Rivian, the EV start-up company, reported earnings last week. The company has seen new orders accelerating since its IPO, with consumer orders for its pick-up truck (R1T) and passenger sports utility vehicle (R1S) increasing to 71k as of December 15, up from 55.4k at the end of October. Placing an order now means delivery in 2023, and 90% of reservation holders have never owned a Truck, highlighting the broad appeal of RIVN's products. 

However, Rivian's production plan has hit some early bumps and is expected to fall a few hundred vehicles short of the original ~1,200 R1 production target by year-end. Supply-chain delays and issues associated with adding R1S to the R1T production line affected output.

Bottom Line: Production hiccups are inevitable for EV start-ups, but we are surprised that RIVN faces some right off the bat. Over the near-term, production ramp is always THE biggest risk to the near-term story. Over the medium-term, however, we don't believe this impacts the outlook for the company. Compared to legacy auto OEMs, RIVN's highly vertically-integrated approach and direct-to-consumer model should address much larger markets (TAM) and command higher margins. We believe the potential to capture recurring revenue streams from software and services plays a vital role in driving TSLA's ~$1 trillion market cap. It also plays some role in Rivian's valuation.