(Bloomberg) — Shares of Rivian Automotive Inc. plummeted after the automaker cut its annual production target, citing a worsening supply crisis at its only U.S. assembly plant.
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The company now expects production to fall by as much as 18% this year, due to an ongoing shortage of a component used to produce electric pickups, SUVs and commercial vehicles. Both production and deliveries in the third quarter fell short of analyst expectations.
Rivian shares were down 3.3% as of 9:37 a.m. in New York, down from an earlier decline of as much as 7.2%. Shares were already down about 54% this year.
The dampened production target marks the latest setback for a company already grappling with multiple supply chain issues and a broader slowdown in consumer demand for electric vehicles. A shortage of parts forced the manufacturer to halt production of the commercial vehicle it made for Amazon.com Inc. in August. makes, to interrupt.
A Rivian representative declined to comment on the company’s statement.
Rivian said it now expects to produce 47,000 to 49,000 electric vehicles this year, up from a previous projection of 57,000, which was roughly in line with last year’s production. The company still expects annual deliveries to increase by a low single-digit percentage.
According to Bloomberg Intelligence, the production freeze could delay Rivian’s goal of achieving positive gross profit in the fourth quarter. Gross margins are now expected to be negative 10% in the last three months of 2024, analysts Steve Man and Peter Lau said in a research note on Friday.
Chief Executive Officer RJ Scaringe acknowledged last month that the company was facing “a few” challenging supplier issues and specifically referenced EV engines that Rivian makes in-house. The company said Friday that the shortage it faced in the third quarter has become more acute in recent weeks.
Rivian delivered 10,018 vehicles this quarter, the lowest number in a year and a half. The company still expects 50,500 to 52,000 deliveries this year.
(Updates with opening shares, analyst commentary from third paragraph.)
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