(Bloomberg) — Shares of Rivian Automotive Inc. fell. After the automaker reduced its annual production target, citing a worsening supply crisis at its only assembly plant in the United States.
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The company now expects production to decline by up to 18% this year, due to ongoing shortages of components used in manufacturing electric pickups, sport utility vehicles and commercial trucks. Production and deliveries in the third quarter fell short of analysts’ estimates.
Rivian stock was down 3.3% as of 9:37 a.m. in New York, paring an earlier decline of as much as 7.2%. Shares are down about 54% already this year.
The relaxed production target represents the latest setback for a company that was already facing multiple supply chain snags and a broader slowdown in consumer demand for electric vehicles. A shortage of components forced the manufacturer to halt production of the commercial truck it makes for Amazon.com Inc. In August.
A Rivian representative declined to comment beyond the company’s statement.
Rivian said it now expects to produce between 47,000 and 49,000 electric vehicles this year, down from a previous forecast of 57,000 that was roughly in line with last year’s production. The company still expects annual deliveries to increase by a low-single-digit percentage.
The production stumble could delay Rivian’s goal of positive overall profits by the fourth quarter, according to Bloomberg Intelligence. Gross margins are now expected to be negative 10% in the last three months of 2024, analysts Steve Mann and Peter Lau said in a research note on Friday.
CEO RJ Scaringe acknowledged last month that the company was dealing with a “couple” of difficult supplier issues and specifically pointed to electric vehicle motors that Rivian makes internally. The company said on Friday that the shortages it began experiencing in the third quarter have become more severe in recent weeks.
Rivian delivered 10,018 vehicles during the quarter, its lowest total in a year and a half. The company continues to expect between 50,500 and 52,000 deliveries this year.
(Updates with stock open, analyst comment from third paragraph.)
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