Inside Rivian and Ford’s Plants, as They Race to Build EVs Faster | WSJ

foreign customers are waiting for trucks and SUVs just like these and many have sat on that wait list for more than a year currently we're in body shop this is our one body shop that we're looking at right now the electric vehicle company is now burning through cash rushing to fill those orders it's a startup trying to prove it can build vehicles at scale without having ramped up before it definitely pressure that's felt that felt on the floor it's felt by the entire team so what is the company doing to build faster and can it become what investors want it to be the Tesla of trucks before its competition I toured rivian's plant and visited Ford's EV facility to find out rivian's Factory in Normal Illinois was previously home to Mitsubishi which built cars here until 2015. remnants of that facility like a large part stamping machine remain but much of the plant in the process for making rivian's three vehicles the r1t r1s and Amazon branded commercial van are new as is Tim Fallon who was brought into rivien in February after 16 years at Nissan what's job one right now job one right now is is um I'll say I don't want to say finishing the ramp outside continuing the ramp and getting to stability may be defined for us what stability means in us in a factory stability to me is I want I want people I want all of my team members technicians to come in and see the exact same thing they saw yesterday the parts in the same place the right number of Parts everything running appropriately and really being able to get into that Rhythm and really do the dance of building vehicles that starts with stamping from there robots piece together the parts to form the body This is highly automated all of the welding is automated the trucks eventually end here the general assembly line where items including seats are locked into place getting this entire process to run smoothly has been a challenge for ribbian earlier this year manufacturing issues sometimes left workers idle for hours looking back I mean we'd hear about issues with parts you know sequencing essentially like not being able to get the right parts to the right place on the line at the right time I'm wondering how you handle that if it's fixed where you're at in that process there's no doubt there were there were significant issues in the past and there are still some issues that we're working through but they've gotten significantly better and you know as we continue to audit our processes and we continue to refine those processes and get better we definitely see fewer and fewer interruptions to our production because of it a snarled supply chain and inflationary pressures have made this ramp even more challenging Fallon says rivian in March cut its production guidance to 25 000 vehicles for the year last quarter It produced seven thousand which means it must now build more than 10 000 Vehicles this quarter to hit its Target rivien says it's on track to hit its goal but this Factory has the capacity to produce six times that 150 000 Vehicles a year to get there rivian says it's bringing in more equipment and has recently added a second shift throughout the facility can you boil it down to what it is that would keep you from instead of doing 25 000 this year doing doing 50 000. it's the working with our supply chain and then also the ability to get the second shift on and really get everything ramped up to that second shift so that increasing productivity that we'll see throughout the rest of this year and into next year will allow us to consistently be able to get the vehicles out to our customers at a higher rate than we have been and then we're looking at that what is the capacity that we need to be at to continue to fulfill that demand that hopefully will continue to be ever increasing demand for our vehicles after the factory tour we borrowed an r1t to travel back to Detroit a couple stops to charge made it a nine hour trip giving me plenty of time to reflect on what I saw my impression from being there is the place is super busy but also you know I don't think the lines moving at a rate that you'd see in a traditional Auto Plant you can tell it's a it's a young Factory that's still going through some Growing Pains but I think they feel pretty confident in the fact that they can scale up from here rivian CEO RJ scaringe has said he eventually aims to sell 10 million Vehicles a year around the world similar to Toyota today getting there will mean getting that plant and future facilities to full capacity it's a very different challenge to build a couple a week versus to build a hundred it's a very different challenge to build 100 a week versus 100 a day and so getting past the first stage doesn't necessarily prepare you for the second stage of more higher volume production ribbian is spending heavily to try to get there reporting a total net loss to 5 billion dollars in the first three quarters of this year if you're an investor in Rivier and you want to see market share you want to see a return on investment and so getting a foothold in the market and establishing yourself as the leader in EV trucks has to be the goal for them rivian was the first EV truck to Market but it's no longer buyers only option Ford the leader in gas power pickups is now selling ITV the F-150 Lightning from the moment we opened up lightning for reservations we saw a huge in Rush of customers we got over 200 000 reservations before we close the reservation book Ford started delivering trucks to reservation holders in May and has so far sold around 13 000 Lightnings including 2000 in November the company's Target 150 000 truck annual run rate by the end of next year or about 12 500 a month Palmer says that's multiple times the amount Ford originally planned what specific actions are you taking to get to that number the first one is we had to expand the building size then we have to reconfigure the lines to run at a much much higher speed and we of course had to get the materials for everything some of Ford's efforts like adding new equipment hundreds of workers and pushing speed mirror the moves rivian is making to boost output but Ford isn't a startup it's ramp to production many times before and next door to its EV facility is a plant cranking out gas engine F-150s a new truck rolls off the line here every 53 seconds my asset has really been advantageous that we have a very high speed production plan next door that builds many of the components for F-150 especially the aluminum body we would probably never have been able to increase So Many Factors speed if we didn't have the plant next door to rely on but those shared resources aren't enough to make an entire electric truck and Ford has grappled with its own supply chain constraints you may be aware of the chip shortage that the whole industry has been facing that's a real challenge for us and although we do prioritize the electric vehicle that's still a challenge for us when we're trying to ramp up to such a fast rate deciding how to allocate chips not to mention cash between EVs and internal combustion engine Vehicles is unique to the traditional automakers the challenge is more than just the development of the vehicles and the getting parts to it it's making this bet on will you be successful in these if you're traditional you're taking resources away from things that are making good money now to go towards this if you're a startup you've got very limited resources and you're putting big bets on this and to not take those bets almost guarantees that you lose right now Tesla is the model for a U.S company manufacturing EVS at scale It produced nearly 366 000 vehicles in the third quarter alone Tesla's cars have accounted for roughly 68 percent of EVS sold so far this year in the U.S the nice thing is the Tesla can't make enough Vehicles either and so you have opportunities there you're not going into a zero-sum game the pie is growing yeah and Tesla doesn't yet have a truck like the r1t giving rivien a chance to establish itself as the go-to name in the category and to keep investor in consumer dollars coming in we've talked to a number of consumers who have their name on four different lists they're just trying to get an electric truck and so it really is at least in these early days sort of a race to Market rivian and Ford's ability to speed up production and pull ahead of the competition will impact which vehicles customers drive or don't drive in the future [Music]

Channel: Wall Street Journal

Views: 273,724

Keywords: rivian, electric cars, ev, electric vehicles, ford, electric car, electricvehicles, rivian r1t, tesla, rivian r1s, rivian truck, evs, rivian r1t review, rivian electric truck, rivian suv, cheaper ev, rivian vs tesla, rivian review, rivian stock, electric truck, lfaut, wsj, the wall street journal

Id: QpDRMoBHVTo

Length: 8min 23sec (503 seconds)

Published: Tue Dec 20 2022