UPDATE 2-Rivian sticks to production forecast below Wall Street targets

(Adds CEO comments, company details, paragraphs 1-7 and 12)

By Akash Sriram and Abhirup Roy

May 7 (Reuters) – Electric-vehicle maker Rivian on Tuesday stuck to a 2024 production forecast that is well below Wall Street targets and reported a wider-than-expected quarterly loss.

Shares were down 4% in volatile after-hours trading. Rivian also reported first-quarter revenue better than Wall Street estimates and restarted manufacturing after a weeks-long halt.

Rivian has begun producing its flagship R1S SUV and R1T pickup truck after the three-week shutdown last month to upgrade its assembly line meant to reduce costs.

“We didn’t produce for the first month this quarter. We’ve moved from three shifts to two. That’s all balanced by the fact that the lines are running faster,” Rivian CEO RJ Scaringe told Reuters. “We are optimistic on the guidance we provided, but we’re not updating it.”

Rivian said it will make 57,000 vehicles this year, while analysts expected 62,277 vehicles from the company, according to nine analysts polled by Visible Alpha.

While a broader slowdown in EV demand has forced automakers to slash costs, Rivian has introduced lower-priced variants, bringing down its average selling price and helping sustain demand for its vehicles.

Average selling price fell to $88,607 in the first quarter from $94,123 in the fourth quarter of 2023.

The company also cut its annual capital expenditure forecast by $550 million to $1.2 billion, as it moved the start of production of its R2 midsize SUV to its plant in Normal, Illinois. Analysts were expecting capital spending of $1.59 billion.

In March, Rivian said it would start producing the more affordable R2 vehicles at its existing Illinois factory to speed up deliveries in the first half of 2026 instead of making them at a proposed plant in Georgia. That, it has said, would save the company more than $2 billion in expenses.

The Amazon.com-backed company has been cutting costs by renegotiating contracts with suppliers and building some parts in-house including its drive unit, dubbed Enduro, to reduce dependency on vendors.

Revenue for the January-to-March quarter stood at $1.2 billion, compared with analysts’ average estimate of $1.16 billion, according to LSEG data.

The company’s net loss widened to $1.45 billion in the reported quarter, from $1.35 billion a year earlier, partly due to costs to retool the factory. Its first-quarter adjusted EPS was a loss of $1.24, steeper than the $1.17 per share loss expected by Wall Street, according to LSEG data.

For the quarter ended March 31, Rivian said its cash and cash equivalents were $5.98 billion, compared with $7.86 billion in the fourth quarter of last year. (Reporting by Akash Sriram in Bengaluru and Abhirup Roy in San Francisco Editing by Shailesh Kuber and Matthew Lewis)

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