Rivian, Lucid eye finance growth

EV manufacturers Rivian Automotive and Lucid Motors are expanding the scope of their finance arms as deliveries increased in the fourth quarter. Rivian to expand leasing Rivian offers leasing on select R1T and R1S models across 15 states and provides a $7,500 discount on eligible lease transactions through Rivian Financial Services , according to the company. Leasing has helped boost Rivian’s finance activity, Claire McDonough , chief financial officer, said during the company’s fourth-quarter earnings call on Feb. 21. “We've been encouraged by the financing revenue streams, as evidenced by the ongoing straight financing of our vehicles,” she said. “The introduction of leasing, which we launched in November, has been a key enabler for us driving a greater share of our financing penetration across all Rivians sold.” The Irvine, Calif.-based EV manufacturer plans to expand leasing “more broadly” soon, as it is one of the company’s “most requested financing options,” according to Rivian’s earnings release. Rivian established Rivian Financial Services through a private-label financing arrangement with Chase Auto in January 2021. The lender did not break out financial services data in the Q4 earnings release. The company delivered 13,972 vehicles in the fourth quarter, up 73.5% year over year, while production increased 75.1% YoY to a total of 17,541 vehicles, according to the manufacturer’s sales reports. Full-year deliveries soared 146.5% YoY to 50,122 vehicles and the company produced 57,232 vehicles, up 135.2% YoY and exceeding the most recent full-year production guidance of 54,000 cars. The company expects to produce 57,000 vehicles in 2024, about in line with its 2023 output, according to the release. The guidance is below Bank of America ’s estimated production forecast of 67,000 units, according to a global research note published today. “This implies no progress in ramping production in 2024,” the note states. Rivian plans to cut 10% of its salaried workforce amid static demand, Chief Executive RJ Scaringe said during the call. “Compared to 2023, we anticipate consumer and commercial vehicle deliveries to grow by low single digits,” McDonough said. Rivian is delivering the rest of its backlog of vehicles while preparing to fill new orders through the remainder of the year, Scaringe said. “We've created the R1 Shop, which allows some of the more common build combinations to be put in there to allow customers to get access to those vehicles more quickly,” he said. “Managing that dynamic of customers wanting to have the immediate gratification of when they buy a vehicle, they get it within a week or two, along with customers that have been waiting for, in some cases, two or three years. That balance has been something we're learning to navigate, and we do expect to continue to have to manage that balance over the course of the year.” Rivian had $10.5 billion in total liquidity in Q4, including capacity on its asset-based revolving credit facility, according to the release. Shares of Rivian Automotive [ Nasdaq: RIVN ] were trading at $11.45 as of market close today, down 25.6% from market open. The company has a market capitalization of $11 billion. Lucid enhances finance tech Luxury EV manufacturer Lucid Motors is working to implement a new technology platform as the company streamlines financing through Lucid Financial Services . “The Lucid Financial Services team has been working to enhance and simplify the customer financing experience, significantly reducing the customer cycle time to finance vehicles,” Chief Executive, Chief Technology Officer and Director Peter Rawlinson said during a Feb. 21 Q4 earnings call. “We are able to get a customer through their purchase journey from the time they placed the order to the time they completed delivery walkout in about three hours.” The faster financing process has been active in “select markets since Q4,” Rawlinson said, adding that Newark, Calif.-based Lucid plans to expand the process to leases and other loan markets by the end of the first quarter. Lucid Financial Services was formed through a private-label deal with Bank of America in June 2022. The manufacturer did not provide details regarding its finance arm in the latest earnings report. During the fourth quarter, Lucid delivered 1,734 vehicles, up 19% sequentially, and produced 2,391 cars, up 54% sequentially, Gagan Dhingra , interim chief financial officer and principal accounting officer, said during the earnings call. Full-year deliveries rose 37% YoY to a total of 6,001 vehicles and production tallied 8,428 units, in line with its revised production guidance of between 8,000 and 8,500 vehicles, according to the release. Lucid set its 2024 production guidance to 9,000 vehicles, below Bank of America’s prior forecast but in line with revised estimates, according to the bank’s research note. Lucid had $1.4 billion in cash and cash equivalents as of Dec. 31, 2023, a decline of 21.1% YoY. Shares of Lucid Group Inc. [ Nasdaq: LCID ] were trading down 16.8% from market open at $3.08 as of market close today. Lucid has a market capitalization of $7.1 billion. Early-bird registration is now available for the second annual Auto Finance Summit East 2024 , May 1-3 in Nashville, Tenn., which gathers lenders, dealers and fintech innovators in an event designed to bring the power of technology to a cross-section of industry players. Early-bird pricing ends March 15. Visit AutoFinance.Live to learn more.

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