Electric vehicle manufacturer Rivian has reaffirmed its production forecast for 2024, which is lower than analysts had expected. The company is working on restarting production after a recent shutdown to upgrade its assembly line and reduce costs. Despite reporting a wider first-quarter loss, Rivian’s shares were down about 2% in after-hours trading. The company has also reduced its annual capital expenditure forecast by $550 million to $1.2 billion and has shifted the production start of its R2 midsize SUV to its Illinois plant instead of a proposed plant in Georgia. This move is expected to save Rivian over $2 billion in expenses.
Rivian plans to produce 57,000 units this year, while analysts had projected the company to produce 62,277 vehicles by 2024. In an effort to boost demand, Rivian introduced a lower-cost variant of the R1T pickup truck and R1S SUV. The company has been taking steps to reduce costs by renegotiating contracts with suppliers and bringing some parts in-house, such as its drive unit called Enduro, to reduce dependency on vendors. This transition to new suppliers is expected to help expedite production of the newly unveiled smaller, more affordable midsize R2 SUVs.
Despite recording revenue of $1.2 billion for the January-to-March quarter, which exceeded analysts’ estimates of $1.16 billion, Rivian reported a widened net loss of $1.45 billion, compared to $1.35 billion a year earlier. As of March 31, the company had cash and cash equivalents totaling $5.98 billion, down from $7.86 billion in the previous quarter. With regards to capital spending, Rivian has reduced its forecast to $1.2 billion, while analysts had anticipated capital expenditure of $1.59 billion. The company is focusing on streamlining its operations and reducing costs to improve its financial performance.
In March, the company announced plans to produce the more affordable R2 vehicles at its existing Illinois factory to accelerate deliveries in the first half of 2026. This decision was made in an effort to save costs and optimize production processes. Rivian has been working on cost-cutting initiatives such as building some parts in-house and negotiating contracts with suppliers to lower expenses. The company’s strategy to transition to new suppliers will enable it to quickly scale up production of its newly unveiled midsize R2 SUVs, which are aimed at capturing a larger market segment and boosting sales.
The Amazon-backed company has been working on enhancing its product lineup to appeal to a broader customer base. By introducing lower-cost variants of its popular R1T pickup truck and R1S SUV, Rivian aims to attract customers who may be deterred by high interest rates and the appeal of less-expensive gasoline-hybrid vehicles. The company’s efforts to reduce costs and improve production efficiency are crucial to its ability to meet customer demand and achieve its long-term growth targets. Despite facing challenges such as a wider first-quarter loss, Rivian remains focused on optimizing its operations and expanding its product offerings to drive future success in the competitive electric vehicle market.
