Rivian slashes production outlook, announces job cuts as EV demand wanes

Rivian (RIVN) inventory tanked after the bell on Wednesday after the electrical journey automobile maker reported combined fourth quarter outcomes and a manufacturing and revenue forecast that missed Wall Road expectations.

Rivian mentioned it sees automobile manufacturing for 2024 hitting 57,000 models, effectively under the 80,000 models anticipated. When it comes to full-year profitability, Rivian mentioned it sees an adjusted EBITDA lack of $2.70 billion vs. $2.59 billion (est.), with capital expenditure outlays hitting $1.75 billion vs. $2.37 billion (est.). Rivian mentioned it will minimize 10% of salaried workers, citing financial uncertainty.

Rivian inventory fell over 15% in after-hours buying and selling.

For the quarter, Rivian reported top-line income of $1.32 billion vs $1.25 billion (est.), with an adjusted loss per share of $1.36 vs. $1.33 (est.). On an adjusted EBITDA foundation, Rivian reported a lack of $1.096 billion vs. $1.05 billion (est.), narrower than final 12 months’s $1.46 billion loss.

A Rivian R1S electric sports utility vehicle (SUV) charges at a ChargePoint, Inc. public EV charging station in Redondo Beach, California on June 12, 2023. (Photo by Patrick T. Fallon / AFP) (Photo by PATRICK T. FALLON/AFP via Getty Images)

A Rivian R1S electrical SUV fees at a ChargePoint, Inc. public EV charging station in Redondo Seaside, Calif., on June 12, 2023. (PATRICK T. FALLON/AFP through Getty Photos) (PATRICK T. FALLON through Getty Photos)

“We made nice progress in 2023 regardless of financial headwinds, and we’re excited in regards to the 12 months forward. We firmly imagine within the full electrification of the automotive business, however acknowledge within the short-term, the difficult macro-economic circumstances,” Rivian CEO RJ Scaringe mentioned in assertion. “We’re aggressively centered on driving price effectivity all through the enterprise, reaching optimistic margins and constructing our go-to-market operate to assist our long-term progress.”

When it comes to its money cushion, Rivian mentioned it had $7.86 billion in money and money equivalents on the finish of This autumn, down from the $9.1 billion it had on the finish of Q3.

Some automobiles in Q1 gained’t be deliverable to prospects as a result of they’re lacking elements; they are going to be delivered quickly thereafter.

Earlier this month, Rivian reported 13,972 deliveries in This autumn, up considerably from a 12 months in the past however under consensus estimates of 14,300. Manufacturing was notably increased at 17,541 models, above estimates of 16,574.

Rivian CFO Claire McDonough mentioned on the earnings name that Rivian expects Q1 2024 deliveries to be 10% to fifteen% under This autumn 2023 deliveries.

“Throughout this quarter a few of the provider changeover that we’re engaged on (stemming from Q2 shutdown and enhancements), we’re going to begin to really feel the influence of them,” CEO RJ Scaringe added on the decision. Some automobiles in Q1 gained’t be deliverable to prospects as a result of they’re lacking elements, he mentioned.

For the 12 months, Rivian topped its manufacturing purpose of 54,000 with 57,232 automobiles produced in 2023 and deliveries coming in at 50,122. Rivian’s manufacturing forecast for 2024 is pegged at simply over 80,000 automobiles for the 12 months, per Bloomberg consensus estimates.

Rivian additionally reiterated its forecast of reaching “modest gross revenue” by the top of 2024. McDonough famous that the corporate was “very shut” to reaching optimistic contribution margin on the finish of the 2023.

Rivian’s profitability plans are paramount to the investor thesis for the corporate — and for its survival. Pure-play EV makers like Rivian, Lucid (LCID), and Fisker (FSR) have seen their shares hammered over the previous 12 months as a string of loss-producing quarters and a troublesome EV demand surroundings have left buyers with little endurance for underperformance.

On March 7, Rivian will reveal its extra inexpensive R2 EV, which will likely be constructed at its upcoming $5 billion Georgia meeting plant. Rivian is aiming for the plant to be accomplished by 2025, with new R2 automobiles rolling off the road in 2026.

“The implications of weak demand are vital,” Barclays analyst Dan Levy wrote in a notice to buyers final week, during which the funding financial institution downgraded Rivian inventory to Maintain from Purchase. Levy additionally raised considerations that Rivian might miss its 2024 goal for gross margin profitability.

“It seems that even nice product and tech will not be sufficient to keep away from the EV winter,” he mentioned.

Pras Subramanian is a reporter for Yahoo Finance. You may comply with him on Twitter and on Instagram.

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