Last Friday, October 4th, Rivian announced they would be cutting their production forecast from 57,000 vehicles down to somewhere between 47,000 and 49,000, about an 18% drop. That’s a pretty steep drop, and Rivian’s stock plummeted 9% upon everyone hearing the news. The company blamed softening demand and a “parts shortage” for the reduction, which raised more questions. A parts shortage? What parts? Is this an industry-wide thing, and if so, why hasn’t any other company mentioned this? What’s going on here?
Well, now we know what’s going on, and the parts shortage is not industry-wide, nor is it about some rare, exotic part. In fact, it’s about he most common type of part you’ll find on anything electrical: wires. Specifically, copper wires, the kind used for windings in electric motors. There’s plenty of wire being made, but what looks to be a simple yet devastating “miscommunication” with a parts supplier has doomed Rivian to not being able to get this crucial resource, leading to the company scaling back their production forecast.
The supplier in question is Essex Furukawa and the product is “magnet wire,” which the company has been cranking out since 1896! Oh, and speaking of Essex history, here’s a fun little aside: in 1965, the company sponsored Ford’s racing team, and campaigned a 427 Cobra nicknamed “Ollie the Dragon!”
That’s pretty cool! But back to uncool things, like supplier chain problems. According to Transport Topics, a source who chose to remain anonymous said that the “carmaker miscalculated when communicating supply and demand needs with Essex,” which just kind of sounds like somebody gave the supplier the wrong numbers. Someone who – and I’m just speculating here – is probably not employed with Rivian anymore.
The demand for Essex Furukawa’s wire is strong enough that by the time Rivian realized the mistake, Essex’s resources were already devoted to producing the wire for other companies and Rivian was out of luck. Essex Furukawa appears to have been Rivian’s sole supplier for this copper wiring, and, according to Bloomberg, while Rivian did identify other possible suppliers for the wire, the short notice made ordering the wire cost-prohibitive. So, Rivian is stuck and has had to reduce production forecasts.
All of this could have happened from one email or phone call with bad numbers. One point of failure, with colossal cascading consequences, if you don’t mind the alliteration.
It’s kind of amazing that such a crucial part would only have a single supplier, but Rivian still isn’t at production levels, even when everything is going right, which would make that a necessity. Still, I suspect Rivian will be lining up some backup suppliers for crucial things like copper wire to prevent this from happening again.
Oh, one last thing, check out this great unidentifiable car on Essex’s website:
That’s even better than what the insurance companies make!
Man Finds Rivian R1T Apparently Washed Away By Flood. It’s In Way Better Condition Than You’d Think
Engineering Firm Munro & Associates Has Begun Tearing Apart A Rivian R1T; Here’s What They’ve Found So Far
Here’s Why That Rivian R1T Repair Cost $42,000 After Just A Minor Fender-Bender
Should’ve done like Ford: build them without the missing parts and send folks an IOU. If people complain their Rivian won’t go, just tell them they’re obviously charging them wrong. That oughta work for a few months.
AI car. I’m sure there’s an entire industry of AI stock images of realistic yet generic things.
Ladies and Gentleman, I present to you the 2024 Wagon Queen Family Truckster. You think you hate it now, but wait until you drive it!
Will Rivian survive? It’s hard to say. Their stock is nearing $10 a share again and EV mania seems to have cooled. I propose a PHEV R3 for the year of the hybrid. Maybe a gas engine from their buddies over in Wolfsburg?
“I must have put the decimal in the wrong place or something. I always do that. I always mess up some mundane detail.”
That last car looks like a TVR designer did some shrooms and decided they need a crossover.
TVR and Citroen had a baby.
Having unwound a few transformers and motors lately, it’s astonishing how much copper goes into those spaces and assemblies. Okay, not really amazing if you can comprehend that very fine wire can be wrapped hundreds and thousands of times in a relatively compact space, but it’s still neat to see it all spun out into one wild tangle. One home theater receiver’s transformer yielded about 560g of copper. I don’t know the gauge – 26, maybe – but it was a delight to ball it all up and melt it.
Seriously, thank you for clearing this up. When I read the news last week, I had all the same questions that led the article, and none of the potential answers made any sense.
It goes without saying that Rivian absolutely cannot afford to make such a blunder. What a devastating stroke of bad luck. I feel like it must have come down to a typo or miscalculation (such as a unit conversion) on a requisition form, because I’m sure the actual determination of the company’s wiring needs are arrived at (or seen by) more than one person.
They could just go talk to a local methamphetamine connoisseur. Those folks know where to find wires.
But for real, surely someone will hear this and sell them what they need for a massive upcharge.
Today’s quest: gather copper
Yeah, there has to be at least a few buildings in Detroit that aren’t completely mined out yet