Shares of Rivian Automotive (RIVN +2.01%) kicked off 2024 on a sour note, down 16% in the first trading week of the year as of 10:40 a.m. ET Friday. The electric vehicle (EV) maker is ramping up production as expected, but it appears to be struggling elsewhere.
Rivian is producing more, but what about sales?
Rivian announced its production and delivery numbers for the fourth quarter and full year this week. During its fourth quarter, Rivian produced 17,541 EVs, up roughly 8% sequentially. For the full year, Rivian even exceeded its own November projection of 54,000 units and ended the year producing 57,232 vehicles.
However, the company delivered fewer than 14,000 vehicles in Q4, down 10% from the third quarter. And in 2023, it delivered just about 50,000 EVs. So is Rivian struggling to fulfill orders, or is it struggling to find enough takers for its R1T electric pickup truck and R1S SUV? That's the biggest question troubling investors in the EV stock right now.
Where is Rivian stock headed now?
It's encouraging to see Rivian scale up production and cut costs -- its gross loss per unit delivered has dropped steadily in recent quarters. In the third quarter, for example, Rivian's gross loss improved by around $2,000 per unit to $30,648.
Overall, the EV maker even expects to hit a positive gross margin by the end of this year. That would be a huge milestone, but for now, Rivian's top-line growth still remains the important criterion for investors betting on the stock. Unsurprisingly, the consistently large gap between its production and deliveries so far isn't going down well with investors.
The company must deliver more EVs to generate higher revenue, and investors are now banking on Rivian to provide more insight into its demand, orders, and deliveries when it reports its full-year earnings on Feb. 21. Until then, investors will remain cautious about the EV stock, especially after it ended 2023 with 27% gains in anticipation of rising deliveries and revenue in 2024.
