Rivian Automotive (NASDAQ:RIVN) faced challenges in the fourth quarter of 2023, missing market expectations for deliveries and experiencing a nearly 10% decline in its shares on Tuesday. Tough competition and elevated interest rates dampened demand for the electric vehicle (EV) maker’s products.
In the last three months of 2023, Rivian delivered 13,972 vehicles, a 10% decrease from the previous quarter and below the estimated 14,430, according to a poll of 13 analysts by Visible Alpha. The high-interest rates in the United States have led to increased monthly payments for electric vehicles, triggering a price war initiated by industry leader Tesla (NASDAQ:TSLA).
Amazon.com (NASDAQ:AMZN), Rivian’s major backer and a significant customer, does not take deliveries in the fourth quarter as it focuses on holiday season priorities. Analysts suggest that holiday schedules likely contributed to the slowdown in deliveries compared to production.
Rivian, however, demonstrated resilience in production, manufacturing 17,541 vehicles in the last quarter of 2023, marking a 7.5% increase from the prior quarter. The annual production totaled 57,232 units, surpassing its forecast of 54,000.
Despite concerns about Rivian’s financial health arising from an earlier-than-expected bond issuance in October, the company is perceived as relatively well-positioned among electric vehicle startups such as Lucid (NASDAQ:LCID) and Fisker (NYSE:FSR). Rivian has refrained from price reductions on its vehicles, focusing on sustaining demand.
In December, Rivian secured a deal for its electric vehicles with U.S. wireless carrier AT&T (NYSE:T), following the expiration of its exclusivity agreement with Amazon in November.
While Tesla exceeded market estimates and met its annual delivery goal, Rivian faces the challenge of heightened competition and the impact of interest rate fluctuations on EV affordability. Some analysts noted that the Rivian R1T pickup truck, starting at $73,000, is unlikely to face significant competition from Tesla’s Cybertruck, unveiled in late November.
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