Rivian Automotive RIVN shares are tumbling Thursday after the company reported mixed fourth-quarter results and issued 2024 vehicle production guidance well below analyst estimates.
Following the EV maker’s earnings, Rivian CEO RJ Scaringe appeared on CNBC's "Squawk Box" to discuss earnings results and the company's path toward profitability.
What Happened: Rivian reported a worse-than-expected loss of $1.36 per share in the fourth quarter of 2023. The company said it lost roughly $43,000 per vehicle during the quarter.
In an interview on “Squawk Box” Thursday morning, Scaringe outlined several cost-cutting measures Rivian is implementing in order to focus on profitability, including a nearly 10% reduction in the EV maker's salaried workforce.
"We still have confidence — and want to be very clear — that the fourth quarter of this year we will be positive gross margin," Scaringe said.
The Rivian CEO pointed to continued progress on material costs and an improvement in fixed costs resulting from the ramp-up in production of its R1 model throughout 2023. The company plans to further reduce costs by replacing some vehicle components with cost-effective alternatives and introducing more efficient plant operations.
Related News: These Analysts Cut Their Forecasts On Rivian Automotive After Q4 Loss
The new vehicle materials and plant operations will require a planned shutdown of Rivian's production facility for several weeks in the second quarter of 2024, Scaringe said.
The Rivian CEO pointed to the plant shutdown as one of the leading factors in Rivian's production guidance of 57,000 vehicles in 2024, which came in significantly lower than estimates of 81,000 vehicles.
Scaringe told CNBC that the planned shutdown will involve “pretty significant changes across the vehicle” in terms of both cost structure and component rate.
“That is going to be a huge enabler for us to get to positive margin," he said.
RIVN Price Action: According to Benzinga Pro, Rivian shares were down approximately 29% at $11.29 at the time of publication.
Image: Courtesy of Rivian.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Date | ticker | name | Actual EPS | EPS Surprise | Actual Rev | Rev Surprise |
|---|
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
