Rivian reports fourth-quarter results and announces 10% job cuts, causing stock to fall.

On Wednesday, the company announced that it would reduce its workforce by 10% and forecast EV production this year that was significantly below estimates. This was due to factory upgrades that caused downtime and slowing demand for electric vehicles due to high interest rates.

In extended trading, the company's shares dropped 17% after Rivian announced it expects to produce 57,000 vehicles in 2024, which is significantly lower than the estimated 81,700 units, according to eight analysts surveyed by Visible Alpha. Last year, the company produced 57,232 vehicles.

CEO RJ Scaringe stated on Wednesday that while we strongly support the complete electrification of the automotive industry, we acknowledge the difficult economic circumstances in the short term.

Rivian, which is backed by investors, has been losing thousands of dollars on every vehicle it builds as it ramps up production of its R1S SUV and R1T pickup trucks, and spends on building a new factory in Georgia.

At a time when demand for EVs has decreased, the company's cash burn is occurring, as CEO Elon Musk has warned that high interest rates are making cars unaffordable.

Rivian, in response to the price war initiated by Tesla, reduced the prices of its R1T pickup trucks and R1S SUVs by $3,100 this month.

Despite cutting prices of its Lucid Air luxury electric sedans last week, Wall Street's forecast for 2024 production was still much lower than expected.

At the end of the December quarter, Rivian's cash and cash equivalents were $7.86 billion, a decrease from $7.94 billion in the previous three-month period.

In the fourth quarter, there was a 10% decline in deliveries, which fell short of expectations, due to Amazon not receiving any deliveries during the three-month period in order to prioritize the holiday season.

LSEG data shows that revenue for the October-December period was $1.32 billion, exceeding Wall Street estimates of $1.26 billion.

Rivian anticipates achieving its first quarter of positive gross margin later this year, despite consistently incurring a loss on every vehicle it sells.

Early next month, the company will reveal its smaller and less expensive R2 platform.

In contrast to the previous year, the company recorded a net loss of $1.52 billion for the fourth quarter ended Dec. 31, which was lower than the loss of $1.72 billion reported in the same quarter a year ago.