Rivian Maintains Q4 Profitability Forecast Despite Revenue Drop

By Akash Sriram and Abhirup Roy

(Reuters) – Rivian has reaffirmed its forecast to achieve gross profit in the fourth quarter, despite experiencing its first drop in quarterly revenue due to a component shortage.

Shares of Rivian (NASDAQ:RIVN) rose nearly 2% as the company aims to "generate modest positive gross margin" this quarter, mainly due to cost reductions and increased revenue per unit sold.

Investor Vitaly Golomb noted that the reaffirmed forecast for Q4 profitability indicates effective cost management and operational streamlining.

In contrast, EV competitor Lucid (NASDAQ:LCID) exceeded quarterly revenue expectations, driven by strong demand for its luxury electric sedans, as it prepares to launch its Gravity SUV.

Due to a shortage of a component used in the drive unit, Rivian cut its full-year production forecast to between 47,000 and 49,000 vehicles, down from an earlier estimate of 57,000 units, suggesting a decline in annual production compared to last year. However, Rivian anticipates deliveries to increase to between 50,500 and 52,000 vehicles in 2024, compared to 50,122 last year.

CEO RJ Scaringe expressed that the inability to build the planned product mix affected both demand and revenue.

Revenue for the third quarter dropped 34.6% to $874 million, falling short of analysts' average forecast of $989.6 million, according to data from LSEG.

As Rivian and Saudi PIF-backed Lucid continue to increase production to compete with market leader Tesla (NASDAQ:TSLA), they face substantial cash burn due to rising costs. Rivian is not expected to report its first adjusted core profit until the third quarter of 2026 and may need to raise funds within the next two years to maintain cash balances.

The company reported a net loss of $1.1 billion for the July-September quarter, an improvement from a $1.37 billion loss a year prior.

As of September 30, Rivian's cash and cash equivalents stood at $5.4 billion, down from $7.86 billion in the previous year’s fourth quarter.

Additionally, Rivian has secured a multi-year battery supply deal with LG Energy Solution's Arizona subsidiary for its R2 midsized SUV, helping the EV manufacturer adhere to domestic manufacturing requirements under the Biden Administration's Inflation Reduction Act, which offers incentives for EV buyers.

Scaringe mentioned that they are closely analyzing various outcomes regarding potential policy changes with the shift in administration as Donald Trump secures reelection.