Rivian Automotive (RIVN.O) faced setbacks in the fourth quarter of 2023, missing market estimates for vehicle deliveries as challenges within the electric vehicle (EV) market took a toll. The company’s shares plummeted by nearly 10% on Tuesday in response to the disappointing figures.
Rivian handed over 13,972 vehicles in the final quarter, marking a 10% decline from the previous quarter and falling short of the estimated 14,430, according to a poll of 13 analysts by Visible Alpha.
Impact of High-Interest Rates:
The surge in interest rates in the United States played a pivotal role, driving up monthly payments for electric vehicles and denting demand. This situation triggered a competitive pricing war initiated by Tesla (TSLA.O), the market leader.
Vitaly Golomb, a Rivian investor and expert in electric and autonomous mobility, suggested that holiday schedules likely contributed to a slowdown in deliveries compared to production figures during this period.
Production Figures and Annual Forecast:
Despite delivery challenges, Rivian ramped production, manufacturing 17,541 vehicles in the last quarter of 2023, reflecting a 7.5% increase from the previous quarter. This pushed the annual production to 57,232 units, surpassing the forecasted 54,000 units.
While Rivian’s stock experienced a plunge in October due to concerns over its financial health following an unexpected bond issuance, the company is perceived as in a relatively favorable position compared to other EV startups like Lucid (LCID.O) and Fisker (FSR.N).
Product Competition and Pricing:
Rivian has refrained from price reductions on its vehicles, instead banking on sustainable demand.
Notably, after its exclusivity pact with Amazon ended, the company recently inked a deal with U.S. wireless carrier AT&T (T.N) for its electric vehicles.
Analysts speculate that Rivian’s R1T pickup truck, starting at $73,000, may not face significant competition from Tesla’s Cybertruck, which was unveiled in late November.