(Reuters) – Rivian said on Friday it cut its full-year production forecast and delivered fewer vehicles in the third quarter than analysts expected, as the startup struggles with parts shortages and slowing growth in demand for electric vehicles .
The company’s shares fell more than 6% in premarket trading. The stock is down more than 50% this year.
The company said the shortage of parts used in the R1 SUV and R1T pickups and vans began in the third quarter and has become more acute in recent weeks.
Rivian now expects full-year production to be between 47,000 and 49,000 vehicles, down from its previous forecast of 57,000 vehicles. The forecast reduction means that the company now expects to make fewer vehicles than last year.
Slowing growth in demand for electric vehicles, as Americans struggling with high interest rates switch to cheaper hybrids, is impacting the industry. American market leader Tesla also missed quarterly deliveries earlier this week.
Amazon.com-backed Rivian had also closed its only manufacturing facility, in Normal, Illinois, for three weeks in April to simplify the production process and reduce the cost of building its electric pickup trucks and SUVs.
Cutting costs is crucial for Rivian as it looks to weather the demand slowdown and increase production of its R1 models, while gearing up for production of its smaller R2 models in 2026.
The company said it delivered 10,018 vehicles in the quarter ended Sept. 30, compared with estimates of 12,078, according to 15 analysts surveyed by Visible Alpha.
Rivian reaffirmed its annual delivery forecast of 50,500 to 52,000 vehicles this year. Analysts expected 53,491, according to Visible Alpha.
Volkswagen said earlier this year it will invest up to $5 billion in Rivian as part of an equally controlled joint venture to share EV architecture and software.
The investment will help Rivian strengthen its cash reserves and turn cash flow positive. The company aims to achieve its first gross profit in the last three months of 2024.
(Reporting by Zaheer Kachwala in Bengaluru; Editing by Shinjini Ganguli)
