The prognosis for its deliveries for the last quarter of 2023 proved to be a little too optimistic for electric vehicle (EV) manufacturer Rivian. As the year drew to a close, the company delivered 13,972 EVs to customers – a figure 10% short of the estimated 14,430 it hoped to roll out.
As a result, the company saw its share value dive by almost 10% on Tuesday, January 2nd, the first trading day of the new year.
Analysts point out that, particularly in the United States, interest rates remained high in the final months of 2023 despite the Federal Reserve slowing down its aggressive rate hikes. This resulted in higher monthly payments on EVs, making the vehicles more expensive and taking them beyond the reach of average buyers.
Increased prices also led to pioneering EV firm Tesla to kick off a price war with its competitors. Incidentally, unlike Rivian, Tesla managed to meet its quarterly delivery target as well as its annual sales goal.
However, some don’t agree that higher interest rates are entirely to blame, particularly when it comes to Rivian’s missed sales targets. Vitaly Golomb, one of those who invested in the EV maker and an expert on electric and autonomous transport in his own right, pointed out that the more hectic pace of the holidays meant that, while production remained in full swing, deliveries were slowed down.
Likewise, Amazon.com, one of Rivian’s biggest customers and financial supporters, has a longstanding practice of not taking deliveries in the fourth quarter. This is because it opts to focus on holiday promotions common to the tail-end of the year. This, in turn, also explains Rivian’s missed delivery targets.
Now, for the Good News…
Despite this Q4 snafu, Rivian’s production for the fourth quarter was 7.5% higher than its output in Q3. This enabled the EV maker to produce 57,232 vehicles, well above the 54,000 projected for 2023.
Despite a surprise bond issuance last October which frightened market watchers, Rivian remains in a better place financially compared to firms like Fisker and Lucid.
Analysts also say that its flagship Rivian R1T pickup truck (currently priced at $73,000) has little to fear from the Tesla Cybertruck introduced late last year.