Rivian cuts annual production forecasts due to parts shortages, low stock

Written by Zaheer Kachwala

(Reuters) – Rivian cut its full-year production forecast on Friday and missed third-quarter delivery forecasts due to parts shortages and slowing growth in demand for electric vehicles, sending shares of the startup down nearly 9%.

The company said that the shortage of the part used in the R1 SUV and R1T pickup trucks, as well as its delivery trucks, began in the third quarter and has become more severe in recent weeks. Rivian did not specify the part or supplier for the component.

Amazon.com-backed Rivian now expects full-year production to be between 47,000 and 49,000 vehicles, down from its previous forecast of 57,000 vehicles. The expected reduction means the company now expects to produce fewer vehicles than it did last year.

Slowing growth in demand for electric vehicles has affected the entire industry, with Americans coping with high interest rates turning to cheaper hybrid cars. US market leader Tesla also missed its quarterly delivery estimates earlier this week.

“The reduction in production guidance was significant and will likely raise a variety of questions surrounding RIVN’s ability to generate an overall profit,” said Garrett Nelson, senior equity analyst at CFRA Research.

The company said it plans to achieve its first profits in the last three months of the year. To aid in this effort, Rivian closed its only manufacturing facility, in Normal, Illinois, for three weeks earlier this year to streamline manufacturing processes and reduce the cost of building its vehicles.

Cutting costs is crucial for Rivian as it looks to overcome a demand slowdown and ramp up production of the R1 models, while preparing to manufacture smaller R2 models in 2026.

The company said it delivered more than 10,018 vehicles in the quarter ended Sept. 30, compared with estimates of 12,078, according to 15 analysts surveyed by Visible Alpha.

Rivian reiterated its annual delivery forecast of between 50,500 and 52,000 vehicles. Analysts had expected 53,491, according to Visible Alpha.

German automaker Volkswagen said earlier this year that it would invest up to $5 billion in Rivian as part of a joint venture that could help it bolster its cash reserves and turn cash flow positive.

(Reporting by Zaheer Kashwala in Bengaluru; Editing by Shinjini Ganguly)