Rivian is reportedly laying off 10% of its workforce as the woes surrounding the electric vehicle community worsen. The firm just announced that it did not expect to make any more EVs this very year than it did in the previous year, thus causing stock prices to fall.
Rivian Is Laying Off 10% of Its Workforce
Rivian announced a workforce reduction of 10 percent amidst industry-wide concerns about the sluggish sales of electric vehicles.
The decision came alongside the company’s fourth-quarter earnings report, revealing that it doesn’t anticipate producing more vehicles in the current year compared to 2023. Rivian’s production figures for 2023 amounted to 57,232 vehicles, with 50,122 of them reaching customers. Consequently, Rivian’s stock price experienced a decline following this announcement.
Other Times Rivian Has Resorted To Layoffs
This isn’t the first time Rivian has resorted to layoffs. In both July 2022 and May 2023, the company implemented 6 percent workforce reductions. The latest round of layoffs is projected to impact over a thousand employees at the Irvine, California-based company, which currently employs a total of 16,700 salaried and hourly workers.
The Layoffs Has Been Confirmed
While a spokesperson confirmed that the layoffs would predominantly affect salaried employees, along with a limited number of hourly non-manufacturing workers, they refrained from providing specific figures.
“Our business is facing a challenging macroeconomic environment—including historically high-interest rates and geopolitical uncertainty—and we need to make purposeful changes now to ensure our promising future,” Rivian CEO RJ Scaringe in an email to employees that was provided to The Verge stated.
Rivian Has Projected a Production Target
Rivian has projected a production target of 57,000 vehicles for 2024, mirroring the output of the previous year. The company attributed this decision to various economic and geopolitical uncertainties, notably citing the impact of historically high-interest rates.
In the upcoming month, Rivian plans to unveil its second-generation R2 vehicle, anticipated to be a smaller and more cost-effective compact SUV. Currently, Rivian’s vehicle lineup includes the R1T truck, the R1S SUV, and the EDV, an electric delivery van.
Rivian’s Efforts to Streamline Costs
During an earnings call with investors, CEO Scaringe emphasized the company’s efforts to streamline costs, particularly through the reduction of electronic control units (ECUs) in each vehicle. Additionally, he highlighted the forthcoming release of the R2, although production for this vehicle is not slated to commence until late 2026.
“We’re in a very interesting moment in time where there is a lack of choice of highly compelling EV products in that $45 to $55,000 price range,” he revealed.
The Starting Price for Rivian’s R1T and R1S Vehicles
The starting price for Rivian’s R1T and R1S vehicles is approximately $72,000, although many models are sold for higher prices. In contrast, the R2 is anticipated to be priced within a range that CEO Scaringe identified as being underserved. Despite electric vehicle (EV) sales accounting for 7 percent of total vehicle sales in 2023, the majority of car shoppers are still searching for the ideal vehicle.
“How do we get the 93 percent of the market that’s not buying an EV to get excited about the product?” Scaringe reportedly asked.
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