Shares of Rivian (RIVN) declined in pre-market trading after the EV manufacturer revised its annual production guidance to be between 47,000 and 49,000 vehicles. This was lower than its earlier forecast of 57,000 vehicles.
Don't Miss our Black Friday Offers:
- Discover the latest stocks recommended by top Wall Street analysts, all in one place with Analyst Top Stocks
- Make smarter investments with weekly expert stock picks from the Smart Investor Newsletter
Why Has RIVN Lowered Its Production Outlook?
The primary reason behind the company’s lowered production outlook has been a disruption in production due to a shortage of shared components on the R1 and RCV platforms. This shortage began in the third quarter and has worsened in recent weeks.
However, Rivian reaffirmed its annual delivery outlook of growth in “low single digits” year-over-year, which it expects to be in a range of 50,500 to 52,000 vehicles.
Rivian’s Q3 Vehicle Deliveries Fall Short of Expectations
Additionally, the company reported vehicle deliveries for the third quarter. Rivian produced 13,157 vehicles at its manufacturing facility in Normal, Illinois, and delivered 10,018 vehicles during the third quarter, which was below Street delivery estimates of 12,078 vehicles.
Looking ahead, Rivian is expected to announce its third-quarter results on November 7.
Why Are RIVN’s Vehicle Deliveries Below Expectations?
Companies like Rivian in the electric vehicle industry have been grappling with slowing demand for vehicles in the U.S. as many Americans are opting for cheaper hybrid vehicles.
Furthermore, the company has been trying to lower its costs and temporarily closed its sole manufacturing facility in Normal, Illinois, for three weeks. This shutdown aimed to streamline Rivian’s manufacturing processes and reduce the costs associated with building its electric pickup trucks and SUVs.
Is RIVN a Buy or Sell?
Analysts remain cautiously optimistic about RIVN stock, with a Moderate Buy consensus rating based on 11 Buys, nine Holds, and two Sells. Over the past year, RIVN has tanked by more than 50%, and the average RIVN price target of $17.24 implies an upside potential of 59.9% from current levels.
