Rivian reported Tuesday It produced 17,541 vehicles at its Normal, Illinois, plant and delivered 13,972 vehicles to customers in the fourth quarter, mixed results that left investors wary and sent shares lower in premarket trading.
Rivian showed consistent growth in production and deliveries in the first three quarters of the year. While production numbers continued this upward trajectory in the fourth quarter, deliveries were down 10.2% from the previous quarter. This decline could indicate waning demand for the company’s premium electric vehicle lineup. Rivian produces four vehicles: two consumer vehicles, the R1T truck and R1S SUV, and two versions of its commercial truck.
Slowing demand for expensive electric vehicles has hurt automakers, forcing many to scale back production or cut prices. Rivian has managed to avoid a price cut. If deliveries continue to decline through 2024, the automaker may have to follow this strategy in an attempt to boost its numbers. This would cause a problem for Rivian, which is not yet profitable.
The cost of building a single Rivian vehicle continues to be an obstacle to the company’s path to profitability. Rivian’s R1T and R1S consumer vehicles sell for more than $80,000 on average. But the cost of construction far exceeds any revenue it brings in. In the second quarter, for example, the company lost $32,495 on every vehicle it manufactured.
Rivian said during its third-quarter earnings that it narrowed its unit loss by $2,000 compared to the second quarter by simplifying its product portfolio and reducing material and labor costs. Lowering the sticker price will only increase pressure on margins.
On a full-year basis, Rivian produced 57,232 vehicles and delivered 50,122 vehicles. This exceeded the automaker’s latest 2023 production guidance of 54,000 vehicles.
The company also announced that it will report fourth-quarter earnings after markets close on February 21.