On the Dash:
- Rivian is cutting 4% of its workforce to manage costs amid declining EV incentives and revenue pressures.
- The company lowered its full-year delivery guidance, even after Q3 vehicle sales increased by 32%.
- The upcoming R2 SUV, priced around $45,000, is central to Rivian’s plan to boost demand and broaden its customer base.
According to an exclusive Wall Street Journal report, Rivian is cutting roughly 4% of its workforce, affecting more than 600 employees, as the EV maker seeks to conserve cash amid slowing EV demand. The layoffs follow a smaller reduction last month that affected 1.5% of its workforce. At the end of 2024, Rivian employed just under 15,000 people.
The EV maker is implementing cuts as it confronts declining demand due to the expiration of federal tax credits and changes in compliance credit rules. These factors are expected to impact sales and delay approximately $100 million in revenue. Despite these challenges, Rivian’s vehicle deliveries grew 32% in the third quarter, reaching 13,201 units.
However, the company narrowed its full-year delivery guidance to 41,500-43,500 vehicles, down from a previous forecast of up to 46,000. Notably, the automakers’ quarterly earnings are set for Nov. 4.
In 2021, Rivina went public and has faced ongoing pressure to manage costs while expanding its product lineup. The company plans to launch its next model, the R2 SUV, with a starting price of around $45,000, which is slightly lower than the current R1T pickup and R1S SUV, which start at $70,990 and $76,900, respectively. Notably, the EV maker expects demand for the R2 to surpass that of its existing models.
Moreover, the company recorded a $1.1 billion loss in the second quarter but says it has sufficient cash to support the R2 launch and broader operations. The layoffs are part of a strategic effort to reduce costs and position Rivian for success as the EV market adjusts to waning incentives and changing consumer behavior.
