Rivian's stock falls after the company cuts production forecast and fails to meet Q3 delivery expectations.

• Rivian Automotive's shares dropped approximately 8% during premarket trading on Friday after the company adjusted its 2024 annual production forecast.
• The lower production target of 57,000 units has been revised to between 47,000 and 49,000 units due to a "production disruption," as stated by Rivian.
• In the third quarter, Rivian manufactured 13,157 vehicles at its facility in Normal, Illinois, and delivered 10,018 of them.

During premarket trading on Friday, shares of dropped approximately 8% after the electric vehicle startup delivered fewer vehicles in the third quarter than anticipated and reduced its annual production forecast for 2024.

Due to a production disruption caused by a shortage of a shared component, the company lowered its production target for R1 vehicles and commercial vans from 57,000 units to between 47,000 and 49,000 units.

The supply shortage that started in Q3 of this year has intensified in recent weeks and is still ongoing. Due to this shortage, Rivian has revised its annual production forecast to be between 47,000 and 49,000 vehicles.

The issue is with a Rivian in-house motor component, but the spokesman did not provide additional information.

RJ Scaringe, CEO of Rivian, mentioned during a Morgan Stanley investor conference last month that they have faced challenges with several suppliers, specifically with their in-house motors and some of the components, which have been problematic and a reminder of the difficulties of a multi-tiered supply chain.

Although there is a shortage, the company has maintained its annual delivery outlook of low single-digit growth, with an expected range of 50,500 to 52,000 vehicles in 2023.

Rivian reported its vehicle production and delivery for the third quarter, including the part shortage.

During the third quarter, the company produced 13,157 vehicles at its manufacturing facility in Normal, Illinois, and delivered 10,018 vehicles. Analyst estimates compiled by FactSet predicted deliveries of 13,000 vehicles during this period.

In 2024, Rivian's shares have fallen more than 50% due to lower-than-expected EV demand and significant cash burn.