As I write this, it's only Tuesday morning -- but electric-vehicle start-up Rivian Automotive (RIVN -0.66%) is already having a tough week.
Rivian investors woke up Tuesday to two unhappy (and maybe related) bits of news.
First, did you know that the company's chief operating officer, Rod Copes, left in December?
We know that now, but only because a Wall Street Journal reporter noticed yesterday that Copes had updated his LinkedIn profile to say that he had retired.
When asked, Rivian confirmed Copes' departure. The company told the Journal that Copes' retirement had been planned for months, and that his responsibilities had been absorbed by others on the company's senior leadership team.
On the surface, that's fine. But why are electric-vehicle investors only learning this now?
There's no good answer to that question, which is why Rivian's shares fell sharply in after-hours trading on Monday after the Journal's report was published.
After all, a chief operating officer with decades of expertise in the vehicle-manufacturing business might be expected to play a key role in the ramp-up of production, which is what Rivian is working on right now.
At least Rivian warned us about the second one
Speaking of Rivian's production ramp, there's a second unwelcome piece of news, and it's possible that it's related to Copes' departure.
At least this one isn't a surprise, exactly.
Shareholders will recall that Rivian told investors last fall that it expected to manufacture about 1,200 vehicles in 2021. In December, it warned that it might fall short of that number because of supply chain issues. (Shareholders will recall that, too, because the stock fell over 10% on the news.)
Late yesterday, we found out that it did in fact fall short. Rivian said in a regulatory filing that it manufactured 1,015 vehicles in 2021, and that it delivered 920 of them before the end of the year.
Copes joined Rivian in 2020 from the Royal Enfield motorcycle company, where he had been president of its North American business unit. Copes had previously held a series of leadership roles, including manufacturing roles, in 19 years at Harley-Davidson. It seems pretty reasonable to assume that he knew a thing or two about production ramps.
Is the production shortfall somehow related to Copes' departure? We don't know.
Rivian needs to do better at keeping investors informed
I've said before that in the grand scheme of things Rivian's 2021 production shortfall is no big deal. The company is clearly more or less on track with its production ramp, early customers are reportedly very happy with their vehicles, and reviews of the R1T electric pickup have been quite positive.
But you wouldn't know it to look at Rivian's stock chart.
All things considered, Rivian has executed pretty well so far. But the way the company handled Copes' departure is worrisome. Successful public companies tend to be very good at managing their investors' expectations. Part of doing that is keeping investors informed of important developments.
If Copes' retirement was in fact planned for months, as Rivian now says, the company should have told us in advance -- or at the very least, right after he left. The fact that it didn't was an error -- a minor one, in context, but still an error.
Let's hope that the company resolves to do better from here.