Rivian Boosts Production Outlook: Rivian Automotive has boosted its production forecast for the year by 2,000 vehicles, reaching 54,000 units, driven by robust demand for its trucks and SUVs. This announcement lifted its shares by 4% in after-hours trading. In contrast, smaller rival Lucid has reduced its production forecast to around 8,0008,500 vehicles, down from its earlier projection of over 10,000.
Rivian’s optimistic outlook comes at a time when the auto industry faces challenges due to high inflation and price cuts by market leader Tesla to boost demand. Despite these challenges, Rivian remains confident in its strategy and plans for the future.
Rivian’s CEO, RJ Scaringe, expressed surprise at how some competitors have pulled back and expects a shortage of products in the market as a result. He emphasised that these shifts in buying behaviour are not influencing Rivian’s investment strategy. The company is focused on launching its cheaper R2 vehicles in 2026. After facing supply chain issues for several quarters, Rivian seems to be making progress. The company has reduced its capital expenses and loss forecasts for the year through cost-cutting measures, negotiations with suppliers, and updates to components and systems.
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Rivian also plans to temporarily halt production for a week this quarter for assembly line updates. The company aims to prepare for a more substantial shutdown next year. Despite some challenges, Rivian appears to be benefiting from a more favourable commodity pricing environment, order book realisation, and progress toward scaling its operations.
Both Rivian and Lucid offer electric vehicles with starting prices above $70,000, which positions them in the premium market segment. Rivian has chosen not to cut prices but rather to reduce costs by producing its Enduro powertrains in-house. The company has experienced strong sales of its higher-priced SUVs, driving up the average selling price of its vehicles.
Rivian has also decided to end its exclusivity deal with Amazon for its electric delivery vans, allowing the company to expand its customer base. However, it reaffirmed its commitment to fulfilling Amazon’s order of 100,000 vans by 2030. Rivian is exploring opportunities with other customers interested in its electric delivery van platform. In the third quarter, Rivian reported revenue of $1.34 billion and reduced losses compared to the previous year. The company’s cash balance as of end-September stood at $7.94 billion.
Our Reader’s Queries
What is the production forecast for Rivian?
Rivian has surpassed its own production forecast for 2023 by manufacturing 54,000 vehicles. However, Wall Street has set a higher target for the company, expecting full-year deliveries to increase by 155% to reach 51,000 units.
What is the production prediction for Rivian in 2023?
In 2023, the company manufactured 57,232 vehicles and successfully delivered 50,122, surpassing their production target of 54,000. The fourth quarter 2023 financial results will be released on February 21st after the market closes.
What is the outlook for Rivian in 2024?
Rivian stock has been named a “best idea” for 2024 by Baird analysts, who are impressed by the company’s impressive production performance and potential to achieve profitability later in the year. According to the analysts, Rivian is expected to become gross margin positive in the fourth quarter of 2024.
Will Rivian ramp up production?
Rivian has made significant strides in the third quarter by narrowing its losses, cutting costs, and increasing production. The company’s impressive results have exceeded Wall Street’s expectations, indicating a brighter future ahead. Rivian has even raised its annual production guidance from 52,000 to 54,000 vehicles, further solidifying its position as a leader in the industry.