Electric Vehicle Rivian Cuts Additional 10% Workforce... Annual Production Target Also Missed

Stock Price Drops Over 15% in After-Hours Trading

American electric vehicle manufacturer Rivian, backed by Amazon, announced a 10% workforce reduction and set an annual production target below market expectations. Rivian's stock price is currently down more than 15% in after-hours trading.

[Image source=Reuters Yonhap News]

According to Bloomberg and other sources, Rivian announced on the 21st (local time) that due to a slowdown in electric vehicle demand, its production volume this year will be around 57,000 units, similar to last year's 57,232 units. This figure falls far short of the 80,000 units forecasted by experts compiled by Bloomberg.

RJ Scaringe, Rivian's CEO, said during the earnings conference call, "Our business is not free from economic and geopolitical uncertainties," adding, "High interest rates have negatively impacted demand." Rivian also announced an additional 10% workforce reduction as part of cost-cutting measures. The company had previously carried out restructuring in 2022 and last year.

Rivian's Q4 revenue, released after the market closed that day, was $1.315 billion, exceeding Wall Street expectations. The quarterly net loss narrowed to $1.521 billion compared to the previous year. The net loss per share was $1.36, slightly worse than the expected loss of $1.33 per share. Additionally, due to rising parts costs and other factors, the estimated loss per vehicle delivered in Q4 was $43,373, significantly higher than the approximately $30,000 loss per vehicle in Q3.

Excluding interest, taxes, depreciation, and amortization, Rivian expects an adjusted annual loss of $2.7 billion. In response to concerns over slowing electric vehicle demand, Rivian also lowered vehicle prices earlier this month.

In particular, the annual production target falling short of expectations fueled concerns over earnings and immediately dragged down the stock price. On the New York Stock Exchange, Rivian closed down over 3% during regular trading and then plunged more than 15% in after-hours trading. As of the closing price that day, Rivian's stock had fallen 34% since the beginning of the year.

Meanwhile, Lucid, once considered a potential rival to Tesla alongside Rivian, also reported disappointing earnings and production targets on the same day. Lucid's Q4 revenue last year was $157.2 million, falling short of Wall Street forecasts. Its production outlook for this year is 9,000 units, a modest 6.8% increase from 8,428 units last year. Lucid closed slightly higher during regular trading on the New York Stock Exchange but fell more than 9% in after-hours trading.