The electric vehicle market is getting increasingly cutthroat. With Tesla (NASDAQ:TSLA) leading the way with price cuts and the rest of the market struggling to land market share and keep up, it’s clear there will be trouble ahead for EV stocks and their investors. Rivian (NASDAQ:RIVN) just demonstrated as much with its latest move that sent shares up slightly in Wednesday’s trading.
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Based on an internal memo, Rivian plans to lay off 6% of its workforce. Interestingly, Rivian also plans to focus on ramping up vehicle production, which will hopefully get it to profitability. However, it’s worth noting that none of the cuts will hit the Illinois factory. Regardless of where the cuts hit, Rivian is eager to conserve some of its cash; as of the end of September, Rivian had $13.8 billion in cash on hand. That sounds great until you consider Rivian posted losses of $5 billion through much of 2022, and it fell short of its production goals for 2022 as well.
This isn’t the first time Rivian has turned to job cuts to save money, either. Rivian cut another 6% of its workforce back in July. Back then, the move was regarded as a “…cost-cutting effort to ensure Rivian can continue to grow its manufacturing operations without raising additional funds.” Those cuts also didn’t apply to the Illinois facility.
Even with Rivian’s current troubles, Wall Street is largely behind it. Current analyst consensus calls Rivian stock a Moderate Buy. Further, with an average price target of $35.28, Rivian stock has 79% upside potential.
