Rivian Shares Tumble After Fourth-Quarter Results, 10% Job Cuts

(CTN News) – In a statement issued on Wednesday, Rivian said it would reduce its workforce by 10% and forecast EV production this year that missed estimates due to downtime during factory upgrades as well as slowing demand for electric vehicles due to high interest rates.

Rivian’s shares tumbled about 17% in extended trading after the company said it expects to produce 57,000 vehicles in 2024, a far cry from the 81,700 units forecast by eight analysts surveyed by Visible Alpha. Last year, 57,232 vehicles were produced by the company.

In a statement released on Wednesday, CEO RJ Scaringe stated, “We firmly believe in the full electrification of the automotive industry, but acknowledge the challenging macro-economic conditions in the short term.”

Rivian, which is backed by Amazon.com, has been burning through cash to ramp up production of its R1S SUV and R1T pickup trucks while spending on a new factory in Georgia and losing thousands of dollars per vehicle it manufactures.

As a result of Tesla’s cash burn, demand for electric vehicles has slowed, with CEO Elon Musk warning that high interest rates make cars unaffordable.

Rivian has decreased the price of its R1T pickup truck and R1S SUV by $3,100 this month after holding off on price reductions last year despite a price war sparked by Tesla.

Lucid also forecast production for 2024 that was much lower than Wall Street expectations, even after it cut the price of its Lucid Air luxury electric sedan last week.

At the end of the December quarter, Rivian had $7.86 billion in cash and cash equivalents, compared with $7.94 billion the previous three months.

Additionally, the company reported a 10% drop in deliveries in the fourth quarter, missing estimates, citing a lack of deliveries to Amazon during the three-month period in order to focus on the holiday season.

According to LSEG data, revenue for October-December was $1.32 billion, exceeding Wall Street estimates of $1.26 billion.

As of late this year, Rivian has reported a loss on every vehicle it sells, but it is expected to record its first quarter with a positive gross margin.

Early next month, the company will unveil its R2 platform, which is expected to be cheaper and smaller than its predecessor.

For the fourth quarter ended December 31, the company reported a net loss of $1.52 billion, compared with a loss of $1.72 billion a year earlier.

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