Rivian Automotive Inc.’s stock fell about 15% after hours Wednesday after the EV maker posted a larger-than-expected quarterly loss and guided for producing slightly fewer vehicles this year than it did in 2023, saying rising interest rates and other economic pressures had “informed” its decisions for the year.
Rivian
RIVN,
said it would make 57,000 EVs this year; it produced 57,232 EVs in 2023. Wall Street estimates for 2024 production hover around 66,000 vehicles and 68,000 vehicles.
The quarterly miss “was driven by higher-than-expected costs,” as Rivian’s revenue came slightly ahead of consensus, CFRA analyst Garrett Nelson said. “Unfortunately, there’s little Rivian can do to improve its near-term financial performance absent stronger demand.”
Rivian lost $1.52 billion, or $1.58 a share, in the fourth quarter, compared with a loss of $1.72 billion, or $1.87 a share, in the same period last year.
Revenue rose to $1.3 billion, from $663 million a year ago.
FactSet consensus called for a loss of $1.35 a share on revenue of $1.28 billion.
“Economic and geopolitical uncertainties and pressures, most notably the impact of historically high interest rates, have informed our expectations for 2024,” the company’s executives said in a letter to shareholders announcing the results.
The company plans to cut operational costs and apply what it has learned to its new factory going up in Georgia, which is slated to start production in 2026. Rivian also said it plans to unveil its new mid-size SUV, the R2, “in just a few weeks.”
“R2 is designed to achieve a considerably lower price point and cost structure while building on the brand position established with our flagship” EVs, the R1T pickup truck and the R1S full-size SUV, the company said.
“We are certainly working very hard to deliver R2 in time,” Chief Executive RJ Scaringe said in a call following results. Rivian hopes to be as successful with the cheaper EV as it was with its first EVs, he said.
Rivian also said it would lay off about 10% of its salaried employees.
Analyst Tom Narayan with RBC Securities called the EV maker’s quarterly report “messy.”
The March 7 reveal of the R2 vehicle “will be important as the investment case relies on this higher-volume, affordable product,” he said. “As we have written, however, we do worry that this product will face stiff competition from [Detroit 3] offerings” and as legacy car makers offering traditionally powered and hybrid vehicles “are better positioned to weather the current EV slowdown.”
Rivian had company in disappointing investors about EV production for the year. Also Wednesday, EV startup Lucid Group Inc.
LCID,
guided for 2024 production of only about 9,000 vehicles, having produced 8,428 vehicles last year.
Rivian shares have lost about 19% in the past 12 months, contrasting with gains of around 24% for the S&P 500 index
SPX.