Rivian lays off employees, anticipates yearly production significantly lower than expected

Rivian, a key player in the automotive industry, announced a 10% reduction in its workforce and a lower-than-expected production forecast for electric vehicles in 2024. The company attributed this forecast to factory upgrades and decreased demand for EVs due to high interest rates. This news caused a 17% drop in Rivian’s stock during extended trading. Despite a strong belief in the full electrification of the automotive sector, CEO RJ Scaringe acknowledged the challenging short-term economic conditions.

Backed by Amazon.com, Rivian has been aggressively expanding its production capacity for the R1S SUV and R1T pickup trucks, resulting in significant cash burn. In response to slowing EV demand industry-wide, Rivian recently reduced the prices of its vehicles by $3,100, following a similar move by Lucid with its Lucid Air luxury electric sedans.

While Rivian’s cash reserves remain substantial, the company experienced a 10% decrease in deliveries in the fourth quarter of the previous year, partly due to prioritizing holiday demand over deliveries to Amazon. Despite this, Rivian reported higher-than-expected revenue for the same period.

Looking ahead, Rivian aims to achieve positive gross margins later in the year and will soon unveil its R2 platform, expected to be more affordable and compact. The company reported a net loss of $1.52 billion in the fourth quarter of 2023. The industry watchers eagerly anticipate Rivian’s future moves and how it will navigate the evolving landscape of electric vehicle production and sales.