Rivian Production Forecast Drop, Shares Dive

24/7 Wall St. Insights

• Once again, Rivian Automotive Inc. (NASDAQ RIVN | RIVN Price Prediction) has disappointed investors and caused its stock to tumble.
• This time it cut its production forecast for this year.
• Also: Dividend legends to hold forever.

Rivian Automotive Inc. (NASDAQ RIVN) has done it again. It has disappointed investors and caused its stock to tumble. The most recent trouble was a fall in the number of vehicles it will produce this year. The excuse was a shortage of parts.

First, the number of vehicles it produced last quarter was tiny: 13,157, compared to 10,018 in the same period last year. This may be a sign that it is part of the downturn in electric vehicle (EV) demand. There is also little demand for its expensive SUVs and pickups. Moreover, some potential customers worry that service will not be available if they need it.

Second, Rivian cut its production forecast for the entire year of 2024. It dropped to a range of 47,000 to 49,000 from an earlier forecast of 57,000. Management said it was “a result of the supply shortage.” Management added, “The company is also reaffirming its annual delivery outlook of low single digit growth as compared to 2023, which it expects to be in a range of 50,500 to 52,000 vehicles.”

On November 7, Rivian will announce its third-quarter earnings. Few people expect them to be strong. Instead, they will show that Rivian continues to lose money. In the second quarter, it had revenue of $1.12 billion and a loss of $1.28 billion.

Rivian’s stock is down 55% this year.

In June, Rivian announced a joint venture with Volkswagen. VW invested $1 billion in the small EV company. However, the balance of what could be a $5 billion investment was not assured. VW has hit a terrible period of its own and may lose some of its German factories. This makes the Rivian deal less likely to happen.

For Rivian, the bad news keeps coming.

Three Glaring Problems Facing Rivian