(Bloomberg) -- Rivian Automotive Inc. shares tumbled after the automaker cut its annual production target, citing a worsening supply crunch at its lone US assembly plant.
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The company now expects production to drop as much as 18% this year, due to an ongoing shortage of a component used to make its electric pickups, sport utility vehicles and commercial vans. Third quarter output and deliveries both came up short of analysts estimates.
Rivian’s stock fell 3.3% as of 9:37 a.m. in New York, paring an earlier drop of as much as 7.2%. The shares had plunged about 54% already this year.
The tempered production goal marks the latest setback for a company that’s already been contending with multiple supply chain snags and a broader slowdown in consumer demand for EVs. A component shortage forced the manufacturer to pause production of the commercial van it makes for Amazon.com Inc. in August.
A Rivian representative declined to comment beyond the company’s statement.
Rivian said it now expects to make 47,000 to 49,000 EVs this year, down from an earlier projection of 57,000 that was roughly in line with last year’s output. The company still expects to increase annual deliveries by a low single-digit percentage.
The production stumble could delay Rivian’s goal of achieving positive gross profits by the fourth quarter, according to Bloomberg Intelligence. Gross margins are now expected to be negative 10% in the final three months of 2024, analysts Steve Man and Peter Lau said in a Friday research note.
Chief Executive Officer RJ Scaringe last month acknowledged the company was contending with “a couple” of challenging supplier issues and specifically referred to EV motors that Rivian makes internally. The company said Friday that a shortage it started facing in the third quarter has become more acute in recent weeks.
Rivian delivered 10,018 vehicles during the quarter, its lowest total in a year and a half. The company continues to expect 50,500 to 52,000 deliveries this year.
(Updates with opening shares, analyst comment from third paragraph.)
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