Rivian (RIVN) faces critical test in Q4 2023 earnings as EV stocks lose luster

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Rivian (RIVN) is set to report its Q4 2023 earnings after the market close on Wednesday, February 21, 2024. EV makers, including Rivian, look to show they can gain control of costs as output ramps up.

Still expanding and lowering costs

Rivian has continued to outpace rival EV startups with its rugged R1S and R1T adventure vehicles.

The EV maker delivered over 50,000 vehicles last year, more than double the 24,337 handed over in 2022. It also hit its production goal with 57,232 vehicles built in 2023, topping the 54,000 guidance.

However, the pace slowed in Q4. Rivian’s CFO, Claire Mcdonough, explained the company expects “a more significant gap between production and deliveries in Q4.”

The gap is due to Amazon limiting new vehicle intake during the peak holiday season. According to registration data, Rivian was the fifth best-selling EV brand in the US last year, with a 4% share.

Rivian followed the industry trend, cutting prices on the base R1T and R1S earlier this month. The R1T now starts at $71,700. The EV maker has also introduced leasing, offering new options for shoppers.

Rivian-Q4-2023-earnings-preview
Rivian R1S (Source: Rivian)

Rivian Q4 2023 earnings preview

Price cuts have investors worried about growing losses. Rivian reported a net loss of $1.3 billion in the third quarter, with around a $30.5K loss per vehicle.

Although still a significant loss, that number is down from a loss of $139,277 per vehicle the year before.

Q3 ’22 Q4 ’22 Q1 ’23 Q2 ’23 Q3 ’23
Rivian loss per vehicle $139,277 $124,162 $67,329 $32,594 $30,500
Rivian loss per vehicle by quarter

Rivian delivered 13,972 vehicles in Q4, up significantly from the 8,054 handed over in the last three months of 2022. However, it wasn’t enough to beat Wall St estimates of over 14,000, sending Rivian’s stock into free fall.

Rivian shares are down nearly 25% since the beginning of 2024 as investors are starting to worry about the EV maker’s cash burn.

Rivian-Q4-2023-earnings-preview
Rivian (RIVN) stock chart over the past 12 months (Source: TradingView)

The EV maker ended the quarter with $9.1 billion in cash and equivalents. With its revolving line of credit, Rivian said it had $10.25 billion in liquidity. McDonough said the company expects R1 “to be contribution margin positive exiting this year for newly priced units.”

Barclays analyst Dan Levy downgraded Rivian last week, saying, “It appears that even great product and tech is not enough to avoid the EV winter.”

Levy explained that with demand in question and pressure on pricing, a “tougher path to gross margin profitability” is possible.

Rivian-first-look-R2
Rivian R2 teaser (Source: Rivian)

Rivian will unveil its more affordable R2 EV on March 7, which will be built at its new GA manufacturing plant, another capital-intensive project.

The EV maker teased the first look at the new R2. Rivian said deposits will start at $100. Rivian’s R2 is expected to go into production in 2026.

Check back after the market close on Thursday for a full breakdown of Rivian’s Q4 results and notes from the earnings call after.

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