Rivian (RIVN) stock plummeted in after-hours trading on Wednesday after the electric adventure vehicle maker reported fourth quarter results that were underwhelming for investors. The company’s production and profit forecast for 2024 also failed to meet Wall Street expectations.
Rivian disclosed that it expects to produce 57,000 vehicles in 2024, falling short of the anticipated 80,000 units. Furthermore, the company projected an adjusted EBITDA loss of $2.70 billion, with capital expenditure outlays at $1.75 billion, both figures missing estimates.
The stock price fell over 15% in response to the news. For the fourth quarter, Rivian reported better-than-expected revenue of $1.32 billion, while its adjusted loss per share was slightly wider than anticipated at $1.36. However, its adjusted EBITDA loss was narrower than the previous year’s figure, and still positive.
Apart from financials, the company mentioned that it will cut 10% of its salaried staff due to economic uncertainty. Additionally, Rivian noted that it had $7.86 billion in cash and cash equivalents at the end of Q4.
Looking ahead, the company expects Q1 2024 deliveries to be 10-15% below Q4 2023 deliveries, citing supplier changeover as a factor.
Rivian CEO RJ Scaringe expressed optimism about the future, emphasizing the company’s commitment to driving cost efficiency, achieving positive margins, and building its go-to-market function.
However, recent challenges indicate a turbulent road ahead for Rivian. On March 7, the company will unveil its more affordable R2 EV, which will be produced at its Georgia assembly plant, expected to be operational by 2025.
The electric vehicle market has been challenging for companies like Rivian, resulting in skepticism from investors. Investment bank Barclays recently downgraded Rivian stock to Hold from Buy, raising concerns about the company reaching its 2024 target for gross margin profitability.
In light of these challenges, the overall outlook for Rivian remains uncertain, with the company’s success hinging on its ability to navigate a tough EV demand environment.
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Historically, the electric vehicle market has proven to be a volatile space, and companies like Rivian are navigating uncharted territory as they strive to meet aggressive production targets and achieve profitability. This push-and-pull dynamic between optimism and skepticism has become characteristic of the industry, making it an intriguing topic for investors and analysts alike.
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