SEEING RED
‘Competition is dying’ Tesla fans say after EV rival Rivian’s bombshell announcement about layoffs and scaling back
Rivian said it plans on selling new cars soon
RIVIAN has sent drivers and fans into a spiral after announcing a spate of layoffs.
The electric truck and SUV manufacturer, seen as one of Tesla's biggest rivals, said it would lay off around 10% of its salaried workforce.
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Rivian also said it would produce around the same number of vehicles as in 2023.
Previous production estimates said the company wanted to build around 80,000 vehicles this year.
Instead, Rivian said it expects to build just over 50,000.
The company also said it would temporarily shut down its factories in the year's second quarter to optimize its production lines.
The truck producer said it aims to drive stronger efficiency and profitability as the electric vehicle switch hits speed bumps.
Rivian, which is about to launch a smaller R2 series nearly $20,000 cheaper than its current lineup, said interest rate hikes and a downturn in EV interest have impacted sales.
The R1T and R1S series trucks both start around $70,000.
The new series of trucks will sell in the upper $40,000 base price.
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Rivian is looking to capitalize on its standing as a highly-rated car manufacturer from early adopters.
"In the R1, customer satisfaction is extremely high," Rj Scaringe, the brand's CEO, said during the company's earnings call.
I inspected the second-fastest truck - a hidden button reveals eight 'modes' for all kinds of driving
"That will translate into R2."
He pointed out that electric vehicle manufacturers are fighting over only 7% of the overall vehicle market in the US, as American drivers purchase EVs at a slower rate than peer countries.
"We are competing against Tesla and others in 2024," Scaringe said, talking about the limited number of EV buyers.
But drivers are nervous that the announcement will cause financial issues for the company.
"Honestly, this should be good news for Tesla," one Tesla fan said on Elon Musk's X (formerly known as Twitter).
"Competition is dying."
Other drivers are pumping the brakes on the doomsday view of the manufacturer.
"I think R2 model for $48,000 is [a] good price," another driver said.
"Trust me, it will be hard, but Rivian can make it. They are doing something different than others EV makers."
EV MARKET CHANGES
Dozens of external factors have dampened sales predictions for electric vehicle manufacturers across the board.
Interest rate spikes have made purchasing cars more cost-prohibitive for customers.
Also, the Biden administration is debating plans to relax rules that were meant to drive the shift toward EVs, according to CNN.
The change to federal emissions standards could extend combustion vehicle sales past previously stated goals.
But Rivian doesn't need to focus on private consumers as its only profit driver.
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The electric truck manufacturer built a last-mile electric delivery van for Amazon.
The e-commerce giant released Rivian from its exclusive contracts, allowing Rivian to sell more delivery trucks to other companies.