(Reuters) -Rivian Automotive maintained its production forecast for the year on Tuesday and said it lost more per electric car delivered than analysts had expected as cost-cuts are yet to take effect.
The EV maker, whose shares fell more than 5% in volatile trading after the bell, introduced offers on leases to boost sales, which helped the company beat revenue estimates after it cleared some of its inventory.
“The challenge, of course, then is that in Q3 the inventory is depleted. So, we’re rebuilding our inventory base. We expect deliveries in Q3 to be slightly below that in Q2,” CEO RJ Scaringe told Reuters.
Rivian halted production for three weeks in the second quarter to implement efficiency-boosting assembly line upgrades, which it expects to help post its first profit margin in the last three months of the year.
Cost reduction from the factory retooling will be realized largely in the second half of the year, Scaringe said.
Rivian, which is still losing thousands of dollars for every vehicle it makes, has seen its order backlog fall in the recent quarters as deliveries increased and some customers canceled their reservations.
The company said its loss amounted to 39% of a vehicle’s sales price, greater than the LSEG estimates of 34%.
Revenue for the quarter ended June 30 stood at $1.16 billion, compared with analysts’ estimate of $1.14 billion.
EV startups, including Rivian and Saudi Arabia’s Public Investment Fund-backed Lucid, have been bleeding cash as they struggle to balance escalating costs related to scaling production with the need to compete against industry leader Tesla and other automakers Ford and General Motors.
The company said its cash and cash equivalents were $5.76 billion as of June 30, compared with $7.86 billion at 2023-end.
Still, investors said Volkswagen Group’s $5 billion investment in Rivian as part of a new joint venture to share expertise in EV architecture and software development could help sustain the U.S. EV maker’s cash balance till it starts selling its R2 mid-size SUVs unveiled earlier this year.
Rivian posted a net loss of $1.46 billion in the second quarter, wider than the $1.2 billion loss a year earlier.
(Reporting by Akash Sriram in Bengaluru; Editing by Shilpi Majumdar)
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