Tesla Rival Rivian Sees Executive Departures Amid Global Supply Chain Challenges, Gets Big Price Target Cut

Zinger Key Points
  • Rivian is facing execution risks amid a tough macroeconomic backdrop.
  • The company clarified to Benzinga that the departures are routine corporate actions and it recently hired a few executives as well.

Shares of Rivian Automotive Inc. RIVN were higher in premarket trading on Wednesday despite two negative headlines concerning the electric vehicle maker.

What Happened: Several of Rivian’s top executives have quit in recent months amid challenges faced by the company in the wake of the global supply chain challenges, said  The Wall Street Journal. Among the executives who have left the company were Randy Frank, vice president of body and interior engineering, and Steve Gawronski, vice president in charge of parts purchasing, the report said. These executives quit at the start of this year, it added.

See Also: Best Electric Vehicle Stocks

Peter Hunt, a senior director in the strategy team, reportedly left the company late last year after nearly a seven-year tenure.

As the EV maker transitioned from a pre-revenue company to a commercial venture in late 2021, it hired some key executives to handle complexities in manufacturing to facilitate a quick and smooth ramp-up.

A Rivian spokesperson clarified that the company had a few C-suite hirings as well, including Diane Lye, who joined as its first chief information officer in October, and Anisa Costa, who joined as its first chief sustainability officer in April. 

An internal email from Frank Klein, chief operations officer, dated Nov. 4 shared by the spokesperson showed that Gawronski's departure was a planned move.

Separately, Rivian shares received a sharp price target cut from Goldman Sachs, according to Fly. Analyst Mark Delaney maintained a Neutral rating and reduced the price target from $41 to $19, citing a weak macro backdrop and challenging fundamentals in 2023.

Why It’s Important: Rivian was once touted as a Tesla Inc. TSLA challenger, having rolled out its R1T electric pickup truck well ahead of established players. The company’s execution suffered in 2022 amid supply chain challenges. In April, the company halved its 2022 production forecast to 25,000 units.

The actuals for the year showed that the company fell short of the target by several hundred units.

Late last year, Rivian shelved a European joint venture it had announced with Mercedes-Benz Group AG MBGAF to manufacture EV vans.

Last Friday, the stock hit an all-time low of $15.84 but has staged a slight recovery since then.

Price Action: In premarket trading on Wednesday, Rivian stock was rising 0.97%, to $16,61, according to Benzinga Pro data.

Read Next: Key Tesla Rival Rivian Misses 2022 Production Target As Supply Chain Challenges Hurt

Note: Amends headline based on comments received from Rivian spokesperson

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