Rivian stock hits new low since IPO as electric vehicle demand slows

Rivian stock plunges 27% after disappointing investors. Company announces layoffs and $2.7 billion loss for 2024. EV market struggles.

Rivian stock took a nosedive of more than 27% to $11.18 per share on Thursday morning, disappointing investors with its fourth-quarter earnings report. This marks a significant decline of more than 46% since the beginning of the year. The electric truck maker, based in Irvine, Calif., has announced its intention to reduce its salaried workforce by 10%, marking its third round of layoffs since July 2022. Additionally, the company anticipates a loss of approximately $2.7 billion this year, despite implementing a "company-wide cost transformation program." In 2023, it recorded $5.7 billion in losses from operations, a decrease from the $6.8 billion in operational losses in 2022.

Furthermore, Rivian plans to produce only 57,000 electric trucks in 2024, maintaining the same output as the previous year but falling short of Wall Street's expectations. The company, aiming to achieve profitability by the end of 2024, incurred a loss of about $43,370 on every vehicle delivered in the last quarter of 2023.

CEO RJ Scaringe addressed investors, acknowledging that the company is not immune to prevailing economic and geopolitical uncertainties, particularly the adverse effects of historically high interest rates on demand.

In a similar vein, other carmakers such as General Motors and Ford have also scaled back their electric vehicle (EV) investment plans in response to sluggish sales and waning customer interest. Tesla, a prominent player in the EV market, recently reduced the price of its popular Model Y by $1,000 in an effort to attract consumers put off by high prices.

Meanwhile, Lucid, based in Newark, Calif., experienced a 20% drop in its stock after informing investors that it anticipates producing 9,000 vehicles this year. Although this would represent an increase from the 8,500 vehicles manufactured in 2023, it falls short of analysts' projections of 14,000.