Shares of electric vehicle manufacturer Rivian fell more than 15% in after-hours trading Wednesday after the company announced it would be laying off 10% of its salaried workforce in response to an increasingly difficult market.
Rivian cited “economic and geopolitical uncertainties and pressures” when announcing the 10% staff reduction, and founder and CEO RJ Scaringe said in a press release that while they “firmly believe in the full electrification of the automotive industry,” they recognize the short-term “challenging macro-economic conditions.”
Rivian also announced Wednesday its EV production would be below the forecast, with about 57,000 vehicles being produced in 2024—about the same as were produced last year and below the expected 81,700 vehicles, according to Reuters.
Rivian’s stock closed down around 3.2% at $15.39 on Wednesday afternoon, before tumbling some 17% at times in after-hours trading—as of 6:40 p.m. EST its share price was $13.04, down 15.3% from the close.
The layoffs announced Wednesday will be Rivian’s third round since July 2022, TechCrunch reported. That July it cut 6% of its workforce, and it cut another 6% last February. Rivian was founded in 2009, offers an electric truck and electric SUV and is expected to launch its third, more affordable model—the R2—in March.
Tesla CEO Eldon Musk said Rivian's current trajectory “looks like it is gearing up for bankruptcy in about six quarters.”
“Maybe that trajectory will change, but so far it hasn't,” he added.
“Their product design is not bad, but the actual hard part of making a car company work is achieving volume production with positive cash flow,” Musk said of the company.
In January, Rivian stock fell amid news of its lagging deliveries and concerns around flagging demand for electric vehicles—though Tesla stock was rising at the same time.
Rivian’s shares also dropped last October after news of an earlier-than-expected bond issuance sparked concern about its financial health, though Scaringe pushed back at the time, telling Reuters the issuance was to strengthen Rivian’s balance sheet ahead of more costly borrowing.
My take: Rivian and none of the EV newcomers have a long-term future. Only Tesla and the legacy carmakers will survive. Too bad Georgia and North Carolina didn't get the memo when awarding billion-dollar-plus incentive packages to Rivian and VinFast respectively.
VinFast, the Vietnamese EV manufacturer, reported a 4th-quarter net loss of $650.1 million
Let’s go! 🙌🏻🙌🏻🙌🏻