Rivian Shares Drop Over 6% Amid Production Forecast Cuts

Investing.com — Rivian (NASDAQ:RIVN) shares dropped more than 6% in premarket trading on Friday after the company cut its full-year production forecast due to a significant setback in production plans related to a shortage of a shared component for its R1 and RCV platforms.

Rivian now anticipates full-year production to be between 47,000 and 49,000 vehicles, down from a previous forecast of 57,000 vehicles.

In the third quarter of 2024, Rivian produced 13,157 vehicles and delivered 10,018, but recent supply chain issues have impacted overall output.

Despite these challenges, Rivian remains optimistic about deliveries, expecting low single-digit growth compared to 2023, with an estimated delivery of 50,500 to 52,000 vehicles.

The revised forecast indicates Rivian will produce fewer vehicles than last year, as slowing demand for electric vehicles (EVs) arises from high interest rates and inflation, prompting consumers to seek more affordable options.

In a recent sector review, Morgan Stanley downgraded its outlook on the U.S. auto industry from Attractive to In-Line. High inventory levels, affordability concerns, and rising competitive pressure from China were cited as key headwinds. Morgan Stanley also downgraded Rivian from Equal-weight to Underweight and lowered its stock target to $13.00 from $16.00 per share.