Rivian mentioned on Wednesday it will minimize its workforce by 10% and forecast EV manufacturing this 12 months that broadly missed estimates, harm by downtime for manufacturing facility upgrades and slowing demand for electrical automobiles resulting from excessive rates of interest.
Shares of the corporate tumbled about 17% in prolonged buying and selling after Rivian mentioned it expects to provide 57,000 automobiles in 2024, nicely beneath estimates of 81,700 items, in keeping with eight analysts polled by Seen Alpha. It produced 57,232 automobiles final 12 months.
“We firmly believe in the full electrification of the automotive industry, but recognize in the short-term, the challenging macro-economic conditions,” CEO RJ Scaringe mentioned in a press release on Wednesday.
Amazon.com-backed Rivian has been burning via money to ramp up manufacturing of its R1S SUV and R1T pickup vehicles because it spends on constructing a brand new manufacturing facility in Georgia and loses 1000’s of {dollars} on each automobile it builds.
The corporate’s money burn comes at a time when demand for EVs has slowed, with Tesla CEO Elon Musk warning that prime rates of interest are making vehicles unaffordable.
After shying away from decreasing the worth of its automobiles final 12 months regardless of a value struggle sparked by Tesla, Rivian this month minimize the worth of its R1T pickup vehicles and R1S SUVs by $3,100.
In the meantime, Lucid additionally forecast manufacturing for 2024 that was a lot decrease than Wall Avenue’s expectations, even after it minimize costs of its Lucid Air luxurious electrical sedans final week.
Rivian’s money and money equivalents have been $7.86 billion on the finish of the December-quarter, in contrast with $7.94 billion within the previous three-month interval.
It additionally recorded a ten% fall in deliveries within the fourth quarter, lacking estimates, citing lack of deliveries to Amazon within the three-month interval to give attention to the vacation interval.
Nevertheless, income for the October-December interval stood at $1.32 billion, above Wall Avenue estimates of $1.26 billion, in keeping with LSEG knowledge.
Rivian has been posting a loss on each automobile it sells and expects to document its first quarter of constructive gross margin later this 12 months.
The corporate’s R2 platform, which is anticipated to be cheaper and smaller, is about to be unveiled early subsequent month.
The corporate reported a web lack of $1.52 billion for the fourth quarter ended Dec. 31, in contrast with a lack of $1.72 billion a 12 months earlier.