Rivian forecasts dour deliveries as demand hits speed bump (updated)

Nikola

20/02/2025 21:27

(Rewrites paragraph 1 to focus on forecast, adds shares in
paragraph 4)
    By Akash Sriram
       Feb 20 (Reuters) - 
    Rivian  RIVN.O  forecast modest gross profit this year,
after reporting its first-ever positive earnings margin in the
fourth quarter, as factory upgrades and supplier renegotiations
improved efficiency at the EV maker.
  
        Shares of the Irvine, California-based EV maker were up
about 4% in extended trading.
  
        However, Rivian projected an unexpected drop in
deliveries for the year as an uncertain economy and shifting
consumer preferences temper demand for its more expensive
electric pickup trucks and SUVs.
  
        Its gross profit stood at $170 million in the fourth
quarter, compared with a loss of $606 million a year earlier.
  
        The company also expects higher costs from U.S.
President Donald Trump's plans to impose tariffs on Mexico and
Canada. 
    "We have a supply chain that does have a footprint in both
Mexico and Canada, and so large tariffs being applied will just
translate to higher costs for us," CEO RJ Scaringe told Reuters.
    "There is such a high level of uncertainty that will
ultimately impact consumer behavior and top-line revenue," he
added.
    Rivian forecast annual deliveries of between 46,000 and
51,000 vehicles, lower than Wall Street expectations of 55,520,
according to 15 analysts polled by Visible Alpha. Last year, it
delivered 51,579 units.
    The EV maker is also planning to halt production for more
than a month in the second half of 2025 to upgrade its assembly
lines, as it gears up to launch the Tesla Model Y-rivaling R2
vehicle and start its deliveries early next year. 
    EV makers are staring at a tough market, with Elon Musk-led
market leader Tesla reporting its first drop in annual sales in
2024.
    Electric big rig manufacturer Nikola  NKLA.O  recently filed
for Chapter 11 bankruptcy protection and said it would pursue a
sale of its assets after struggling with rapid cash burn and
funding challenges amid weak demand. 
    Rivian, too, continues to burn billions of dollars in cash
every year. However, the rate at which it expends cash is
expected to slow as profitability improves along with its sales
volumes.
    Revenue for the last three months of the year stood at $1.73
billion, compared with analysts' average estimate of $1.4
billion, according to LSEG data.

 (Reporting by Akash Sriram in Bengaluru; Editing by Anil
D'Silva)
 ((Akash.Sriram@thomsonreuters.com; On X as @HoodieOnVeshti;
+91-99017-77617;))