Electric vehicle (EV) startups Rivian and Lucid have revised their production forecasts for 2024, attributing challenges in the market landscape and persistent borrowing costs as barriers hindering consumer adoption of battery-powered cars.
Rivian, which boasts backing from Amazon, has disclosed a reduction in its workforce by 10 percent and has outlined plans for a production halt aimed at enhancing efficiency and reducing costs.
Consequently, Rivian now expects to manufacture 57,000 vehicles in 2024, significantly below the projections of 81,700 units set by analysts. CEO RJ Scaringe underscored macro-level challenges such as elevated interest rates and geopolitical risks impacting consumer behavior. Despite recent endeavors to introduce lower-range options at reduced prices, Rivian grapples with diminishing order volumes and foresees deliveries for the current quarter falling below those of the preceding quarter.
Rivian’s strategic approach involves mitigating cash outflow by renegotiating supply agreements and bolstering internal component production. The company anticipates an improvement in margins by year-end, placing significant emphasis on the unveiling of its upcoming R2 SUV as pivotal to sustaining momentum. Investor Vitaly Golomb highlighted the importance of Rivian’s more compact and cost-effective SUV in broadening its market appeal.
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