What happened
For the second day in a row, shares of electric truck start-up Rivian (RIVN 3.18%) are rolling downhill. Down 5.4% as of 11:40 a.m. ET on Wednesday, the speed of Rivian stock's slide seems to be accelerating since yesterday.
You can thank InsideEVs.com for that -- and also Rivian itself.
So what
In a midday story yesterday, the electric cars news site reported on an email sent out by Rivian CEO RJ Scaringe to Rivian customers who had ordered "Adventure and Explore Package" models of R1T electric pickup trucks and R1T electric SUVs.
"In order to serve the largest number of preorder holders," advised the CEO, "we will be prioritizing building [trucks equipped with] the Adventure Package with Large pack battery during the next year," and postponing production and delivery of trucks equipped with the even bigger "Max" battery pack.
Rivian noted that Max battery pack orders constitute "approximately 20% of our preorders." And those preorders will now have to wait until 2023 for delivery.
Now what
That works out to as long as a five-year wait for Rivian's earliest customers, who ordered their R1Ts and R1Ses with Max battery configurations back in 2018. It also opens up two possible scenarios for Rivian, neither of which would be very great news for the stock:
Option 1: Rivian "Max" customers can convert their orders to "Large" orders and (hopefully) get their trucks in 2022. This option would cost Rivian the $10,000 price difference between Max and Large, however -- and times 20% of Rivian's 71,000 preorders, that probably works out to about $142 million in lost revenue for Rivian.
That's bad, but option 2 could be even worse: Customers who don't want to wait an extra year for delivery for more range may decide to cancel their orders outright, and buy a Tesla SUV instead -- or a General Motors Hummer, or one of the many, many other new EV models opening up for sale this year.
Most likely, Rivian's production delay will result in a mix -- some customers choosing option 1, and others option 2 -- and the end result will be the worst of both worlds for Rivian: less revenue than it had anticipated in 2022, and more than a few customers defecting to other brands.