Rivian Gets Wrecked

By Douglas A. McIntyre Published Jan 3, 7:10AM EST

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Rivian Gets Wrecked — © 2022 Rivian R1T (in Glacier White), front 6.21.22 (CC BY-SA 4.0) by Kevauto

As electric vehicle (EV) industry leaders Tesla Inc. (NASDAQ: TSLA | TSLA Price Prediction) and China’s BYD were announcing record sales for the fourth quarter and full year 2023, shareholders hammered one of their much smaller rivals due to its disappointing unit sales.

What Happened to Rivian?

Rivian Automotive Inc. (NASDAQ: RIVN) stock dropped 10% on news that it delivered 13,972 vehicles in the year’s final quarter. That was down 10.3% from the same period a year ago and below Wall Street’s expectations of 14,000. It is hard to imagine how an EV company, part of one of America’s hottest industries, could post such a decline. By contrast, Tesla delivered 484,507 cars in the final quarter of 2023. Tesla’s deliveries for the year reached 1.81 million, up 38% from 2022.

Rivian’s management was silent on why deliveries were less than expected. Many industry observers believe that EV sales across the country have started to slow and that the number of companies in the sector has grown quickly, splintering market share. (Here are five reasons to avoid Rivian R1T no matter what.)

EV Sales Headwinds

Among the reasons for EV sales challenges is price. For example, the base price of a Rivian R1T pickup is $73,000, which is well above that of the best-selling gasoline-powered pickups, including the Ford F-150, Chevy Silverado and Ram. These carry manufacturer’s suggested retail prices that are often below $40,000.

Another challenge to the EV market is range. Most EVs have ranges between 300 miles and 350 million. Gasoline-powered cars can often go over 400 miles on a tank of gas. EV charging stations are in short supply compared to gas stations, particularly outside big cities. There are approximately 125,000 gas stations in the United States, which almost guarantees convenience. And EVs can take several hours to charge fully. A gasoline-powered vehicle’s tank can be filled in a few minutes.

Rivian is also running out of financial runway. The company lost $1.3 billion in the third quarter. It lost $1.7 billion in the same quarter of 2022.

Rivian is a niche player in an industry dominated by Tesla and growing crowded as every major car company in the world invests heavily in EV fleets.

About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.