Shares Of Rivian Drop After The EV Manufacturer Lowers Its Production Estimate And Misses Its Q3 Delivery Targets

In the midst of Friday’s midday trading session, Rivian Automotive witnessed a significant decline of over 6% in its share value. This downward spiral was triggered by the disappointment among analysts as the electric vehicle startup fell short of delivering the anticipated number of vehicles in the third quarter. 

Adding to the market’s concerns, Rivian also revised its production outlook for 2024, further dampening investor sentiment towards the company’s future prospects.

“This supply shortage impact began in Q3 of this year”

The business explained that a “production disruption due to a shortage of a shared component” for its R1 vehicles and commercial van was the reason for the lower production target, which was cut from 57,000 units to between 47,000 and 49,000.

The company stated “This supply shortage impact began in Q3 of this year, has become more acute in recent weeks and continues. As a result of the supply shortage, Rivian is revising its annual production guidance to be between 47,000 and 49,000 vehicles,” 

A representative for Rivian stated that the issue is being caused by a part of their internal motors, but he would not provide any other information.

Shares of Rivian are down by more than 50% in 2024

During a Morgan Stanley investor conference last month, Rivian CEO RJ Scaringe made references to issues with several vendors. 

He said “We’ve had a couple of supplier issues of recent that have been challenging and in particular, a few issues around our in-house motors with some of the components that have been painful and a reminder of just how a multi-tiered supply chain can be difficult.”

In spite of the shortfall, the company maintained its low single-digit growth forecast for yearly deliveries in comparison to 2023, when it anticipates deliveries to be between 50,500 and 52,000 vehicles. 

In its third-quarter vehicle production and delivery report, Rivian included information about the unavailability of some components.

At its Normal, Illinois, manufacturing site, the company built 13,157 automobiles and delivered 10,018 vehicles between September 30 and October 1. 

FactSet’s compilation of analyst forecasts predicted 13,000 car deliveries in the third quarter. Due to the company’s substantial capital burn and the unexpected slowdown in EV demand, Rivian’s shares have dropped by more than 50% in 2024.

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