Rivian’s Production Woes Continue: Misses Q3 Delivery Targets
Rivian Automotive, the electric vehicle startup, faced a significant setback as its shares dropped by 8.9% following lower-than-expected vehicle deliveries in the third quarter of 2024. The company revised its annual production forecast, citing a production disruption due to a shortage of a shared component for its R1 vehicles and commercial van.
In a statement, Rivian disclosed that the supply shortage issue, which began in the third quarter, has intensified in recent weeks, leading to the adjustment in its annual production guidance from 57,000 units to a range of 47,000 to 49,000 vehicles. The company’s spokesperson mentioned that the problematic component is part of its in-house motors, but declined to provide further details.
CEO RJ Scaringe acknowledged challenges with several suppliers, particularly in-house motors components, during a recent investor conference. He highlighted the complexities of a multi-tiered supply chain and the difficulties it can pose.
Despite the production hurdles, Rivian maintained its annual delivery outlook, expecting low single-digit growth compared to 2023, with deliveries projected to fall between 50,500 and 52,000 vehicles. The company reported producing 13,157 vehicles and delivering 10,018 vehicles in the third quarter. This figure fell short of analysts’ estimates, which anticipated 13,000 deliveries.
The stock performance of Rivian has been lackluster in 2024, with a 56% decline attributed to slower-than-expected electric vehicle demand and substantial cash burn. The industry is closely monitoring Rivian’s ability to address supply chain challenges and fulfill its revised production targets.
Experts caution that supply chain disruptions can have far-reaching implications for the company’s operations and market competitiveness. The ongoing component shortage underscores the vulnerability of complex supply chains and the importance of robust contingency plans.
As Rivian navigates these challenges, stakeholders await further updates on the company’s efforts to mitigate the supply chain issues and achieve its production and delivery targets. The broader industry will be monitoring how Rivian’s response to these challenges shapes its trajectory in the competitive electric vehicle market.