Rivian said on Wednesday it will cut its workforce by 10% and forecast EV production this yr that widely missed estimates, hurt by downtime for factory upgrades and slowing demand for electric vehicles as a result of high rates of interest.
Shares of the corporate tumbled about 17% in prolonged trading after Rivian said it expects to supply 57,000 vehicles in 2024, well below estimates of 81,700 units, based on eight analysts polled by Visible Alpha. It produced 57,232 vehicles last yr.
“We firmly imagine in the complete electrification of the automotive industry, but recognize within the short-term, the difficult macro-economic conditions,” CEO RJ Scaringe said in a press release on Wednesday.
Amazon.com-backed Rivian has been burning through money to ramp up production of its R1S SUV and R1T pickup trucks because it spends on constructing a brand new factory in Georgia and loses hundreds of dollars on every vehicle it builds.
The corporate’s money burn comes at a time when demand for EVs has slowed, with Tesla CEO Elon Musk warning that top rates of interest are making cars unaffordable.
After shying away from reducing the worth of its vehicles last yr despite a price battle sparked by Tesla, Rivian this month cut the worth of its R1T pickup trucks and R1S SUVs by $3,100.
Meanwhile, Lucid also forecast production for 2024 that was much lower than Wall Street’s expectations, even after it cut prices of its Lucid Air luxury electric sedans last week.
Rivian’s money and money equivalents were $7.86 billion at the top of the December-quarter, compared with $7.94 billion within the preceding three-month period.
It also recorded a ten% fall in deliveries within the fourth quarter, missing estimates, citing lack of deliveries to Amazon within the three-month period to concentrate on the vacation period.
Nevertheless, revenue for the October-December period stood at $1.32 billion, above Wall Street estimates of $1.26 billion, based on LSEG data.
Rivian has been posting a loss on every vehicle it sells and expects to record its first quarter of positive gross margin later this yr.
The corporate’s R2 platform, which is anticipated to be cheaper and smaller, is about to be unveiled early next month.
The corporate reported a net lack of $1.52 billion for the fourth quarter ended Dec. 31, compared with a lack of $1.72 billion a yr earlier.
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