The electric vehicle startup, Rivian Automotive (NASDAQ:RIVN), witnessed a substantial decline in its stock value on Wednesday following the release of its Q4 results, which included guidance for a substantial EBITDA loss in 2024. Despite a 99% increase in revenue year-over-year in Q4, the company reported a much larger EPS loss for the quarter than anticipated, leading to a decline in investor confidence.
During the same period, Rivian’s manufacturing facility in Normal, Illinois produced 17,541 vehicles and delivered 13,972 vehicles. On a full-year basis for 2023, the company produced 57,232 vehicles and delivered 50,122, exceeding its most recent full-year production guidance of 54,000 vehicles. Rivian noted that its Q4 production was its strongest quarter to date, with an annualized rate of over 70,000 units, despite taking a week of downtime.
Operating expenses in the quarter increased to $975 million from $795 million a year ago, while the company’s cash position at the end of the quarter was $9.37 billion, with a total liquidity of $10.5 billion including the capacity under Rivian’s asset-based revolving-credit facility.
Regarding the profitability outlook, Rivian stated, “We remain focused on driving efficiency throughout Rivian. Our cost discipline has resulted in meaningful improvements in operating efficiency during 2023.” The company highlighted improvements in gross profit per delivered vehicle, adjusted EBITDA, and capital expenditures during the same period. Rivian also announced the reduction of its salaried employees by approximately 10%, along with a limited number of non-manufacturing hourly employees.
Looking ahead, Rivian expects to produce 57,000 vehicles in 2024 with a projected full-year EBITDA loss of $2.7 billion and anticipated capital expenditures of $1.75 billion. As a result of the announced staff cuts and financial outlook, Rivian’s stock slumped 15.79% in the postmarket session after shedding 3.2% during the regular session, with short interest on Rivian standing at 15.2% of the total float.
As the electric vehicle sector experiences a down day overall, the news around Rivian’s financial performance and staff cuts has also impacted other companies in the industry, with Tesla, Fisker, and Blink Charging all experiencing stock declines.
In conclusion, Rivian’s recent financial update has resulted in a significant stock slump and the announcement of staff cuts, reflecting ongoing challenges faced by the electric vehicle company. The impact of these developments on the broader market underscores the interconnectedness of the electric vehicle sector, with implications for investors and industry stakeholders alike.
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