Rivian and Lucid Post Big Losses, Plan Cuts

Electric vehicle makers Rivian and Lucid post post big losses in 2023. Rivian is forecasting staff cuts, while Lucid is cutting production.

Joe Szczesny

February 22, 2024

3 Min Read
BEV pickup market cooling as Rivian reveals second SUV in March.

Facing steep losses and an inhospitable market for battery-electric vehicles overall, start-up BEV manufacturers Rivian and Lucid are trimming sails this year.

Rivian , says it plans to reduce its salaried workforce by 10% to conserve cash, while Lucid is dramatically cutting production.

Rivian’s losses in 2023 totaled $5.4 billion in 2023, but the loss was smaller than the $6.8 billion lost during 2022.

The layoffs at Rivian, which has more than 16,700 employees in Los Angeles, suburban Detroit and Normal, IL, follow earlier cuts in staffing of 6% in mid 2022 and February 2023.

Rivian CEO R.J. Scaringe notes during a conference call with analysts, “Our business is not immune to existing economic and geopolitical uncertainties. Most notably the impact of historically high interest rates, which has negatively impacted demand.”

The BEV startup also plans to reduce capital spending in 2024 by $250 million even as it pushes ahead with the introduction of a new midsized SUV built on its new R2 platform, which will be unveiled March 7.

The R2 is aimed at the heart of market where the average vehicle is priced today at $48,000, Scaringe says.

Like other BEV makers such as Tesla and Ford, Rivian has been scaling back prices of the R1S SUV and R1T by offering a less expensive battery pack with a smaller range, which is helping boost demand, Scaringe adds.

Rivian’s revenue increased 163% in 2023, topping $4.43 billion, including $1.3 billion in the fourth quarter. Rivian produced 57,232 vehicles in 2023, including 17,541 in the fourth quarter.

However, the company’s guidance now indicates it will build roughly the same number of vehicles in 2024 because of a shutdown in the second quarter and uncertain demand for BEVs.

Despite losses totaling $1.5 billion during the fourth quarter of 2023, Scaringe and other Rivian executives insist the company has reached some significant milestones such as making the R1 the best-selling BEV retailing for more $70,000.

Offering guidance for 2024, the company also expects to make a small profit per vehicle by the end of this year following the second-quarter changeover at its factory to start production of the R2.

Rivian has sufficient resources to operate through 2025, Scaringe says. The company is still sitting on $9.4 billion in liquid assets from its record initial public offering in 2021.

Additionally, some  losses were offset by the sale of $73 million of regulatory compliance credits to other automakers.

Rivian, despite cuts in capital spending, will continue the construction of a second plant in Georgia, which is scheduled to open in 2026.

Scaringe says Rivian is benefiting from a sharp reduction in the price of critical commodities such as lithium, which has gone from roughly $80 per kilogram to $20 per kilogram. Additionally, it has been able to renegotiate contracts with suppliers as other manufacturers have scaled back their BEV plans.

Speaking about the broader picture of consumer EV adoption, the CEO emphasizes the long road. “The automotive industry will electrify long term,” says Scaringe. But it will take the “next couple of decades.”

Lucid Cuts

Lucid Motors plans to build 9,000 BEVs in 2024, just 500 to 1,000 more than it made in 2023, as it struggles with brand awareness and demand for its luxury sedans. With that guidance, Lucid will build around 10% of the 90,000 EVs it previously predicted it could make and sell in 2024 when it went public three years ago.

Lucid gave guidance with its 2023 financial results. The company, backed by the Saudi Sovereign Wealth Fund, lost $2.8 billion in 2023.

While the Lucid Air sedan has been well received by automotive media, sales are lagging, forcing the company to cut prices this year to clear inventory. Lucid will launch the Gravity BEV later this year with high hopes that it will catch on better than the sedan.

– with David Kiley

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