Rivian Automotive (NASDAQ: RIVN) stock tumbled in the extended trading Wednesday after the company issued lower-than-expected annual production forecasts.
Rivian (RIVN) recently disclosed plans to slash its workforce by 10%, alongside a bleak forecast for electric vehicle (EV) production in 2024. The company cited downtime for factory upgrades and decreased demand for electric vehicles due to high interest rates as contributing factors to the outlook.
The company anticipates manufacturing 57,000 vehicles in 2024, significantly lower than the analysts’ estimates of 81,700 units. Last year, the company produced 57,232 units.
Financial Challenges Amid EV Market Slowdown
Rivian, backed by Amazon.com, has been spending cash to scale up the production of its R1S SUV and R1T pickup trucks. This expenditure includes investments in constructing a new factory in Georgia. In addition, the company is experiencing significant losses on each vehicle it manufactures.
The company’s financial woes coincide with a broader slowdown in EV demand, with industry titan Elon Musk cautioning against the impact of elevated interest rates on consumer affordability.
The cash and cash equivalents of Rivian totaled $7.86 billion at the end of the December quarter, compared to $7.94 billion in the previous three-month period.
The company also reported a 10% dip in deliveries during the fourth quarter, attributing the shortfall to a deliberate reduction in Amazon deliveries to concentrate on the holiday season.
Rivian Aims for Positive Gross Margin
However, the revenue for the fourth quarter came in at $1.32 billion, surpassing Wall Street estimates of $1.26 billion, as per LSEG data.
Rivian, which has been operating at a loss per vehicle sold, anticipates achieving its first quarter of positive gross margin later this year. In addition, the company is set to unveil its much-awaited R2 platform, promising a more affordable and compact option, in the coming month.
Rivian reported a net loss of $1.52 billion for the fourth quarter ended December 31, compared to a loss of $1.72 billion in the corresponding period a year earlier.
Rivian (NASDAQ: RIVN) Stock Performance
RIVN stock plunged 15.27% in the extended trading Wednesday after closing the regular trade at $15.39. The traders had exchanged hands with 47,088,111 (47.08 million) shares compared to the average daily trading volume of 33.39 million.
