Rivian disclosed a reduction of its workforce by 10% and projected an annual electric vehicle (EV) production number that fell significantly short of expectations. The lowered forecast is attributed to necessary factory upgrades and a deceleration in EV demand influenced by rising interest rates.
Post-market trading saw Rivian shares decline by approximately 17% following the announcement of an anticipated 57,000 vehicles to be produced in 2024. This figure starkly contrasts with the 81,700 unit forecast by analysts surveyed by Visible Alpha. Rivian’s production last year amounted to 57,232 vehicles.
“The challenging macro-economic conditions are recognized, although we remain steadfast in our belief of a fully electrified automotive future,” stated RJ Scaringe, Rivian CEO.
Rivian, supported financially by Amazon, is expending significant capital to increase production of its R1S SUV and R1T pickup trucks, along with constructing a new factory in Georgia. This expenditure is further compounded by the loss incurred on every vehicle produced.
Rivian reduced prices of its vehicles only recently by $3,100. Comparatively, Lucid has also adjusted its 2024 production outlook to figures below Wall Street predictions, even after slashing prices on its Lucid Air sedans, reports CNBC.
The EV automaker reported a cash reserve of $7.86 billion at the end of the December quarter, a slight decrease from $7.94 billion in the previous quarter.
The company also reported a 10% decrease in fourth-quarter deliveries, citing a strategic choice to refrain from delivering to Amazon during the holiday season. Despite this, Rivian’s revenue reached $1.32 billion in the October-December quarter, surpassing the $1.26 billion anticipated by Wall Street, according to LSEG data.
Rivian continues to operate at a loss per vehicle sold but anticipates reporting a positive gross margin within the year. The forthcoming R2 platform, expected to be more cost-effective and compact, is slated for an early reveal next month.
For the quarter ending December 31, Rivian reported a net loss of $1.52 billion, an improvement from the $1.72 billion loss reported in the same quarter of the previous year. Things are not looking good for Rivian as it turns out making EVs at mass scale is difficult. Best of luck for Rivian though as it continues to battle through major headwinds.
