RIVIAN Automotive revealed plans to cut 10 per cent of its salaried workforce and set production guidance well below Wall Street’s expectations as the maker of electric vehicles (EVs) grapples with stagnant demand and economic turbulence.

The company will build 57,000 vehicles this year, roughly in line with its 2023 output, according to a statement on Wednesday (Feb 21) that also detailed fourth-quarter results. The forecast fell far short of analysts’ average estimate of more than 80,000 units in 2024.

Rivian also said it expects an adjusted loss before interest, taxes, depreciation and amortisation of US$2.7 billion, guidance that was influenced by “economic and geopolitical uncertainties and pressures, most notably the impact of historically high interest rates”.

The shares had dropped 17 per cent to US$12.78 as at 4.24 pm after regular trading in New York. Rivian had already tumbled 34 per cent this year to Wednesday’s close.

The outlook underscores the challenge of scaling production and stemming losses in an environment of waning consumer demand for battery-powered vehicles. The automaker has aimed to challenge EV market leader Tesla following Rivian’s blockbuster stock listing in 2021, but it has since dealt with supply-chain woes and other challenges.

“We firmly believe in the full electrification of the automotive industry, but recognise in the short-term, the challenging macro-economic conditions,” chief executive officer RJ Scaringe said.

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The layoffs, part of an aggressive cost-cutting effort, follow job reductions last year and in 2022. Capital expenditures this year will rise to more than US$1.7 billion, Rivian said, up from a little over US$1 billion in 2023.

The Irvine, California-based company builds two consumer EVs and a battery-electric delivery van at a sole plant in Normal, Illinois. There’s a second factory in the works near Atlanta, where Rivian plans to build its first mass-market, lower-priced EV starting in 2026.

Rivian reported an adjusted loss last quarter of US$1.36 a share, compared with an average US$1.33 deficit in estimates compiled by Bloomberg. Revenue of US$1.32 billion narrowly topped expectations.

The company lost more than US$40,000 on every vehicle it delivered in the last three months of the year, more than the loss of a little over US$30,000 per vehicle in the third quarter. However, that compares more favourably with the US$124,000 it lost on every vehicle a year ago as its production lines were hit hard by supply chain issues. BLOOMBERG