Rivian Automotive RIVN shares moved higher in early Wednesday after the EV truckmaker defied industry concerns for a pullback in demand with upgrade production rates and an improved profit forecast.
Amazon-backed AMZN Rivian, which makes electrified trucks and SUVs, said it would boost 2023 production by 2,000 units, to 54,000 units, even as it trimmed capital spending plans following a solid third quarter earnings report that included overall revenues of $1.34 billion and a narrower-than-expected loss.
Last month, Rivian said it delivered 15,564 units over the three months ending in September, a 23% increase from the prior period, and said it was on track to produce around 52,000 vehicles this year.
Rivian added late Tuesday that its 2023 capital spending will come in around $1.1 billion, while guiding investors to negative adjusted earnings in the region of $4 billion.
"There has been a lot of noise and a lot of dialogue recently around EV adoption, and I want to emphatically state just how deeply convicted we are that the entire automotive industry will be transitioning to electric over the next one to two decades," CEO RJ Scaringe told investors on a conference call late Tuesday.
"In the short-term, I want to acknowledge the macroeconomic and geopolitical pressures impacting consumers and businesses, most notably the increase in interest rates," he added. "In this context, we remain laser focused on the factors within our control, driving greater cost efficiency (and) continue to ramp production."
Rivian shares were marked 1.6% higher in early Wednesday trading to change hands at $17.73 each, a move that would extend the stock's six-month gain to around 27.8%.
Scaringe's comments on high interest rates and broader macro economic concerns echo those of Tesla CEO Elon Musk, who struck a downbeat tone following the carmaker's disappointing third quarter earnings last month.
Musk said "stormy' economic conditions, rising interest rates and uncertain demand have clouded the group's near-term outlook as he appeared to back away from the company's stated goal of growing overall deliveries by 50% each year.
Tesla's key supply chain partner, Panasonic Holdings, warned in late October that its battery production facilities are running well below capacity amid a glut in global supplies and a pullback in demand.
Panasonic Holdings posted a third quarter loss, and lowered its full-year profit outlook, citing muted sales of Tesla's high-end Model S and Model X cars even amid the multi-level price cuts put in place in order to stoke demand and maintain market share.
U.S. EV rivals Ford F and General Motors GM, meanwhile, fresh from agreeing new labor contracts with the United Autoworkers' Union that ended nearly 45 days of strikes at production and assembly sites around the country, pulled their full-year profit forecasts and pared down electrified car sale prospects as the industry continues to face waning customer interest.
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