Rivian Slashes Production Outlook as EV Demand Wanes

Key Points

• Production Cut: Rivian reduces 2024 vehicle production outlook to 57,000 units, sparking investor concerns.
• Profit Forecast: Rivian forecasts adjusted EBITDA loss of $2.70 billion, leading to job cuts amid economic uncertainty.
• Financial Performance: Fourth quarter results show mixed revenue and narrower adjusted EBITDA loss, but stock plummets over 15% in after-hours trading.

Rivian, the electric adventure vehicle manufacturer, sent shockwaves through the market after announcing a significant cut to its production outlook for 2024, accompanied by a bleak profit forecast. The company's decision to slash production targets and the subsequent announcement of job cuts have raised concerns among investors about the sustainability of the electric vehicle (EV) market.

According to Rivian's latest projections, the company anticipates producing only 57,000 vehicles in 2024, a stark contrast to the initial expectation of 80,000 units. Additionally, Rivian foresees an adjusted EBITDA loss of $2.70 billion for the full year, significantly wider than analyst estimates. The company also disclosed plans to reduce its salaried workforce by 10% due to prevailing economic uncertainty.

Following the earnings report, Rivian's stock plummeted over 15% in after-hours trading, reflecting investor apprehension about the company's financial outlook and operational challenges. Despite reporting top-line revenue slightly above expectations for the fourth quarter, Rivian's adjusted EBITDA loss remained a cause for concern.

Rivian's CEO, RJ Scaringe, expressed optimism about the company's long-term prospects despite the near-term economic challenges. He emphasized the importance of driving cost efficiency and achieving positive margins to support Rivian's growth trajectory amid evolving market dynamics.

Despite the production setback, Rivian managed to exceed its delivery targets for the fourth quarter, demonstrating strong operational performance. However, the subdued production outlook for 2024 and the widening loss margins have prompted investors to reassess Rivian's position in the competitive EV landscape.