Rivian to cut 600 jobs as loss of EV tax credit hits demand: source
The EV maker has struggled to achieve consistent profitability
[IRVINE, California] Rivian Automotive will lay off employees as the electric-vehicle maker contends with weakening demand following the expiry of key US tax credits that had supported sales, a person familiar with the matter told Reuters on Thursday (Oct 23).
Media reports earlier in the day pegged the number at around 600 workers and said the company had carried out a smaller round of layoffs a month ago.
The expiration of a US$7,500 US federal tax credit for purchases of new EVs last month is expected to drive up prices and further weaken demand, posing a fresh challenge for automakers such as Rivian already grappling with mounting cost pressures.
Rivian has struggled to achieve consistent profitability due to costs related to ramping up of production, tariffs and intense competition from Tesla and traditional automakers.
High tariffs on imported auto parts have driven up manufacturing costs and squeezed margins for EV makers, forcing them to revamp supply chains, curb reliance on foreign components and boost US investment in line with the Trump administration policy.
Analysts expect Rivian’s quarterly revenue to surge 71.5 per cent and loss to narrow, when it reports third-quarter results after markets close on Nov 4.
The company lowered the midpoint of its annual deliveries forecast earlier this month, despite reporting a nearly 32 per cent jump in the third quarter, largely driven by a last-minute rush to grab the now-expired federal incentive.
Rivian is focusing on improving manufacturing efficiency and streamlining operations at its Normal, Illinois plant to align costs with the weaker near-term demand outlook, while preparing for its next-generation R2 models, which are expected to broaden its reach beyond the luxury segment.
The company expects the R2 model to open up a lower-price segment, competing with Tesla’s bestseller Model Y crossover, and counterbalance soft demand for its pricier R1 vehicles. REUTERS
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