Another EV Firm Falls on Hard Times As Demand Plummets

Red State ^ | 02/23/2024 | Ben Kew

[SeekAndFind]

Yet another electric vehicle (EV) company has fallen on hard times.

California-based Rivian Automotive Inc. has had a tough week after announcing plans to cut 10 percent of its workforce and lower production targets amid a significant decline in demand for such vehicles.

The news also sent its stock plummeting by 25 percent on Thursday, marking the worst day of trading in the company's history.

“Our business is not immune to existing economic and geopolitical uncertainties, most notably the impact of historically high interest rates, which has negatively impacted demand,” Rivian CEO RJ Scaringe said on an earnings call on Wednesday. 

The Los Angeles Times reported:

Rivian's trucks and sport utility vehicles certainly command attention — the sleek design and outdoorsy features got investors, analysts and the public excited about its potential. The company, which counts Amazon as an investor, blew the roof off during its initial public offering of stock in 2021, ending its first day of trading valued at nearly $88 billion.

But the average car buyer probably is not able to afford the price points of Rivian's current slate of vehicles — the company's R1T electric pickup truck starts at nearly $70,000, while its R1S SUV starts at almost $75,000. The company, which is not yet profitable, reported a net loss of $1.52 billion for the three-month period that ended Dec. 31, compared with $1.72 billion during the same period a year earlier. Much rides on the company's plan to produce its more affordable R2, which will debut in March, but won't start mass production until 2026.

The automaker's troubles did not escape scrutiny on social media:

A simple $100 million ad campaign could restore them to an $150 billion valuation.

Also, RJ needs to stop tweeting about politics.


https://t.co/LhaZfn2Rqr— Whole Mars Catalog (@WholeMarsBlog) February 22, 2024

With the possible exception of Elon Musk's Tesla, Rivian's struggles are being felt across nearly the entire EV market, with numerous auto manufacturers downgrading their expectations in response to a significant fall in demand. 

Earlier this week, The New York Times reported that the Biden administration was scrapping its EV production targets in an apparent "concession" to automakers and labor unions.

The Times noted:

Instead of essentially requiring automakers to rapidly ramp up sales of electric vehicles over the next few years, the administration would give car manufacturers more time, with a sharp increase in sales not required until after 2030, these people said. They asked to remain anonymous because the regulation has not been finalized. The administration plans to publish the final rule by early spring.

The change comes as President Biden faces intense crosswinds as he runs for re-election while trying to confront climate change. He is aiming to cut carbon dioxide emissions from gasoline-powered vehicles, which make up the largest single source of greenhouse gases emitted by the United States.

There are many possible explanations for the underperformance of EVs, although perhaps the biggest issue is that they are not living up to their promise of being cheaper to run than traditional gas-powered cars. Until the costs of running EVs can be driven down, there may still be a lot of pain to come. 

[Tennessee Nana]

Im playing my tiny wee violin as fast as I can...

[Republican Wildcat]

Is it an electric powered tiny wee violin?

[Republican Wildcat]

Until the costs of running EVs can be driven down, there may still be a lot of pain to come.

They are not and were not ready for prime time. R&D and the market should have set that. It is entirely possible it may one day it may have met that threshold. But do to using the powers of government to push a product out onto the market that was not ready for prime time, we may never know. They themselves delayed and possibly ruined any possible future commercial viability of these vehicles.

[suasponte137]

First off...I think these Rivian vehicles are ugly as hell.

Second...they are VERY expensive...and from what I understand...come with loads of problems...and crappy customer service.

Not a good recipe for a EV company going forward.

[Yardstick]

Yep, they’re hideous. They deserve to go broke just based on the ugly factor.

[Tennessee Nana]

No just your common or garden variety Stradivarius...

Gas guzzling type...

[Newtoidaho]

Whoa. You mean a glorified golf cart that costs $100k, can’t tow anything and has a 100 mile range isn’t selling very well? I’m freakin shocked!

[rdcbn1]

Building a practical, economical and reliable electric car is a very difficult thing to do in a world where an abused key start mechanism or faulty battery can cost a company hundreds of millions of dollars in product liability and recall costs

Elon Musk's Tesla has done amazing things but they had a lot of start up design and manufacturing issues

Trucks bring a whole new set of problems

I'm skeptical that a start up electric truck company is going to be able make it in a world where Ford can't

[Gene Eric]

The EV novelty is no match for the muscularity & reliability a sober America demands.

Great news

[Mr. Blond]

It’s a bad time to be selling luxury cars.

[redfreedom]

Yup, never seen one before. They are certainly odd looking, nothing at all appealing about their styling.

[Steven Tyler]

Heh, you can buy a Rivian tent in case you run out of electricity
https://rivian.com/gear-shop/p/r1s-three-person-tent?sku=ACERRTT002

[AAABEST]

Interest rates aren’t “historically high.” Not even close.

Maybe the CEO’s lack of situational awareness is part of the problem - in addition to EVs sucking.

[bray]

Sounds like Congress is going to have to increase subsidies and tax credits for these wonderful cars.

[Yardstick]

I see one maybe a couple of times per week. It’s rare enough that I take note of it. And my first thought is always “jeez those things are ugly.” IMO they could be pretty cool looking with a little restyling of the headlights.

[Rappini]

I think Ford dropped a big bundle investing in Rivian.

[Lovely-Day-For-A-Guinness]

The only Rivian I've seen on the road was being transported on a rollback tow truck.

Come to think of it, I guess it really wasn't on the road, was it?