Rivian Layoff 10% Staff and Lowers Production Forecast for 2024

[evguy]

Very disappointing to see the guidance, I didn’t care much about revenue and earnings but I expected much better from guidance. I truly hope this is a tactic from management to be very conservative and it’s not the most likely output. Expecting negative sales growth for a growing company is a disaster!

It's disappointing, but I think they're being even more conservative in forecasting than they were last year due to the interest rate uncertainties and other demand concerns.

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[Grabs10]

The IRA really hurt Rivian. Rivian would be the only one selling a pickup currently with $7500 credit which is a good selling point. It’s going to be a tough storm to weather for Rivian with lots of options.

 

[Florida Panhandler]

Expectation was 81K units so its lower by 24,000 units!

Also, Rivian $loss/vehicle increased by $5K/vehicle so now its -$43K/vehicle.

Frankly, I'm surprised that its not down more...

I bet the loss per vehicle widened because they started fulfilling all of the pre-IPO price orders like my delivery a month ago. The full price demand seems to have softened quite a bit along with the rest of the car industry in this price range and I bet we see price decrease announcements from Rivian soon.

 

[Biturbowned]

The shareholder letter reiterated profitability Q4 2024, but I have doubts.

 

[SANZC02]

So you predicted 57k production for 2024, aka flat vs last year?

Yes, they have been saying all along with the shutdown in Q2 and ramp up after through q3 that they were expecting an impact on build and delivery numbers.

Moving past a lot of the price protected vehicles and the cost savings from the refresh even being flat on builds they will net more money from those numbers.

 

[UnsungZero_OldTimeAdMan]

https://techcrunch.com/2024/02/21/rivian-lays-off-10-of-workforce-as-ev-pricing-pressure-mounts/amp/

Same news, but what is Peregrine?

https://techcrunch.com/2023/09/14/rivian-ceos-plan-to-make-evs-cheaper-starts-with-their-computers/

"Rivian CEO RJ Scaringe provided more details Thursday on the company’s plans to update the hardware in its EVs next year — under a program internally called Peregrine — that he says will result in major cost savings."

 

[Dark-Fx]

57,000 vehicle production guidance for 2024 was the single biggest reason for the stock fall

IMO this should mean a really good opportunity for Rivian to solve their initial quality issues.

 

[JackRussellRacing]

The IRA really hurt Rivian. Rivian would be the only one selling a pickup currently with $7500 credit which is a good selling point. It’s going to be a tough storm to weather for Rivian with lots of options.

Sinn Féin ?

I think you mean the I.R.S.

 

[SPITmadFIRE]

Sinn Féin ?

I think you mean the I.R.S.

No, they're talking about the Inflation Reduction Act...

 

[JackRussellRacing]

No, they're talking about the Inflation Reduction Act...

D'oh! too much gin tonight.

 

[mkg3]

I bet the loss per vehicle widened because they started fulfilling all of the pre-IPO price orders like my delivery a month ago. The full price demand seems to have softened quite a bit along with the rest of the car industry in this price range and I bet we see price decrease announcements from Rivian soon.

In 3Q, loss/vehicle was around $30K/vehicle.

Rivian has been delivering pre-March priced vehicles all along. In fact vast majority of their delivery to date are pre-March priced vehicles.

The biggest reason the loss/vehicle got worse is because Amazon delivery slowdown. In 3Q, revenue from Amazon was over $400M, and in 4Q, it was only just above $100M based on their financial provided.

Since the loss/vehicle is based on the total deliveries (R1 and EDV), and factory utilization, the number got worse. That said, the environmental credit increased significantly (to $39M out of total for 2023 of ~$70M, more than half of the total).

There were several really good questions that RJ dodged, like:

- why can't you pull R2 forward and not focus on R1
- what's the split between backlog and new orders that makes up 57K unit forecast
- have you thought about revisiting your 2021 product and expansion strategy, given that EV landscape has changed so much
- why are we not hearing anything about reducing opex (operations expenses)

All of these questions was responded by indirect and oblique comments by RJ. Claire was more to the point but was clearly held back and chose her words very carefully.

 

[Biturbowned]

Yes, they have been saying all along with the shutdown in Q2 and ramp up after through q3 that they were expecting an impact on build and delivery numbers.

Moving past a lot of the price protected vehicles and the cost savings from the refresh even being flat on builds they will net more money from those numbers.

Well you’re smarter than I am

 

[VSG]

I think you mean the I.R.S.

No, he meant the Inflation Reduction Act, IRA.

The IRA really hurt Rivian. Rivian would be the only one selling a pickup currently with $7500 credit which is a good selling point. It’s going to be a tough storm to weather for Rivian with lots of options.

The IRA has hurt all EVs. I've been saying this since it was passed in fall of 2022. The number of models that qualify for the full $7500 under the IRA is only a small fraction of what qualified previously. And that immediately made most EVs $7500 more expensive in a time of elevated interest rates and new models coming on the market.

It is going to take years to re-do supply chains to re-qualify for the full credit. With Rivian, the R2 will qualify by design, but that's two years away. With some other brands, they're going to have to move their manufacturing into the US and incur a lot of start up and other costs because of that.

While it's perhaps good for American manufacturing and trade in general, it is a real kick in the teeth for American car manufacturers like Rivian. And it may just open the door for BYD to make major inroads in the US because they will still be competitive on the low end even without the subsidy, just like they are now a major player in Europe.

A number of US manufacturers are now deciding it's just not worth it, and have put off their near-term plans for EVs. Glad Rivian is still working hard to adapt to the unexpected hit from the IRA, not that they have much choice, unlike the ICE manufactures who will just continue to crank out the ICE vehicles.

 

[SDH]

I hate to see anyone get laid off, but it’s hard to ever say just how much of a sign it is for the company overall. I feel like pretty much any company could lose 10% of salaried workers at any time and be completely fine.

Exactly. If they're anything like a number of Silicon Valley tech companies, then there's a load of fat to trim. I really don't need all the Rivian marketing stories (cut) and I bet HR is massively overstaffed with inefficient people just creating work for themselves (as it always is). Hopefully they leave servicing alone!

 

[R1Tom]

Exactly. If they're anything like a number of Silicon Valley tech companies, then there's a load of fat to trim. I really don't need all the Rivian marketing stories (cut) and I bet HR is massively overstaffed with inefficient people just creating work for themselves (as it always is). Hopefully they leave servicing alone!

It would be a monumental mistake not to continue to expand service and pull back. I think they have underestimated how much distant understaffed service centers have hurt their reputation and hence new sales already....

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