Rivian lowers manufacturing forecast and misses third-quarter supply expectations

Workers assemble second-generation R1 vehicles at electric car maker Rivian's manufacturing facility in Normal, Illinois, USA, on June 21, 2024.

Joel Angel Juarez | Reuters

Shares of Rivian Automotive The value fell as much as 8.9% in intraday trading on Friday after the electric vehicle startup delivered fewer vehicles in the third quarter than analysts expected and cut its annual production forecast for 2024.

The company said the lower production target – from 57,000 units to 47,000 to 49,000 units – was due to a “production disruption due to a shortage of a common component” for its R1 vehicles and utility van.

“These impacts of supply shortages began in the third quarter of this year, have intensified in recent weeks and are ongoing. Due to the supply shortage, Rivian is revising its annual production forecast to 47,000 to 49,000 vehicles,” the company said in a statement.

Rivian shares recovered some earlier losses to close down 3.2% at $10.44, helped by a defying jobs report that buoyed markets.

A Rivian spokesman said the component causing the problem was part of its in-house engines, but declined to provide further details.

Rivian CEO RJ Scaringe noted issues with a number of suppliers during a Morgan Stanley investor conference last month: “We've had some issues with suppliers recently that have been challenging, and in particular a couple of issues related to our in-house engines .” with some of the painful components and a reminder of how difficult a multi-tiered supply chain can be.”

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Rivian, Tesla and GM stocks in 2024.

Despite the shortage, the company reiterated its annual delivery forecast of low single-digit growth compared to 2023, which is expected to be in the range of 50,500 to 52,000 vehicles.

Rivian disclosed the component shortage as part of its third-quarter vehicle production and delivery reporting.

The company produced 13,157 vehicles at its manufacturing facility in Normal, Illinois, and delivered 10,018 vehicles during the period ended September 30. Analyst estimates compiled by FactSet expected deliveries of 13,000 vehicles in the third quarter.

Rivian shares have fallen 56% in 2024 as demand for electric vehicles has been slower than expected and the company has burned through a significant amount of cash.

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