Electric Vehicle Manufacturer Rivian Sees Stock Plummet Amid Supply Chain Woes
Rivian Automotive’s stock took a nosedive on Friday after the company released its third-quarter vehicle delivery update, which included a downward revision of its 2024 production guidance. Shares plummeted by as much as 8% before stabilizing at a 7.3% loss as of 10:30 a.m. ET. The electric vehicle (EV) maker now expects to produce between 47,000 and 49,000 units this year, a significant decrease from its initial target of 57,000.
Unlike many of its peers, Rivian’s issue lies not with demand, but rather with supply. A shortage of a critical component used in both its consumer R1 models and commercial delivery vans has disrupted production. CEO R.J. Scaringe had hinted at supplier issues during an investor conference last month, citing challenges with in-house motors and components.
Despite the setback, Rivian still expects to deliver more vehicles this year than it did in 2023, thanks to its existing inventory. This news provided some solace to investors, who had been bracing for a demand-driven downturn. However, the duration of the supply chain issue remains a significant concern.
The stock is unlikely to recover until Rivian provides more insight into its situation with its full third-quarter report on November 7. In the meantime, some investors may choose to adopt a wait-and-see approach.
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