The quarterly loss for Rivian Automotive Inc. was bigger than expected, and the revenue was lower than expected. However, the company stuck to its sales and production forecast, and the stock managed to gain 1.6% after hours.
Rivian RIVN 0.55% also lowered its adjusted EBITDA forecast for the year to a loss of $2.825 billion to $2.875 billion. Profits have gone down because Rivian’s Normal, Ill., plant has “limited ability to leverage the fixed costs” and expects to make less this year.
Garrett Nelson, an analyst at CFRA, said in a note that even that lower estimate is “unrealistic.” Rivian also said it is still on track to make a gross profit in the fourth quarter. However, Nelson said that management might be “setting the bar too high,” and since EV tax credits are likely to disappear under new tax laws, they reiterated their “sell” rating on the shares.
CEO RJ Scaringe started the call after the results by talking to experts about their worries about “challenges” in the supply chain.
Scaringe told analysts, “This has been a tough quarter for us” because of problems with the supply production ramps, especially with one of the suppliers. These problems “have limited our production quite substantially.”
The company that makes EVs said it has made “meaningful
The company said in a letter to shareholders that it was “making progress” in getting parts for its next-generation electric vehicle (EV). It said that about 85% of the R2 line had been sourced and that costs were “currently in line with our cost targets.”
The company lost $1.1 billion, or $1.08 per share, in the third quarter. This is less than the $1.37 billion, or $1.44 per share, it lost in the third quarter of 2023.
From $1.34 billion a year ago, sales dropped to $874 million. Rivian said the drop was because it delivered more of its business electric van in the third quarter of last year after being closed in the first quarter.
As a whole, FactSet thought that the EV maker would lose 96 cents per share on sales of $992 million.
Rivian also said again that it wants to sell between 50,500 and 52,000 EVs this year. It also stuck to its prediction that it would make between 47,000 and 49,000 cars. This was down from 57,000 EVs in October.
Before the results came out, analysts wanted to know how Rivian’s partnership with Volkswagen AG VOW -2.62% was going. They wanted to know that Rivian was still meeting the goals needed to close the $5 billion deal. Scaringe said that the deal is moving along well.
Volkswagen’s investment and the cash and equivalents that Rivian already has on hand should be enough to keep the company running while the R2 is being built in Normal, Ill., and the midsize EV platform is being built in Georgia. This will “enable a path to positive free cash flow and meaningful scale,” the company wrote in a letter to shareholders.
People have seen Rivian’s deal with Volkswagen as a sign that they trust its technology.
This year, shares of Rivian have dropped 56%, while the S&P 500 index SPX 0.43% has gone up about 25%.
