Rivian Q3 Earnings 2024 Fail to Impress as the EV Maker Struggles with Slowing Demand
US-based EV manufacturer Rivian has missed revenue projections. On November 7 2024, The company reported lower quarter three sales than investors expected. Rivian Q3 earnings report for 2024 showed the company generated $874 million compared to $1.3 billion the same period last year.
According to Yahoo Finance, this amount is about $992 million less the amount projected by analysts.
The Underlying Factors
Rivian’s revenue drop was attributed to disruptions in production and the challenging consumer environment. The company has been facing a range of challenges that included safety problems, supply chain challenges, and reducing demand for electric vehicles as consumers take caution due to uncertainty in charging and cost options.
During Rivian’s earnings call with analysts, the company’s CEO and founder, RJ Scaringe termed the Q3 as tough. He said the EV maker Rivian revenues dipped because the company spent a lot of time fixing hiccups in the supply chain. Scaringe told analysts that the issue was short term.
Bracing for Uncertainty
Even with the slowing demand for EVs in the US, manufacturers are bracing themselves for more uncertainty following Donald Trump’s election to the White House. Although he has softened his EV criticism following Tesla CEO’s support, Trump has previously considered removing the $7,500 tax credit for EV purchases.
Although income requirements disqualified some customers, people who hired Rivian vehicles had been leveraging the tax credit. With Trump’s presidency, there is a chance that more tariffs will be introduced on imported products. Scaringe said that Rivian is focusing on working with suppliers who will not be subject to huge tariffs to overcome this challenge.
“There’s a lot of policy elements here that are in play and we’re watching it very closely,” he said on the call.
Market Performance
Rivian’s sales drop has been reflecting on its year-on-year stock performance. The company went public in 2021. Its share price dropped by 42% in 2023. On November 7, 2024, the company’s stocks closed at $10.04.
Last month, Rivian’s share price dipped after the company failed to meet its quarter three expectations and reduced its production estimates due to miscommunication with copper windings supplier. The company manufactured 13,157 EVs in its Normal III manufacturing plant. However, it delivered 10,018 EVs in quarter three. Overally, Rivian’s third quarter net loss stood at $1.1 billion, compared to the $1.4 billion it reported the same period last year.
As the EV manufacturer maneuvers its way to profitability, it has signed high-profile deals with Volkswagen Group and Amazon. The EV maker is working on a joint venture with Volkswagen in quarter four. The agreement will see the German automaker invest $5 billion in the EV maker this year. On November 7, 2024, Rivian said it had entered into a partnership with LG Energy Solution to supply cylindrical battery cells.
