Rivian reported on Tuesday produced 17,541 vehicles at its plant in Normal, Illinois, and delivered 13,972 to customers in the fourth quarter, mixed results that left investors wary and sent shares lower in premarket trading.
Rivian shares sank 9.75% to $21.17 at 1:40 p.m. ET.
Rivian showed steady growth in production and deliveries in the first three quarters of the year. And while production numbers continued on that upward trajectory in the fourth quarter, deliveries fell 10.2% from the prior quarter. That drop could signal a decline in demand for the company’s premium EVs. Rivian produces four vehicles: its two consumer vehicles, the R1T truck and the R1S SUV, and two versions of its business van.
Slowing demand for high-priced electric vehicles has hurt automakers, forcing many to cut production or cut prices. Rivian managed to avoid a price cut. If deliveries continue to decline through 2024, the automaker may have to pursue this strategy in an effort to increase its numbers. That would be a problem for Rivian, which is not yet profitable.
The cost of building a Rivian vehicle continues to be an obstacle to the company’s path to profitability. Rivian’s R1T and R1S consumer vehicles sell for more than $80,000, on average. But the cost of construction far outweighs any revenue it generates. In the second quarter, for example, the company lost $32,495 on every vehicle it built.
Rivian said during its third-quarter earnings call that it narrowed its loss per unit by $2,000 compared to the second quarter by simplifying its product portfolio and reducing material and labor costs. Lowering the sticker price would just put more pressure on margins.
On an annual basis, Rivian produced 57,232 vehicles and delivered 50,122. That topped the automaker’s most recent full-year 2023 production guidance of 54,000 vehicles.
The company also said it will report fourth-quarter earnings after the market closes on Feb. 21.
