: So Rivian was one of the first out of the gates here with an EV pickup, right, and then the Ford F-150 Lightning joined them. But what's happening now is you're going to see the Silverado EV come out this year, as well as Tesla Cybertruck. And Tesla has proven that they can actually make EVs at scale. So we'll see how fast they can ramp up that production. In addition to the Ram pickup coming next year.

So a lot happening from a competition point of view. They might lose out on their first-mover status if they can't keep up production and make enough of these trucks, which are, by the way, more expensive than the other sort of work trucks that Chevy and Ford will make.

- All right, Yahoo Finance's own Pras Subramanian, tracking all things Rivian and, of course, getting around point A to point B. Pras, appreciate it.