Workers assemble second-generation R1 vehicles at electric auto maker Rivian’s manufacturing facility in Normal, Illinois, U.S. June 21, 2024.
Joel Angel Juarez | Reuters
Shares of Rivian Automotive dropped by as much as 8.9% in intraday trading Friday after the electric vehicle startup delivered fewer vehicles in the third quarter than analysts had expected and lowered its annual production forecast for 2024.
The company said the lower production target — down from 57,000 units to between 47,000 and 49,000 — was because of a “production disruption due to a shortage of a shared component” for its R1 vehicles and commercial van.
“This supply shortage impact began in Q3 of this year, has become more acute in recent weeks and continues. As a result of the supply shortage, Rivian is revising its annual production guidance to be between 47,000 and 49,000 vehicles,” the company said in a statement.
Shares of the Rivian, assisted by an expectation-defying jobs report that boosted markets, recovered some earlier losses to close down by 3.2% to $10.44.
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A Rivian spokesman said the component causing the problem is part of its in-house motors, but he declined to disclose any further details.
Rivian CEO RJ Scaringe during a Morgan Stanley investor conference last month alluded to problems with a number of suppliers: “We’ve had a couple of supplier issues of recent that have been challenging and in particular, a few issues around our in-house motors with some of the components that have been painful and a reminder of just how a multi-tiered supply chain can be difficult.”
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Shares of Rivian, Tesla and GM in 2024.
Despite the shortage, the company reaffirmed its annual delivery outlook of low single-digit growth as compared with 2023, which it expects to be in a range of 50,500 to 52,000 vehicles.
Rivian disclosed the component shortage as part of reporting its vehicle production and delivery for the third quarter.
The company produced 13,157 vehicles at its manufacturing facility in Normal, Illinois, during the period ended Sept. 30 and delivered 10,018 vehicles in that time. Analyst estimates compiled by FactSet expected deliveries of 13,000 vehicles during the third quarter.
Shares of Rivian are down by 56% in 2024, as EV demand has been slower than expected and the company has burned through a significant amount of cash.