(Reuters) – Rivian reported a 36% decline in first-quarter deliveries on Wednesday, as the electric-vehicle maker grapples with weak demand, sending its shares down nearly 6%.
EV makers have been battling tough demand as consumers opt for cheaper hybrid and gas-powered vehicles in an uncertain economic and political environment.
“I would say the sector at the moment is out of favor. Over the medium to long term, EVs are still inevitable, and so it’s just going to take some time for these companies to continue to ramp up,” said Andres Sheppard, senior equity analyst at Cantor Fitzgerald.
Rivian Chief Financial Officer Claire McDonough had said in February vehicle deliveries would be lower this year due to soft demand, partially because of the impact of fires in Los Angeles.
Demand could be further pressured as U.S. President Donald Trump’s tariff policies are expected to accelerate inflation and increase prices of automobiles, making consumers wary of committing to big purchases.
Sheppard said Rivian’s margins would be affected by tariffs, and it could face a larger hit from the duties as opposed to bigger players such as Tesla.
Rivian CEO RJ Scaringe had said earlier this year the company expects higher costs from tariffs on Mexico and Canada as it has a supply chain footprint in these countries.
The company delivered 8,640 vehicles in the quarter ended March 31, down from 13,588 a year earlier. But the deliveries exceeded analysts’ estimate of 8,200, according to Visible Alpha.
Tesla reported a 13% slump in quarterly sales, its weakest performance in nearly three years, as backlash to CEO Elon Musk’s embrace of far-right politics grows and consumers seek out newer models from rival EV makers.
Rivian produced 14,611 vehicles in the first quarter, compared with 13,980 a year ago. It reaffirmed its annual deliveries forecast.
(Reporting by Zaheer Kachwala in Bengaluru; Editing by Shilpi Majumdar)
Comments