Electric Vehicle Manufacturer Rivian Faces Challenges, Cuts Production Forecast
Rivian, a leading electric vehicle startup, has reduced its full-year production forecast and delivered fewer vehicles in the third quarter than anticipated, citing parts shortages and slowing demand for electric vehicles. The company’s stock plummeted over 6% in premarket trading, adding to its more than 50% decline this year.
The parts shortage, affecting Rivian’s R1 SUV, R1T pickup trucks, and delivery vans, began in the third quarter and has worsened in recent weeks. As a result, Rivian now expects to produce between 47,000 and 49,000 vehicles this year, down from its initial forecast of 57,000. This revised forecast means the company will produce fewer vehicles than it did last year.
The electric vehicle industry as a whole is facing challenges, with slowing growth in demand attributed to high interest rates driving consumers towards more affordable hybrid options. Industry leader Tesla also missed quarterly delivery estimates earlier this week.
In an effort to streamline its manufacturing process and reduce costs, Rivian closed its Normal, Illinois facility for three weeks in April. The company is focused on increasing production of its R1 models while preparing to launch its smaller R2 models in 2026.
Rivian delivered 10,018 vehicles in the quarter ending September 30, falling short of analysts’ estimates of 12,078. Despite this, the company reaffirmed its annual delivery forecast of 50,500 to 52,000 vehicles. However, this is below analysts’ expectations of 53,491.
A significant investment from Volkswagen, worth up to $5 billion, is expected to bolster Rivian’s cash reserves and drive the company towards cash-flow positivity. Rivian aims to achieve its first gross profit in the last quarter of 2024.
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