Rivian Automotive (NASDAQ: RIVN) saw its stock slide 3% in pre-market trading Friday after the electric vehicle (EV) maker forecasts a surprise decline in annual deliveries for 2025, but said it expects to notch a modest gross profit as it slashes raw material and supply chain costs to boost efficiency.
Rivian expects to deliver between 46,000 and 51,000 vehicles this year, a decline from the 51,579 units it delivered in 2024. The figure falls below Wall Street expectations, with 15 analysts surveyed by Visible Alpha predicting 55,520 deliveries.
CEO RJ Scaringe pointed to a volatile economic and political landscape as the culprit. He told Reuters,
“We have a supply chain that does have a footprint in both Mexico and Canada, and so large tariffs being applied will just translate to higher costs for us.”
He added,
“There is such a high level of uncertainty that will ultimately impact consumer behavior and top-line revenue.”
The EV industry grapples with faltering demand as consumers pivot to more affordable gas-powered vehicles. The shift comes amid fears of rising inflation, spurred by potential tariffs from the Trump administration on imports from Mexico and Canada—two countries critical to Rivian’s operations. Additionally, the potential removal of EV tax credits, which support demand, could further dampen sales.
Overall, EV makers are staring at a tough market, with Tesla (NASDAQ: TSLA) reporting its first annual sales decline in 2024 and electric truck maker Nikola (NASDAQ: NKLA) recently filing for Chapter 11 bankruptcy due to cash burn, funding challenges, and sluggish demand.
Despite the gloomy forecast, Rivian (NASDAQ: RIVN) delivered positive news from its fourth quarter. The company achieved its first-ever gross profit, earning $170 million compared to a $606 million loss a year earlier. Revenue for the last three months of 2024 reached $1.73 billion, beating the average analyst estimate of $1.4 billion, according to LSEG data. Its software and services unit also doubled its revenue to $214 million compared to last year.
Looking ahead, the EV maker plans a month-long production pause in late 2025 to prepare for the launch of its R2 vehicle, a rival to Tesla (NASDAQ: TSLA) Model Y. Deliveries of the R2 are slated to begin early next year.
Meanwhile, Rivian’s joint venture with Germany’s Volkswagen Group, formalized last year, promises a $2 billion revenue boost over the next four years. The deal, backed by a $5.8 billion investment from Volkswagen, focuses on developing software and electrical architecture for future vehicles.
Vitaly Golomb, managing partner at Mavka Capital and a Rivian (NASDAQ: RIVN) investor, sees the delivery downgrade as a smart play. He said,
“I think they’re appropriately being just cautious because it’s unclear and they have no control over what’s going to happen politically here.”
