Production outlook and profitability goals are front and center for EV maker
Electric adventure vehicle maker Rivian (RIVN) is on deck to report fourth quarter results after the bell on Wednesday as investors key in on the automaker’s 2024 production plans and profitability outlook in an environment of decreased EV demand.
For the quarter, Rivian is expected to report top-line revenue of $1.25 billion, with an adjusted loss per share of $1.33, per Bloomberg consensus estimates. That revenue figure represents a nearly 90% gain from the $663 million reported a year ago. On an adjusted EBITDA basis, Rivian is expected to report a loss of $1.05 billion, narrower than last year’s $1.46 billion loss.
Earlier this month, Rivian reported 13,972 deliveries in Q4, up significantly from a year ago but below consensus estimates of 14,300. Production was notably higher at 17,541 units, above estimates of 16,574.
For the year, Rivian topped its production goal of 54,000 with 57,232 vehicles produced in 2023 and deliveries coming in at 50,122. Rivian’s production forecast for 2024 is pegged at just over 80,000 vehicles for the year, per Bloomberg consensus estimates.
In terms of its full-year financial performance, last quarter Rivian narrowed its full-year adjusted EBITDA loss forecast for 2023 to $4 billion from $4.2 billion and reduced its 2023 capital expenditure guidance to $1.1 billion. Investors will be keying in on whether the Rivian management team was able to meet or even improve on its efficiency goals at the end of Q4.
Looking ahead, Rivian had forecast reaching “positive gross profit” by the end of 2024, with CFO Claire McDonough aiming for contribution margin profitability at the end of 2023 with R1 vehicles that featured newly updated pricing.
Rivian’s profitability plans are paramount to the investor thesis for the company — and for its survival. Pure play EV makers like Rivian, Lucid (LCID), and Fisker (FSR) have seen their shares hammered over the past year as a string of loss-producing quarters and a tough EV demand environment have left investors with little patience for underperformance.
For Rivian, that means watching the company’s profit and cost outlook for 2024. Wall Street expects Rivian to forecast an adjusted EBITDA loss for 2024 of $2.55 billion, with its capital expenditure outlays estimated at $2.37 billion.
Speaking of capital expenditures, Rivian will reveal on March 7 its more affordable R2 EV, which will be built at its upcoming $5 billion Georgia assembly plant. Rivian is aiming for the plant to be completed by 2025, with new R2 vehicles rolling off the line in 2026.
CFRA analyst Garrett Nelson, who has a Hold rating on Rivian ahead of earnings, noted what’s at stake for Rivian as 2024 unfolds.
“While the company has a tailwind in the form of plummeting lithium-ion battery costs, we believe RIVN has a demand issue and it lacks the scale needed to compete with larger automakers,” he wrote in a note to investors last month. “Furthermore, free cash flow losses will likely worsen while the company builds its new factory in Georgia.”
“The consequences of weak demand are significant,” added Barclays analyst Dan Levy in a note to investors last week, in which the investment bank downgraded Rivian stock to Hold from Buy. Levy also raised concerns that Rivian could miss its 2024 target for gross margin profitability.
“It appears that even great product and tech is not enough to avoid the EV winter,” he said.
Pras Subramanian is a reporter for Yahoo Finance. You can follow him on Twitter and on Instagram.
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