"Forever starts now."
That's a message on Rivian's (RIVN) website, where the electric-vehicle maker details its sustainability efforts.
However, some people may think that it's taking forever for EVs to catch on with consumers.
Make no mistake, people are still buying EVs. Virtually every major automaker introduced at least one new electric car in 2023, and Americans purchased roughly 1.2 million electric vehicles last year, according to Kelley Blue Book. That's more than most observers had predicted.
Stephanie Valdez Streaty, director of strategic planning for Cox Automotive, Kelley Blue Book's parent, said the firm still believes “more sales will follow," with EV sales in the U.S. in 2024 topping the nearly 1.2 million record set in 2023 and accounting for more than 10% of total sales.
However, several large automakers have cut back or scrubbed their plans to boost EV production, and many EV startups are struggling.
Rivian Q1 output shy of estimates
On Tuesday, Rivian said it had produced 13,980 vehicles at its manufacturing facility in Normal, Ill., during the first quarter. Eight analysts polled by Visible Alpha had expected roughly 14,250 units, according to Reuters.
Rivian shares reacted to the shortfall, falling 5% at last check to $10.51
The quarterly production figure rose about 50% year-over-year but was below the 17,541 vehicles Rivian produced in the preceding three months.
The company delivered 13,588 vehicles during the first quarter, a sequential decline of around 3%, which is smaller than the 10% to 15% decline it forecast in February.
However, unlike the production figures, Rivian's deliveries tally beat analysts' consensus expectation for 11,893 deliveries.
Related: Tesla shares tumble after 'unmitigated disaster' in first deliveries
Rivian said that production and delivery results during the first-quarter of 2024 were in line with the company's expectations.
For the full year of 2024, Rivian affirmed guidance for annual production of 57,000 total vehicles. The company plans a weeks-long production shutdown in the second quarter to upgrade its production line.
Earlier this month, Rivian unveiled a trio of new compact EVs, named the R2, R3, and R3X.
The company said it would produce the R2 at its current U.S. factory, instead of at the brand's under-construction multibillion-dollar plant near Atlanta, a move expected to save the company more than $2 billion.
Rivian, which includes Amazon (AMZN) as one of its backers (the e-commerce giant owns about 16% of the company), is scheduled to report first-quarter earnings on May 7 after the market closes.
Analyst warns of 'headwinds' at Rivian
Last week, Mizuho Financial Group analyst Vijay Rakesh halved his price target on Rivian to $12, saying that he still saw the company well-positioned in the strong SUV/pickup markets and making a push towards profitability. “But headwinds remain from slowing EV demand, challenging execution, and elevated cash burn,” he said.
Those headwinds have been felt across the EV sector.
Rakesh also cut his price targets for Tesla (TSLA) and Chinese EV maker Nio (NIO) and downgraded all three companies to neutral from buy.
Tesla, one of the biggest names in the EV business, reported deliveries on the same day as Rivian.
CEO Elon Musk's company saw its shares fall sharply Tuesday, extending their 2023 market-capitalization slump past $250 billion, after posting a much weaker-than-expected tally of first-quarter deliveries.
Meanwhile, Fisker (FSR) , another EV startup, recently slashed the prices of its vehicles and warned about events that "could have a material adverse effect on our business."
The Manhattan Beach, Calif., company said on March 18 that it was pausing production for six weeks, while the New York Stock Exchange said it planned to delist Fisker’s stock due to “abnormally low” price levels.
Consumers still prefer hybrids to EVs
Why aren't EVs selling as much as some people in the industry would like?
Nascar and auto-dealer mogul Rick Hendrick recently discussed his "customer-centric" point of view in regard to automakers and EV policy.
"The customer is going to dictate what you build. I’ve been in the automobile business for almost 50 years, and you can’t force customers to buy what they don’t want," Hendrick told Robb Report.
"We were too aggressive with the EV market," he said. "I think the EV market will be there one day, but we’re not ready for it."
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Many consumers are reluctant to leap from internal combustion engines to electric ones and have opted for hybrids instead.
Households with gasoline vehicles are more likely to migrate to hybrid cars (including both hybrid and plug-in-hybrid vehicles) than to full-battery electric vehicles, S&P Global reported in January.
“The automotive industry's transformation to fully electric may not be as rapid as EV advocates are hoping, as US consumers increasingly opt for more sustainable and energy-efficient vehicles,” Tom Libby, associate director for loyalty solutions and industry analysis for S&P Global Mobility, said in a statement.
“This consumer trend of taking a half-step by choosing a hybrid instead of moving directly to an EV may be a sign of tentativeness to fully embrace electricity as the means of propulsion," Libby said.
S&P Global noted that hybrids offer a compromise between the familiarity of gasoline-powered cars and the environmental benefits of EVs.
They also eliminate the range anxiety and charging concerns associated with EVs, as they can switch to gasoline power when the battery runs low.
And, of course, pricing parity between internal combustion engine and hybrid models plays a significant role in this trend toward hybrids.
S&P Global said data showed that EV owners paid a higher average monthly car payment than owners of gas-powered vehicles and hybrids.
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