Rivian Slashes 2024 EV Production Forecast Amid Parts Shortage and Lower Demand

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key Takeaways

  • Rivian has revised its full-year production forecast to 47,000–49,000 electric vehicles (EVs), down from 57,000.
  • The production disruption is due to the shortage of a shared component affecting R1 vehicles and delivery vans.
  • Rivian delivered 10,018 vehicles in Q3, down from 13,970 in the previous quarter.

Rivian has revised its 2024 EV production target following supply chain challenges and a decline in electric vehicle demand. 

The company now forecasts producing between 47,000 and 49,000 units, down from an earlier target of 57,000.

This comes as a critical parts shortage, affecting the R1 SUV, R1T pickups, and delivery vans, has worsened since the third quarter. However, Rivian has not disclosed the specific component or supplier involved.

The broader electric vehicle (EV) industry is contending with slowing demand as high interest rates drive consumers toward more affordable hybrid options.

According to data from automotive marketplace Edmunds, the average annual percentage rate (APR) for auto loans stood at 7.1% for new vehicles and 11.3% for used vehicles as of August 2024.

Additionally, the average monthly payments reached $737 for new cars and $548 for used ones.

This financial strain is causing many buyers to hold off on purchasing newer vehicles despite the recent US rate cut.

Rivian’s Q3 EV Deliveries Fall Short Amid Supply Chain Disruptions

These industry-wide challenges were reflected in Rivian’s recent performance. On October 4, the EV company reported a significant drop in electric vehicle deliveries for Q3 2024, handing over just 10,018 vehicles, down from 13,970 in the previous quarter.

The company’s Chief Financial Officer, Claire McDonough, had previously warned of this dip, citing a high volume of inventory sold off in Q2. 

Despite the downturn, Rivian expects to meet its full-year delivery target of 50,500–52,000 vehicles. Rivian has responded to these production challenges by focusing on cost-cutting measures, including a three-week shutdown of its manufacturing plant and a workforce reduction of over 10% earlier this year.

The EV firm has also revived plans to build a new facility in Georgia and revamped its existing models, such as the R1T pickup and R1S SUV, to lower production costs.

While 2024 is expected to be a flat year for Rivian in terms of growth, the company is positioning itself for long-term success with the planned 2026 launch of its lower-cost R2 SUV.

In the meantime, Rivian continues to focus on simplifying production and minimizing losses per vehicle.

The company also hinted that it will release its Q3 2024 financial results on November 7, 2024, followed by a webcast to discuss its performance and future plans.