RIVN Stock Alert: Rivian Fuels Demand Concerns Amid Weak Production Guidance

Rivian (NASDAQ:RIVN) The stock falls after the pure-play electric vehicle (EV) company reported first-quarter earnings. During the quarter, revenue was $1.204 billion, up 82% year-over-year (YOY) and beating analysts’ estimate of $1.17 billion. Meanwhile, earnings per share, a measure of profitability, came in at a loss of $1.48, compared with analysts’ estimate of $1.15.

“We achieved several milestones this quarter, including producing our 100,000th normal vehicle, successfully completing the conversion upgrade and introducing our new mid-size platform that underpins the R2, R3 and R3X,” said CEO RJ Scaringe .

Rivian produced 13,980 vehicles in the first quarter and delivered 13,588 of them. While shareholders were hoping for an increase over the previously given production forecast of 57,000 vehicles, Rivian instead reiterated the number. That’s a concern because it represents no growth over the company’s 2023 production of 57,232 vehicles. The forecast also assumes production of 14,340 vehicles per quarter for the remainder of the year.

RIVN Stock: Rivian Reaffirms Production of 57,000 Vehicles for 2024

Rivian recorded several successes during the quarter, such as saving $2.25 billion by moving R2 production to Normal, Illinois and optimizing its R1 production line. Production of R2 is scheduled to begin in the first half of 2026 and was originally scheduled to begin at a $5 billion plant in Georgia. Construction of the plant was stopped.

Meanwhile, profitability is still a long way off. Gross profit per vehicle was a loss of $38,784, meaning Rivian lost that much for each vehicle shipped. It’s worth noting that the figure includes $15,455 in depreciation and $1,693 in stock-based compensation (SBC). Analysts don’t expect the company to report its first year of GAAP EPS profitability until 2029. Then a value of 1 cent is predicted.

Rivian’s production forecast comes at a time when many consumers prefer hybrid vehicles over electric vehicles. This is due to the higher price of electric vehicles. Accordingly Cars.comThe average price for hybrid and plug-in hybrid vehicles is $48,918, while the average price for a battery-only electric vehicle is $63,802. Rivian’s 2024 R1T is currently the cheapest vehicle with a starting price of $71,700. The R2 is expected to start at around $45,000.

At the time of publication, Eddie Pan did not hold, directly or indirectly, any positions in the securities mentioned in this article. The opinions expressed in this article are those of the author, subject to those of InvestorPlace.com Publishing Guidelines.