Strong competition and high interest rates weigh down Rivian demand despite production increase.
While both BYD and Tesla are riding high on the sales charts courtesy of booming fourth quarter delivery figures, Rivian however did not seem to have shared that same kind of happy end to 2023. Such is as the all-electric SUV and pickup manufacturer has recently reported that sales of its models have been slightly slower than expected during the last three months of last year, leading to its shares sliding by nearly 10% upon this announcement.
Delving deeper into the specifics, Rivian has reported that it has delivered only 13,972 vehicles in the last three months of 2023. This figure marks a 10% decrease in deliveries from the previous quarter, and is marginally below the estimated 14,430 units analyst predicted that the American automaker should have managed.
Tough competition from other EV offerings is among the primary causes attributed to this slowdown in sales over the last quarter. In the Rivian lineup currently are the all-electric R1T pickup and R1S full-sized SUV, with the former especially facing some competition against the newly-unveiled Tesla Cybertruck.
Contributing to Rivian’s sales woes too is the high interest rates in the United States, which have since raised monthly payments (and hence lowered demand) for EVs. It certainly also did not help matters that Amazon, the automaker’s biggest backer and a large customer, also did not take deliveries during the fourth quarter, as it focuses on the holiday season in this particular period.
Rather concerning too, this is not actually the first time for Rivian stocks to tank this year as well. An earlier-than-expected bond issuance in October had a similar effect, with investors fearing over the company’s financial health.
It is however not all doom and gloom though at Rivian, as the automaker actually overtook its annual production forecast of 54,000 for 2023. The automaker managed to churn out 57,232 vehicles over the last 12 months, with 17,541 units products in the final 3 months alone, which is incidentally up by 7.5% from the previous quarter.
Rivian has also since signed a deal for its EVs with U.S. wireless carrier AT&T, a first after its exclusivity pact with Amazon ended in November. So while this is perhaps not the ideal start to 2024, there may be some hope yet for the startup automaker to probably still be able to comfortably ride it out into 2025 (and beyond).
