By Akash Sriram
(Reuters) -Rivian forecast a modest gross profit for the year, as it managed to cut raw material and supply chain costs in its drive for efficiency.
The EV maker, however, projected an unexpected drop in deliveries for the year as an uncertain economy and shifting consumer preferences temper demand for its more expensive electric pickup trucks and SUVs.
Rivian shares rose as much as 7% in extended trading before paring gains to trade in the negative.
The company also expects higher costs from U.S. President Donald Trump’s plans to impose tariffs on Mexico and Canada.
“We have a supply chain that does have a footprint in both Mexico and Canada, and so large tariffs being applied will just translate to higher costs for us,” CEO RJ Scaringe told Reuters.
“There is such a high level of uncertainty that will ultimately impact consumer behavior and top-line revenue,” he added.
Rivian, however, posted a first-ever gross profit of $170 million in the fourth quarter, compared with a loss of $606 million a year earlier.
It forecast annual deliveries of between 46,000 and 51,000 vehicles, lower than Wall Street expectations of 55,520, according to 15 analysts polled by Visible Alpha. Last year, it delivered 51,579 units.
“I think they’re appropriately being just cautious because it’s unclear and they have no control over what’s going to happen politically here,” said Vitaly Golomb, managing partner at Mavka Capital, a Rivian investor.
The EV maker is also planning a month-long halt in production in the second half of 2025 to upgrade its assembly lines, as it gears up to launch the Tesla Model Y-rivaling R2 vehicle and start its deliveries early next year.
Last year, it started selling its upgraded R1 vehicles and changed suppliers to reduce manufacturing complexity and slash costs.
EV makers are staring at a tough market, with Elon Musk-led market leader Tesla reporting its first drop in annual sales in 2024.
Electric big rig manufacturer Nikola recently filed for Chapter 11 bankruptcy protection and said it would pursue a sale of its assets after struggling with rapid cash burn and funding challenges amid weak demand.
Revenue for the last three months of the year stood at $1.73 billion, compared with analysts’ average estimate of $1.4 billion, according to LSEG data.
(Reporting by Akash Sriram in Bengaluru; Editing by Anil D’Silva)
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