Sometimes, it just seems that being good isn't good enough.
You work hard and come up with something you think people will like, but the red ink keeps flowing.
Some electric vehicle makers may be wondering when the good times will hurry up and get here as the sector contends with sluggish sales, price cuts, and abandoned or reduced expansion plans.
Even Tesla (TSLA) , one of the biggest players in the EV market, recently announced a fresh round of U.S. price cuts.
In all fairness, plenty of people maintain that the shift to EVs is happening, naysayers notwithstanding.
Kelley Blue Book announced last month that a record 1.2 million U.S. vehicle buyers chose to go electric "as the slow shift to an electrified future continued unabated."
Rivian Automotive (RIVN) believes in the electrified future, telling investors in the company's fourth-quarter shareholders letter that "we hold the deep conviction that the entire automotive industry will electrify over the long-term."
The company, which makes plug-in pickups, SUVs, and delivery vans, reported quarterly results on Feb. 21, and while the numbers beat Wall Street's estimates, investors were rattled by some of the things they heard.
At last check, Rivian shares tumbled nearly 27% to $11.31.
CEO: Rivian hit by high interest rates
The Irvine, Calif., EV maker posted an adjusted loss of $1.32 a share on revenue of $1.32 billion. Analysts were forecasting a $1.35 per share loss on $1.28 billion in sales.
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A year earlier the company posted a loss $1.73 a share on $663 million in revenue.
Rivian, which is roughly 17% owned by Amazon (AMZN) , said it expected to build 57,000 vehicles this year, in line with last year’s output but short of analysts’ average estimate for more than 80,000 units.
"The changes we plan to make in our R1 manufacturing line during the midyear shutdown are designed to deliver greater plant efficiency with production rates expected to improve by approximately 30%," the company said.
Rivian also said it would cut 10% of salaried staff, citing economic uncertainty and marking its third round of job cuts in the past 18 months. And the company recently slashed the price of its R1T pickup trucks and R1S SUVs by $3,100.
The company’s R2 platform, which is expected to be cheaper and smaller, is set to be unveiled early next month.
Rivian's plan to shut down its sole factory in Normal, Ill., at midyear is designed to upgrade its manufacturing line with an expectation to improve production rates by about 30%.
“Our business is not immune to existing economic and geopolitical uncertainties,” Chief Executive RJ Scaringe said on a conference call, according to Bloomberg. “Most notably, the impact of historically high interest rates, which has negatively impacted demand.”
Analysts adjusted their price targets for Rivian shares following the earnings release.
For instance, Canaccord lowered the firm's price target on Rivian Automotive shares to $20 from $30 and affirmed a buy rating on the shares.
Analysts: Rivian hit 'near-term air pocket'
The investment firm said that despite building a highly rated and desirable EV, Rivian appears to have hit a near-term air pocket and caught the recent EV bug, leading Canaccord to lower its estimates.
Needham analyst Chris Pierce lowered the firm's price target on Rivian to $18 from $22 but kept a buy rating on the shares.
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Pierce maintained that Rivian would be a winner in transitioning from internal combustion engines, or ICE, vehicles to EVs, given consistent evidence that its vehicles resonate well with end users.
He said, however, that the R1 bridge to the 2026 launch of the addressable market-expanding R2 vehicle looks less sturdy on increased demand concerns.
Piper Sandler lowered the firm's price target to $15 from $21 while keeping a neutral rating on the shares.
The firm said its forecasts had set an unrealistically high bar, given the destructive impact of factory shutdowns in 2024.
Nonetheless, with revenue unlikely to grow materially compared with 2023, Piper Sandler says the bears may point to demand as a reason for slowing delivery growth.
The firm said it will be several quarters before Rivian emerges from its production stoppage with a leaner cost structure and a redesigned R1 platform.
John Murphy, an analyst with Bank of America, cut his price target by $15 to $25 but reiterated his buy rating.
His decision was "predicated on our view that the company is one of the most viable among the startup EV automakers with attractive product, solid long-term strategy, and adequate funding well into 2025."
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