Rivian Plans to Cut 10% of Salaried Staff as EV Rush Stalls
Rivian Automotive Inc. shares fell in early trading after the electric vehicle maker issued a disappointing production forecast and announced another round of job cuts.
Rivian's Production Forecast Misses Expectations
Rivian Automotive Inc., the maker of electric vehicles, has projected a production figure of just 57,000 vehicles for this year, much lower than analysts' estimate of over 80,000 units. This announcement has caused the company's shares to drop and highlights the challenges Rivian is facing in scaling production and managing losses in the current market.
Additionally, Rivian plans to reduce its salaried workforce by about 10%, marking its third round of job cuts in the past year and a half. The company's struggles with supply chain issues, along with the impact of high interest rates on consumer demand, have contributed to these difficulties.
Shift in Priorities for Rivian
Rivian intends to prioritize cost-cutting measures over the expansion of production volume this year. However, the company still expects to incur an adjusted loss of $2.7 billion. In an effort to mitigate the effects of high financing costs, Rivian has introduced a new leasing program.
CEO RJ Scaringe expressed optimism about the future demand for Rivian's higher-priced vehicle models, anticipating a rebound once interest rates decrease. He remains confident in the large premium SUV and premium truck market.
Lucid Group Inc. Disappoints with Outlook
Lucid Group Inc., another player in the electric vehicle market, also fell short of investors' expectations with its production outlook. The company expects to manufacture 9,000 vehicles this year, below analysts' projections. Lucid reported a loss of 29 cents per share in the fourth quarter and stated that it has sufficient liquidity to continue operations until at least 2025.
The underwhelming forecast resulted in a drop in Lucid's shares, highlighting the challenges faced by newer entrants in the EV market.
