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Shares of Rivian slid after the US electric-truck start-up forecast no growth in vehicle production this year and said its order book had shrunk.
The news is another sign of tougher conditions for the electric vehicle sector. Rivian went public in late 2021 with a market capitalisation of more than $100bn — bigger than Ford and General Motors. The company’s shares have since declined 85 per cent, and dropped a further 13 per cent in post-market trading after it released fourth-quarter results on Wednesday.
Rivian said it planned to produce 57,000 battery-powered trucks and vans this year, compared with 57,232 produced in 2023. It also announced a 10 per cent cut to its salaried workforce.
Chief executive RJ Scaringe said in an email to employees seen by the Financial Times that the business was facing “a challenging macroeconomic environment — including historically high interest rates and geopolitical uncertainty — and we need to make changes now to ensure our promising future”.
Rivian, which employs 16,700 hourly and salaried workers combined, declined to give the total number of employees affected.
Scaringe told investors on an earnings call that the company’s bank of orders had declined.
The lay-offs and lower-than-expected production projection come as EV sales are growing at a slower rate in the US. Consumers bought nearly 80,000 battery-powered vehicles in January, a 19 per cent increase from the 66,000 they purchased in January 2023, according to data from Argonne National Laboratory. Sales grew by 55 per cent between January 2022 and January 2023.
Consumers have hesitated for a variety of reasons, including worries about inadequate charging infrastructure and prices that outstrip similar cars and trucks with traditional engines — even with government subsidies. High interest rates have led to ballooning monthly car payments.
Ford and GM have pulled back on EV volumes and cut prices. Ford is reducing production of the F-150 Lightning, the electrified version of its best-selling pick-up truck, and this week it slashed prices on the Mustang Mach-E SUV. GM has delayed plans to build electric versions of its Chevrolet Silverado and GMC Sierra trucks.
Scaringe said that executives at the company still “firmly believe in the full electrification of the auto industry, but recognise in the short term the challenging macroeconomic headwinds”.
Rivian reported a net loss of $5.4bn in 2023, improving from a $6.8bn loss a year earlier. It held $9.4bn in cash and cash equivalents at the end of 2023, compared with $12.1bn at the end of 2022.
