Rivian raises production guidance for this year, ending exclusivity deal with Amazon for its trucks

Rivian raises production guidance for this year, ending exclusivity deal with Amazon for its trucks

Written by Claudia Assis

Rivian stock rose after a better-than-expected quarter for the EV company and increased guidance

Rivian Automotive Inc. registered Late Tuesday, it posted a lower quarterly loss and surprised Wall Street by raising production guidance for the year and ending its exclusive agreement with Amazon.com Inc. For its own delivery trucks.

On a follow-up call with analysts, Rivian (RIVN) executives also pushed back on concerns about slowing demand for electric vehicles. In recent weeks, automakers such as Ford Motor Co. (F) and General Motors Co. (GM) announced a temporary halt or slowdown in its investments in electric vehicles.

CEO RJ Scaring said Rivian is “deeply” convinced that the entire auto industry will shift to electric vehicles over the next decade or two. “We have built and designed our business around this transformation.”

However, in the short term, there are macroeconomic and geopolitical pressures affecting consumers and businesses, “most notably the increase in interest rates,” Scaring said.

Rivian also adjusted its exclusive deal with Amazon.com ( AMZN ) to provide last-mile electric delivery trucks, opening the door to deals with other companies.

The trucks, as well as software and services, can provide “value” to fleet customers, and Rivian is “in active discussions with a number of large potential fleet customers to launch pilot programs,” Scarring said.

Rivian lost $1.37 billion, or $1.44 per share, in the third quarter, compared to a loss of $1.72 billion, or $1.88 per share, in the same quarter last year. Adjusting for one-time items, Rivian lost $1.19 per share.

Revenue rose to $1.34 billion, from $536 million a year ago, mostly due to the delivery of 15,564 vehicles, Rivian said. The company said revenue from the sale of regulatory credits was minimal this quarter.

Rivian shares rose more than 2% immediately after the results, and extended gains as the call began.

Analysts surveyed by FactSet expected Rivian to narrow its adjusted quarterly loss per share to $1.34 and report sales of $1.32 billion. Rivian’s sales exceeded $1 billion last quarter.

“We remain focused on increasing production and implementing core technologies designed to reduce cost and improve customer offerings,” Rivian executives said in a letter to shareholders accompanying the results.

The company said it raised its production guidance for the year to 54,000 vehicles, from a previous forecast of 52,000 vehicles, based on “progress in our production ramp.”

“We have also seen strong progress in our cost reduction efforts,” she added. The company also lowered its capital expenditure forecast for this year to $1.1 billion.

Last month, the company surprised Wall Street by offering $1.5 billion worth of convertible debt, a move that was quickly condemned as a “slam to investors.”

Rivian is about to face more competition: Tesla Inc. announced… (TSLA) announced in October that it had set November 30 as the date on which it would begin selling the Cybertruck, an electric pickup truck with a funky appearance.

Tesla’s future truck may not be direct competition with Rivian’s pickup trucks and SUVs, which are marketed for the outdoors and rough terrain, but it may eat into the pool of those who want and can afford a Rivian EV.

Rivian’s cheapest cars start at around $73,000, though the automaker is developing a second-generation car that should be even cheaper.

Rivian shares have lost about 6% so far this year, in contrast to an advance of about 14% for the S&P 500 SPX in 2023.

-Claudia Assis

This content was created by MarketWatch, operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.


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07-23-11 1805ET

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