Why Is Rivian (RIVN) Stock Down Today?

Rivian (NASDAQ:RIVN) stock fell more than 10% this morning after the company missed Wall Street’s fourth-quarter earnings expectations and lowered its vehicle production targets.

Rivian sign outside the company's HQ in Silicon Valley
Source: Michael Vi / Shutterstock

As a result, Rivian stock hit a new 52-week low of right around $38. This comes as shares have shed more than 60% in the year to date. So why the big plunge?

One big source of pain is that Rivian shared it expects to produce 25,000 electric vehicles this year. This production target is just half of what it initially expected for 2022, and comes amid supply chain and production challenges.

What Happened With RIVN Stock

In its quarterly results, Rivian said reservations for its vehicles now stand at 83,000, up from 71,000 in December. However, it also reported an adjusted operating loss of $2.8 billion for the full year. This shows that losses are widening.

Rivian’s net loss for the full year came in at $4.7 billion, and at $2.5 billion for the fourth quarter. Revenue for the fourth quarter of $54 million also missed estimates.

Why It Matters

The decline in Rivian’s business and the RIVN stock price is a comeuppance for the electric vehicle maker whose shares finished their first day of trading on Nov. 10 just above $100. RIVN stock is now 80% below its all-time high of $179.47, when the company’s market capitalization briefly surpassed that of Ford (NYSE:F).

Rivian had a hot start to trading, but it is just kicking off production. It began making three models in Normal, Illinois at the end of 2021. This includes its R1T pickup truck and an electric delivery van.

The first orders of Rivian’s delivery vans are going to Amazon (NASDAQ:AMZN), which holds a 20% stake in the company. Rivian declined to disclose how many vans it has produced and actually delivered to Amazon. More broadly, Rivian’s struggles show the volatility and uncertainty that continues to plague electric vehicle startups.

What’s Next for Rivian

RIVN stock is likely to continue slumping until it can demonstrate that it has its electric vehicle production and deliveries on track and improve its financial results. Until then, its share price is likely to continue weakening. Investors should wait for signs that the stock has hit a bottom before considering taking a positione.

On the date of publication, Joel Baglole did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Joel Baglole has been a business journalist for 20 years. He spent five years as a staff reporter at The Wall Street Journal, and has also written for The Washington Post and Toronto Star newspapers, as well as financial websites such as The Motley Fool and Investopedia.


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