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Electric adventure-vehicle manufacturer Rivian (RIVN) released its third-quarter financial results, surpassing expectations and providing an optimistic outlook. The company also revised its production forecast for the year and reduced its full-year loss projection. Following the release of the results, Rivian’s stock saw a slight increase in after-hours trading.
In Q3, Rivian reported revenue of $1.34 billion, exceeding the estimated $1.31 billion, along with an adjusted EPS loss of $1.19, lower than the expected $1.32 loss. This revenue figure represents a remarkable 19.6% increase compared to the $1.12 billion reported in Q2 and a substantial 150% growth from the $536 million reported a year ago. On an adjusted EBITDA basis, Rivian reported a loss of $942 million, which was less than the expected $1.04 billion loss, and notably narrower than the $1.307 billion loss reported a year ago.
Regarding production, Rivian raised its full-year forecast from 52,000 to 54,000 units. This upward revision came after an earlier increase from 50,000 units earlier in the year.
In their Q3 shareholder letter, the company explained, “Due to the progress experienced on our production lines, the ramp of our in-house motor line, and the supply chain outlook, we are increasing our 2023 production guidance to 54,000 total units.”
Additionally, Rivian trimmed its full-year adjusted EBITDA loss projection from $4.2 billion to $4.0 billion, and its 2023 capital expenditure (capex) guidance was reduced to $1.1 billion. Notably, Rivian announced it is no longer obligated to exclusively sell its electric delivery vans (EDV) to Amazon, a shareholder in Rivian. The company still plans to manufacture 100,000 delivery vans for Amazon under a previous agreement.
In the previous month, Rivian reported impressive deliveries of 15,564 electric vehicles, surpassing the estimated 14,973, and production also exceeded expectations with 16,304 vehicles manufactured. Despite these positive results, Rivian’s shares have faced challenges, declining by 11% since then and experiencing a 45% decrease over the past year. This is in contrast to the S&P 500, which has risen by over 14% during the year. EV manufacturers and legacy automakers like GM and Ford have also encountered difficulties, with waning or evolving EV demand.
For instance, Ford (F) recently paused $12 billion worth of investments in its EV projects, citing the lack of “capacity” as the primary reason. According to Ford, US EV buyers were unwilling to pay premiums for EVs over gas or hybrid vehicles, leading to a significant compression of EV prices and profitability. Similarly, GM (GM) delayed its EV truck expansion in late October, citing “evolving EV demand” as the key factor influencing the slowdown in EV truck volumes.
Even Tesla (TSLA) has been affected by the evolving EV demand landscape, with the automaker delaying the construction of its upcoming Gigafactory in Mexico due to concerns about global economic conditions stemming from rising interest rates.
However, Rivian, with its lifestyle-oriented trucks, may be an exception in the EV industry. The company’s Q3 deliveries surged by 23% sequentially compared to Q2, even after raising prices due to selling out its initial lower-priced orders. Unlike Ford and GM, Rivian targets coastal and higher-income buyers who are less affected by price increases and higher interest rates compared to the broader population.
