With Rivian not meeting its year end target for 2023, its shares drop 10 percent
Reuters reports that Rivian Automotive, missed market estimates for fourth-quarter deliveries as tough competition and high interest rates hindered demand for its electric vehicles (EVs), sending the company’s shares down nearly 10 percent on Tuesday. So will 2024 be a better year for the EV maker?
Rivian had handed over 13,972 vehicles in the last three months of 2023, 10 percent less than the previous quarter, and below estimates of 14,430, per 13 analysts polled by Visible Alpha. This is not nearly enough to sustain through the decline of EV sales in the United States of America.
Moreover, high interest rates in the United States have also raised monthly payments for EVs, making them less affordable and prompting a price war by market leader Tesla. Strangely EV sales are not really slowing down much here in Malaysia, but then again, we never managed numbers like the United States could.
Amazon.com, Rivian’s biggest backer and a large customer, also did not take deliveries during the fourth quarter of 2023 as it was focused on the holiday season. “It’s likely that holiday schedules slowed down deliveries vs production.” said Vitaly Golomb, a Rivian investor and an electric and autonomous mobility expert.
Rivian also produced 17,541 vehicles in the last three months of 2023, up 7.5 percent from the prior quarter. That took the annual production to 57,232 units, beating its forecast of 54,000. Tesla also posted quarterly deliveries on Tuesday, with the company beating market estimates and meeting its annual goal.
On top of that, while an earlier-than-expected bond issuance in October had sent Rivian’s stock plunging on fears over its financial health, the company is widely seen as better placed among the EV startups such as Lucid and Fisker, Rivian has so far avoided cutting prices of its vehicles, betting instead on sustainable demand.
Last month, Rivian also signed a deal for its EVs with U.S. wireless carrier AT&T, the first after its exclusivity pact with Amazon ended in November. Some analysts also said the Rivian R1T pickup truck, which starts at USD73,000 (about RM338,574), is unlikely to face major competition from Tesla’s Cybertruck.
Well, the declining EV sales in the United States has been a long time coming and I am curious to see when this also happens here in Malaysia. After all, many in the West had laughed at Toyota for resisting electrification and pushing for hybridisation but they all admitted Toyota was right now, so I believe it is only a matter of time.
We got all this from Reuters and their full article is linked here. Thank you Reuters for the information and images.
