rivian reported on tuesday produced 17,541 vehicles at its Normal, Illinois, factory and delivered 13,972 to customers in the fourth quarter, mixed results that left investors cautious and sent shares tumbling in premarket trading.
Rivian had shown steady growth in production and deliveries in the first three quarters of the year. And although production numbers continued that upward trajectory in the fourth quarter, deliveries decreased 10.2% compared to the previous quarter. That drop could indicate a decline in demand for the company's range of premium electric vehicles. Rivian produces four vehicles: its two consumer vehicles, the R1T truck and the R1S SUV, and two versions of its commercial van.
Slowing demand for high-priced electric vehicles has hit automakers, forcing many to reduce production or cut prices. Rivian has managed to avoid lowering prices. If deliveries continue to decline through 2024, the automaker may have to adopt that strategy in an effort to boost its numbers. That would spell trouble for Rivian, which is not yet profitable.
The cost of building a Rivian vehicle remains a barrier in 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 the revenue it generates. In the second quarter, for example, the company lost $32,495 for each vehicle it built.
Rivian said during its third-quarter earnings that it reduced that per-unit loss by $2,000 compared to the second quarter by simplifying its product portfolio and reducing materials and labor costs. Cutting the sticker price would only put more pressure on margins.
For the full year, Rivian produced 57,232 vehicles and delivered 50,122. This surpassed the automaker's most recent full-year 2023 production guidance of 54,000 vehicles.
The company also announced that it will report fourth-quarter earnings after the markets close on February 21.
