After Rivian ( RIVN ) lowered its production target for the year, the EV maker said it was due to inventory shortages. A new report sheds light on the situation.
Following third-quarter delivery and production numbers on Friday, Rivian decided on its production plans for the year.
Rivian now expects to build between 47,000 and 49,000 vehicles this year, which is 14% to 17% less than the 57,000 it had previously targeted. It is also down significantly from the 57,322 cars produced last year.
In a press release, the company said it was “facing production disruptions due to a shared component shortage on the R1 and RCV platforms.”
Rivian says the outage started in Q3 and “has gotten worse in recent weeks.” New Bloomberg the report gives us more details about what is really going on.
According to sources familiar with the matter, the disruption was caused by poor communication between Rivian and their supplier, Essex Furukawa, earlier this year.
Why Rivian is cutting back on its 2024 EV production goal
Essex Furukawa makes magnetic wire for many major OEMs, but poor communication left Rivian without enough copper windows to achieve its goal.
The shortage is affecting production of Rivian's R1T, R1S, and electric delivery vans (EDVs) built for Amazon.
Sources said Rivian had “miscalculated” its supply requirements with the supplier. Rivian has found other sources, but it will be very expensive on such short notice.
Apart from this, Rivian also confirmed plans to deliver between 50,500 and 52,000 EVs this year. With another 10,018 delivered in Q3, Rivian has now delivered 37,369 vehicles in the first nine months of 2024.
| Q1 2024 | Q2 2024 | Q3 2024 | 2024 YTD | 2024 guidance | |
| Delivery | 13,588 | 13,790 | 10,018 | 37,396 | 50,500 – 52,000 |
| Production | 13,980 | 9,612 | 13,157 | 36,749 | 47,000 – 49,000 |
Rivian reaffirmed its goal of achieving first-quarter net profit during Investor Day in July. In Q2, the company's losses widened to $1.46 billion, with a loss of $32,705 for every vehicle built.
We will learn more about Rivian's situation when it releases its third quarter financial results on November 7, 2024.
Rivian's stock is down more than 50% in 2024 and more than 90% from its all-time high in November 2021, shortly after going public.
Meanwhile, the company is taking steps to restart construction in Georgia, where it plans to increase production of the low-cost R2.
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